Home Warranties 101

home, homeowners, homeownership, real estate

Purchasing a home is a huge investment – one of the largest that most will make in their lifetime. It can also be a stressful time with everything going on: packing, handing utilities, changing schools, relocating, and more. We recommend always working with a real estate agent, whether you’re buying or selling your home. A realtor’s knowledge, expertise, and connections are invaluable. One recommendation that your agent might mention are home warranties. Newly constructed homes will typically come with a warranty or guarantee from the contractor. However, in most cases, home warranties are not offered by default. 

Think of a home warranty as a service contract on your home. These are not to be confused with insurance policies, which cover damage in the unlikely event of flooding, hail, or other act of nature. A home warranty can act as peace of mind for new homeowners. To better understand the cost, how they work, what they cover, and if they might be right for you, we’ve created the following guide for home warranties. 

How expensive are they?

Nobody likes spending more money than they have to, especially on something as expensive as a new home. However, depending on the situation, home warranties can be worth the investment. The average cost of home warranties typically falls between $350-$600 per year, according to HomeAdvisor. The Tennessee average is $331 per year, and prices in Kingsport, TN fluctuate between $300-$500, depending on the service provider and coverage. For instance, homes with pools, irrigation systems, or those in certain markets might have costlier coverage. Below are some of the most commonly replaced features in a home and how much they cost to be replaced.


Central air conditioner: $5,467

Furnace: $4,286

Water heater: Tank – $889 (40 to50 gallon tank);Tankless – $3,000

Appliance repair: $170 (most homeowners spend between $104 and $237)  

In addition to the yearly cost, it’s important to note that most warranties have service call fees ranging anywhere from $50-$200 per visit. Think of this as an insurance deductible. It is charged for the local vendor to come diagnosis and fix the problem. At first glance, it would seem that having just one of these fail would recoup the costs of paying for a home warranty. While this is true, you need to be able to determine the likelihood of something like this happening. Click on the calculator above to get a customized home warranty quote today. 

Will I need one?

Before deciding on a home warranty, homebuyers should have a home inspection conducted by a licensed professional. During a home inspection, the inspector will look over the home with a fine-tooth comb – identifying any potential issues, as well as the age and condition of all appliances, hot water heaters, HVAC units, septic systems, among others. Before moving forward with the purchase, the homebuyer can ask the seller to remedy any problems they deem necessary. In addition, if there are aspects of the home that could be troublesome, the homebuyer can ask that a home warranty be included as a part of the deal. On the other hand, sellers may have already had an inspection completed or know that home warranties are of value in the market and offer a home warranty as a part of the listing price in order to get more viewings and sell their home faster.  

Overall, it’s important to evaluate the entire home and understand which aspects may need to be repaired or replaced in the future. With this information in hand, homebuyers should be able to tell if a home warranty will be helpful or wasteful. Like any warranty, you’re hedging your bets that something will go wrong and the cost of covering the potential loss is worth the investment. If in doubt, talk with your real estate agent and get their advice. In most cases, they’ve seen similar issues and can lend guidance based on their experience.