Selling a home in the Bay Area isn’t just a transaction; for most, it’s a major life transition. For many longtime homeowners, especially those moving into a new season of life, the sale represents decades of memories and meaning. It also means selling a home that isn’t brand new, even if it has been well-maintained. You want the freedom to move forward without complications tugging at you after closing. And that’s exactly why I encourage almost every seller I work with to invest in a buyer’s home warranty. It’s one of the simplest, most cost-effective ways to protect your peace of mind — and once you understand how California’s purchase contract actually works, the value becomes even clearer.

One of the great misunderstandings in real estate is the belief on the part of the buyer that they receive some sort of built-in guarantee about the condition of the home they’re purchasing. They imagine that if there were anything seriously wrong with the place, it would have been disclosed to them, or it would have shown up when they did their inspections. In fact, the standard California purchase agreement goes out of its way to avoid giving warranties of any kind. The contract is written almost like a teenager asked to clean their room: “Look, I never said it worked… I just said you could look at it.” Everything in the contract is structured to avoid promising that any system, appliance, fixture, or feature of the home works perfectly — or works at all.

Once you see how intentionally limited the contract is, the logic behind offering a home warranty becomes clearer. It fills a gap the contract leaves wide open, protects the buyer’s emotional experience, and shields you from being pulled back into the transaction long after the ink is dry.

First Year Repair Issues are Very Common

It’s been reported that over 1 in 10 homeowners made a claim on their home warranty in their first year of ownership. That’s from an American Home Shield survey of 1,004 homeowners in September 2024.  Another source puts it higher: on average, homeowners file 1.9 warranty claims per year, with HVAC, electrical systems, and appliances being the most commonly serviced components.
Not only that, 92% of homebuyers experienced at least one issue in their first year of homeownership. By far the most common problem was needing to replace appliances, which 47% of homeowners marked as an issue. Leaks, infestations, roof issues, and electrical problems affected about 1 in 5 homeowners. Sixteen percent had their HVAC system die.

“As-Is” Really Means As-Is — and Buyers Don’t Always Internalize That

The first thing the California contract tells the buyer is that the home is being sold as-is in its present physical condition. That single sentence sets the stage for the entire transaction. It means you, the seller, are not guaranteeing the roof, the appliances, the plumbing, the HVAC, or any other component of the home. You’re not promising performance, longevity, or reliability. You’re not even promising that everything is functioning on the day it closes — only that you have disclosed what you know about the condition and operability of these various systems and components, and that the buyer is free to inspect and learn about the home before committing to it.

But here’s where emotion enters the picture. Buyers often feel like they should be getting a home that “works,” and can be expected to work without any surprises for the foreseeable future. Even though the contract says no such thing, that expectation sits quietly in the background. And when something breaks shortly after closing — a dishwasher stops draining, a circuit breaker starts tripping constantly, a water heater dies — the buyer’s frustration often lands squarely on the seller. And rightly or wrongly, the buyer might feel that the seller knew, or suspected, that there was a latent defect with the home that they failed to disclose.

This is very common.  After all, you’ve owned the home for years, decades maybe – and now, right after you sell it, an expensive repair issue pops up that you had no idea about?  Many buyers will immediately feel that the seller was hiding something.

A home warranty helps close the gap between legal reality and buyer psychology. It gives the buyer somewhere else to turn when normal, predictable failures occur. And it prevents their moment of distress from becoming your problem.

Your Neighbor Sold their House too Cheap!

Disclosure Is Required — Guarantees Are Not

California requires sellers to complete detailed disclosure forms, including the Transfer Disclosure Statement and Seller Property Questionnaire. These forms ask you to reveal anything material issues you actually know about the home’s condition and history. They require honesty, but they don’t require heroics. If you know about a leak (including prior leaks that have been repaired), you must disclose it — but disclosing something does not convert into a promise that the roof will behave in the future. If the furnace is working, but has had issues in the past, you must say so — but you’re not guaranteeing it will last through the winter.

In real life, though, buyers often interpret straightforward disclosures as reassurance. When a buyer sees “furnace working at last use,” they subconsciously read that as, “I can count on this furnace.” And when the furnace fails a month later, buyers sometimes conclude the seller misled them.

A home warranty helps defuse that moment. Instead of second-guessing the disclosure paperwork, the buyer’s first thought is, “Good thing we have coverage.” That shift — away from suspicion and toward a practical solution — is worth far more than the cost of the warranty.

Buyers Have Inspection Rights — But That Doesn’t Give Them Future Protection

The purchase contract gives buyers wide latitude to investigate the home. They can inspect, test, measure, scope, probe, and evaluate virtually every system and surface. The contract is essentially saying: “Buyer, it’s your responsibility to find out what works and what doesn’t. If you want to know the condition of the sewer line, the roof, the chimney, or the HVAC, go find out now — not after closing.”

