Do You Need a Home Warranty?

When navigating the Greenwood Village, Denver, CO real estate market, one question often arises for both buyers and sellers: Do you need a home warranty? A home warranty is not the same as homeowners insurance, yet many people confuse the two. Insurance covers unexpected damage from events like fire or storms. A home warranty, on the other hand, provides protection for major systems and appliances that may fail due to normal use. Understanding how a home warranty works—and whether it fits your situation—can help you make decisions during your real estate transaction.

This article covers the fundamentals of home warranties, their potential benefits, their limitations, and how to determine whether they’re worthwhile when buying or selling a home.

A home warranty is a service contract. It typically covers items such as:

• Heating and cooling systems
• Electrical systems
• Plumbing systems
• Built-in appliances
• Water heaters
• Optional add-ons like pools or well pumps

A warranty assigns responsibility for repair or replacement to the provider, rather than making homeowners pay out of pocket each time something breaks. Providers usually send approved technicians to handle the work, giving homeowners a single point of contact instead of searching for contractors on their own.

Coverage varies by company and by plan. Some offer basic protection for core systems, while others include extensive add-ons. Buyers and sellers should read the contract closely to ensure they understand what is included, what is excluded, and what is considered “pre-existing.”

In markets like Greenwood Village, Denver, CO, real estate, buyers want to avoid unexpected repair costs after closing. A home warranty can offer peace of mind during the first year of homeownership, a period when new owners are learning how the property’s systems function.

Buyers often consider warranties for the following reasons:

If a major system fails soon after move-in, the warranty may reduce repair expenses. Heating and cooling systems, in particular, can be costly to fix or replace.

Instead of calling multiple contractors, buyers can contact the warranty company, which then schedules a technician. For buyers who are unfamiliar with local service providers, this can streamline repairs.

Some buyers prefer predictable costs. Paying an annual warranty fee and a service call fee can be easier to plan for than large, sudden repair bills.

Properties with older appliances or systems may be more likely to need repairs. In these cases, a warranty can help offset the risk.

Sellers sometimes purchase a warranty as part of their listing strategy. Doing so can elevate buyer confidence and reduce concerns about future unexpected repairs. Sellers may decide to offer warranties for the following reasons:

A warranty can make a listing more attractive in competitive markets. Buyers may see it as an extra benefit, leading to stronger offers.

If something breaks soon after closing, the warranty covers the repair. This reduces the likelihood that a buyer will contact the seller to resolve the issue.

Many companies provide coverage for sellers while the property is on the market. This allows homeowners to avoid unplanned repair expenses before the sale.

A warranty is not always beneficial. Some homeowners may prefer to save money for repairs instead of paying annual fees. A warranty may not be needed if:

Recently built homes or houses with fully updated systems may already be under manufacturer or contractor warranties.

Some homeowners want to choose their own repair professionals. Warranty companies typically require using their technicians.

Warranties often provide repairs or replacements based on contract limits. If a system needs full replacement, the warranty may cover only part of the cost.

Warranty companies schedule work based on availability. Homeowners who prefer faster service, especially during peak seasons, may not want to wait.

If you’re still asking if you need a home warranty, the following factors may help guide your decision:

Older homes or those with dated systems may benefit more from coverage. Newer homes may have fewer immediate repair needs.

If surprise repair bills create stress, a warranty can provide a measure of financial stability.

Buyers planning to live in a home for many years may see value in multiple years of protection. Short-term owners may only need a one-year plan.

Contracts vary widely. Pay attention to exclusions, service fees, caps on payouts, and rules for pre-existing issues.

Real estate agents familiar with the local market, including professionals experienced in Greenwood Village, Denver, CO real estate, can offer guidance based on common repair issues in the area.

Anne is dedicated to helping buyers find the right home and helping sellers connect with qualified purchasers, working with consistent focus throughout the process. When she commits to a goal, she ensures that it is completed with determination. Her understanding of Downtown Denver and surrounding communities—including Centennial, Littleton, Cherry Hills, Greenwood Village, Castle Pines Village, Washington Park, Lone Tree, Golden, and Evergreen—comes from more than three decades of navigating the area’s development and growth. Anne and her Colorado real estate team deliver a high level of service designed to help clients reach their real estate objectives.

If you're looking to buy or sell a home or have any questions about the Greenwood Village, Denver, CO real estate market, contact Anne Dresser Kocur today.