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When it comes to purchasing a residential service contract, commonly known as a home warranty, one of the most frequently asked questions is: who pays for it? The answer may vary depending on the situation and the terms of the contract, but in general, there are two parties that can pay for a home warranty: the home seller or the home buyer.

Home Seller Pays for the Home Warranty

In some cases, the home seller may offer to pay for the home warranty as part of the sale of the property. This is done as a way to provide peace of mind to the home buyer and to protect the seller against any unexpected repairs that may arise after the sale has been finalized. The cost of the home warranty is typically included in the closing costs, which are paid by the seller.

Home Buyer Pays for the Home Warranty

In other situations, the home buyer may opt to purchase the home warranty themselves. This may be the case if the seller does not offer to pay for the home warranty, or if the buyer feels more comfortable having the warranty in their name. In this scenario, the cost of the home warranty is typically paid for upfront by the buyer, either at the time of closing or shortly thereafter.

It is important to note that there may be other factors that impact who pays for a residential service contract. For example, the terms of the contract itself may dictate who is responsible for payment. Additionally, certain states or municipalities may have laws or regulations that impact the payment of home warranties.

In any case, it is important for both the home buyer and the home seller to understand their roles and responsibilities when it comes to the purchase of a residential service contract. This includes reviewing the terms of the contract carefully and discussing any questions or concerns with the other party as well as with a qualified real estate professional.

In conclusion, who pays for a residential service contract will depend on the specific situation and the terms of the contract itself. Whether the home seller or the home buyer pays for the home warranty, it can be a valuable investment for both parties, providing peace of mind and protection against unexpected repairs and expenses.