You're halfway through listing prep when the home warranty renewal email lands. You paid for the plan months ago, and now you're not sure whether it goes to the buyer, gets refunded, or just ends at closing.
A home warranty doesn't follow the house on its own. You have three options: transfer it to the buyer, cancel it for a prorated refund, or offer it as a seller-paid perk in the purchase agreement. Your contract decides which ones are open to you.
What Are Your Three Options Before Closing?
You can transfer the plan to the buyer, cancel it for a refund, or keep it active and offer it to the buyer as part of the deal. Which makes sense depends on what your contract allows and how much coverage is left.
Doing nothing doesn't close out the plan. It stays in your name until it ends or renews under your contract's terms, and the buyer has no account to file a claim under.
Find the Transfer and Cancellation Clauses
Pull out the contract you signed and look for a section labeled something like "Transfer," "Assignment," or "Cancellation." That language tells you whether the plan can move to a new owner, whether there's a fee, how much notice the company needs, and how it calculates a refund.
If you need a refresher on what your plan covers, here's how home warranty plans work as service contracts. The FTC's guidance on extended warranties and service contracts lists questions to ask about your contract, including whether there's a fee to transfer it to someone else.
Check the Remaining Term and Coverage
Find the start date and the contract period. A plan with ten months left is a real selling point. A plan with three weeks left is barely worth mentioning, since the buyer will have to decide on renewal almost immediately.
Print the term in your contract. In California, for example, the state's Department of Insurance licenses home warranties, and contracts must spell out the term, the fee, and any renewal terms.
Are Appliance Manufacturer Warranties Separate?
Yes. A home warranty is a service contract you bought separately, while a manufacturer warranty came with the appliance itself. Manufacturer warranties don't all follow the appliance to a new owner: under federal warranty law, a "full" warranty must cover anyone who owns the product during the warranty period, but a "limited" warranty can end when the product changes hands.
Check each appliance's warranty status before you tell a buyer what's covered.
How Do You Transfer the Plan to the Buyer?
Submit a transfer request to the warranty company so the remaining term moves into the buyer's name. It's paperwork between you, the buyer, and the provider, and it's easiest to finish before closing.
Follow the Contract's Notice and Fee Requirements
- Ask the provider for its transfer form or process. Most will need your contract number, your name, and the buyer's name and contact details.
- Fill in both the seller's and the buyer's information, including the buyer's new billing address and email.
- Sign wherever the provider requires, and pay any transfer fee your contract lists.
- Submit it the way the provider asks, within the window your contract sets.
Skip this, and the buyer won't have an account with the provider. If their AC fails in week two, they can't file a claim on a plan that's still in your name.
Some states set rules here. Florida requires every home warranty contract to tell you that you can assign the warranty to the buyer for at least 15 days after the home is sold, and caps the assignment fee at $40.
Confirm the Buyer's New Account Is Active
Ask the provider to confirm the new account is set up before you hand over the keys. From the buyer's side, a transfer request that hasn't been processed is the same as no transfer at all.
Can You Cancel the Plan and Get a Refund?
Usually, yes. Many contracts allow cancellation with a prorated refund for unused coverage, sometimes minus an administrative fee or claims already paid. Cancel if the buyer doesn't want the plan or you'd rather close the account than transfer it.
Submit the Cancellation Request
Contact the provider as your contract specifies and ask to cancel. Keep a copy of the request and the confirmation number or email reply, since that's your proof the account closed on a specific date.
Check the Refund Calculation and Any Fees
Refund rules come from your contract and, in some states, from state law. Under the same Florida statute, you can cancel within 10 days of purchase for a full refund minus any claims paid and an administrative fee of up to 5 percent. After 10 days, the refund is based on 90 percent of the unearned pro rata premium, minus claims paid.
If you don't check the formula, the refund may be lower than you expect, especially if you filed a claim earlier in the term.
Should You Offer a Seller-Paid Home Warranty?
A seller-paid home warranty is a plan you buy or transfer for the buyer as part of the deal. It's optional and negotiated like any other concession, and it can reassure a buyer looking at an older furnace or water heater.
Agree on the Plan and Who Pays
Decide with your agent before you list. If you plan to offer a warranty, say so in the listing. If a buyer asks for one during negotiations, you can cover it, split it, or decline it in your counteroffer.
Check the Purchase Agreement and Closing Disclosure
Whatever you agree to needs to be in writing. Name the warranty in the purchase agreement, then check the Closing Disclosure. The CFPB's guide explains that when a seller agrees to pay specific costs rather than give a general credit, those amounts may be listed as "Seller Paid" line items on page 2. Make sure the warranty amount matches what you agreed to.
A warranty promised verbally but missing from the paperwork binds neither side.
What Should You Hand Over at Closing?
Give the buyer the warranty contract, the provider's contact details, and notes on any open or recent claims. It takes a few minutes and saves them a confused first call when something breaks.
Give the Buyer the Contract and Claim Details
Hand over:
- A copy of the full warranty contract, not just the declarations page
- The provider's phone number and claims process
- Any recent claim numbers, especially for repairs still in progress
- The transfer confirmation, if the transfer already went through
Put these in the same packet as the appliance manuals and service records. This homeowner binder handover checklist covers what else belongs in it.
Keep Written Proof of the Transfer or Cancellation
Save the transfer confirmation, or the cancellation confirmation and refund amount. It settles any later question about who owned the plan on a given date. Keep it with the rest of your home records from the sale.
Frequently Asked Questions
Can a home warranty be transferred after closing?
Sometimes. It depends on the window in your contract, and some states set a minimum. Florida, for example, requires that you can assign the warranty for at least 15 days after the sale. Submitting the transfer before closing is safer, since you can confirm the buyer's account is active before you hand over the keys.
Does the buyer get a new one-year term when my plan transfers?
Usually not. A transfer moves your existing contract to the buyer, so they get whatever time is left. If they want a full new term, they can renew when it ends or buy a new plan.
Who pays the transfer fee when a house sells?
Whoever you agree on. Your contract sets the fee, which may be zero, and either side can cover it as part of the deal. In Florida, the fee can't exceed $40.
What if my home warranty can't be transferred?
Then your options are to cancel for a refund or let the plan run out in your name. The buyer can still buy their own home warranty after closing if they want coverage.
Do home warranty rules differ by state?
Yes. Florida's statute guarantees a transfer right of at least 15 days after the sale, caps the transfer fee at $40, and sets a refund formula. California licenses home warranty companies through its Department of Insurance and requires contracts to list covered items, exclusions, the contract period, the fee, and renewal terms. Check your own state's insurance or consumer protection agency for its rules.
Hand the Buyer a Complete Home Record
The warranty is one piece of the handoff. The buyer also needs the water heater's install date, the HVAC filter size, and every appliance's model number. With Manse, you keep the warranty contract, manuals, and maintenance history in one place, so the handoff takes minutes. Start your free home profile.
