Home Warranties

About Residential Service Contracts (aka Home Warranties)

When purchasing a home warranty the buyer chooses any policy or plan they want and then tells the title company their choice. The title company starts the policy and obtains an invoice. (The plans are cheaper to buy with a real estate closing than after closing as a consumer.)

The invoice is paid by title through funds reconciled at closing.

If the seller agreed to contribute $600 (or whatever was negotiated in the contract), then the title company will deduct the $600 from the seller and credit the amount to the buyer to offset the cost of the home warranty 1st year policy.

If the policy chose by the buyer costs $750 and the contract says that the seller will pay $600, then the buyer will be responsible for the remaining $150.


TX NOTE: Disclosure Required!!!!

Exp has a marketing relationship with America's Preferred Home Warranty, a Residential Service Company. In the state of Texas, per TREC rules, we are required to disclose that relationship on EVERY transaction with a home on it. (Not land or commercial)

This disclosure must be signed by all parties even if they are not buying a warranty. It is simply a required disclosure on all of your residential deals to be signed with the contract.

Here is an example of what it looks like if we are representing the buyer. Our information is on the LEFT side with our buyer signing below and seller's agent and sellers sign on the right side.

What is a home warranty and how do the buyers pick?

When I give a list of warranty companies to my buyer to have them select, this is the way I introduce the topic:

Hi Buyer,

Here are the names of several TREC licensed companies who provide home warranty service. Please do your due diligence to research the companies and find out if you feel comfortable with them. Make sure you understand what is included and what is excluded from their warranty policy to ensure that you pick a company with a good reputation and service level. These names are not in any particular order and I am not compensated by any of these companies. You are not required to choose a warranty company from this list. There are MANY companies that offer home warranty services that are licensed in the state of Texas.


America's Preferred Home Warranty (APHW)

http://bit.ly/APHWeXp (PDF brochure)

OneGuard Home Warranty


Landmark DFW (they offer a plan for Realtors too!)


Choice Home Warranty


Fixd Home Warranty


Here is a video that explains a warranty:


How does a home warranty work?

Homeowners pay a yearly or monthly charge for home warranty coverage. When a covered breakdown of a home’s system or appliance occurs, the homeowner pays a small service call fee (normally between $60-$100) for diagnosis. In return, the home warranty company finds a contractor to diagnose and repair the covered breakdown. The home warranty company will repair the covered breakdown, or replace it if it is irreparable, as long as it is covered in the home warranty contract.

Is there a difference between home insurance and a home warranty?

Many homeowners hear about a home warranty plan and think they already have the coverage it provides with their home insurance. A home warranty plan covers components of many of the systems and appliances within a home, while home insurance usually covers the home’s structure and protects it from flooding, fire, burglary, and so on. A home needs both.

Home insurance covers the structure of a home, as well as damages that occur because of fires, floods and other natural disasters. If your dishwasher started leaking, home insurance would likely cover the water damage it caused.

A home warranty, on the other hand, would repair or replace the failed dishwasher but wouldn’t cover the damage caused. Home insurance covers the structural part of a home, while a home warranty covers the systems and appliances within it. This is important to remember because there’s not much overlap between the two – homeowners might want both!

Example of what a home warranty might cover

A home warranty plan covers the repairs and replacements of mechanical components of a home’s major systems and appliances.

Service Call Fee: $70

Air Conditioning and Heating

Air Conditioning System



Built-In Microwave


Garbage Disposal

Kitchen Exhaust Fan

Kitchen Refrigerator




Electrical System

Garage Door Opener


Plumbing System


Additional Benefits

Air Conditioning Tune-Up

Heating Tune-Up

Pest Control

Re-Key Service

Subterranean Termite Treatment