But even with a thorough inspection, the buyer is still purchasing a home that is aging in real time. The inspector provides a snapshot, but not a guarantee. And buyers, particularly first-timers, sometimes forget that a “clean” inspection report is not a warranty.

So what happens when the 18-year-old water heater — which the inspector said “functions but is near the end of its service life” — dies two weeks after move-in? Even when the buyer was warned, even when everything was done correctly, their emotional reaction often leads straight back to the seller.

But if the seller provided a home warranty, that moment changes completely. The buyer has a clear next step: call the warranty company. You stay out of the crossfire.

The Only “Warranties” in the Contract Are Extremely Narrow

The purchase agreement contains tiny fragments of warranty-like obligations, but they’re so limited they barely register. The seller must strap the water heater. The seller must have smoke and CO detectors installed. If a built-in appliance is included in the sale, it must remain in the home — though the contract never claims it works. In many jurisdictions, the seller must make sure that the plumbing fixtures are low-flow, or disclose the condition of the sewer lateral, septic system, or water well.

That’s about it.

Everything else is intentionally unwarranted. The contract is designed to protect both parties by making the buyer responsible for understanding what they’re buying. But while that works well legally, it works poorly emotionally. When something breaks, the buyer wants someone to blame — and the seller is the easiest target.

A home warranty redirects that frustration toward the correct party: the company that actually provides coverage.

Change Happens

Why Home Warranty Companies Exist in the First Place

If the contract offered meaningful warranties, home warranty companies wouldn’t exist. Their entire business model is built on providing the protection the contract explicitly avoids. The purchase agreement often includes a checkbox asking whether a home warranty will be provided because the real estate industry long ago recognized that without one, both buyer and seller are exposed.

The buyer has no safety net. The seller has no insulation from blame.

The warranty becomes the bridge between these two vulnerabilities. It gives the buyer a structured, predictable path for dealing with surprise expenses. It gives the seller a clear exit from post-closing responsibility. And for a few hundred dollars, it buys an enormous amount of goodwill and peace of mind.

How a Warranty Protects Your Bottom Line During Negotiations

One of the biggest financial advantages of offering a warranty is the way it shapes inspection negotiations. Even the best-maintained homes generate inspection reports filled with disclaimers and cautions. Without a warranty, buyers sometimes feel exposed and request costly credits or repairs — sometimes into the thousands.

But a warranty reframes the situation. Buyers begin interpreting concerns through a more forgiving lens. An older HVAC system isn’t a threat; it’s something they can rely on the warranty to support. Aging appliances don’t feel like financial bombs waiting to explode; they feel cushion-protected. I’ve seen countless negotiations soften simply because a home warranty was included.

In some cases, the seller saves far more in inspection concessions than the warranty costs. It’s a strategic move with an enormous return.

Why Warranties Make Homes More Attractive to Buyers

In a high-priced market like the Bay Area, buyers stretch themselves financially to buy a home. That stretch heightens sensitivity. They’re not just buying square footage; they’re buying a huge monthly expense which will strain their budget and make any major repairs, especially soon after closing, into more than just a headache – it could literally break the bank. It can put such stress on the new owner that they become emotional, angry, and looking to shift the blame…to the seller. Anything that reassures them — anything that makes the home feel like a safer commitment — has real value.

A home warranty does exactly that. It signals that the seller is responsible, thoughtful, and not trying to shift problems onto the buyer. It calms nerves. It builds goodwill. It gives buyers the confidence that if something big goes wrong in the first year, they won’t be alone.

In highly competitive markets, that confidence helps your home stand out. In slower markets, it becomes even more powerful — sometimes the difference between getting one offer or several.

My Unique Home Warranty and Condition Advisory

The Buyer Advisory Regarding Property Condition, Seller Disclosures, and Home Warranty is one of those small-but-mighty tools I use to keep a transaction smooth, transparent, and drama-free – especially after the sale has closed. I have never seen another agent provide anything like it, but I’ve found that giving buyers a clear written explanation of what the contract does (and does not) promise eliminates a tremendous amount of confusion and misaligned expectations. It reinforces that the seller has disclosed everything they know, that homes can still have surprises despite inspections, and that the seller is stepping up with a solid home warranty for added peace of mind. This simple document brings clarity, reduces the risk of misunderstandings, and helps both parties start the relationship on the right foot, making it a genuinely valuable part of my process.

You can download a copy of my advisory here.

Downsizing Done Right

What Should a Seller Include in the Home Warranty?

A home warranty only delivers real value to a buyer when it actually protects them from the big, expensive surprises that can pop up after closing, so it’s important for a seller not to “cheap out” by choosing the bare-bones version. A minimal plan may technically satisfy the idea of providing a warranty, but it doesn’t do much to reduce the buyer’s anxiety or shield them from the kinds of four-figure repairs that can sour the entire post-closing experience. A more comprehensive plan shows good faith, strengthens the buyer’s confidence in the transaction, and dramatically lowers the odds of a frustrated phone call later. When selecting coverage, it’s worth including protections for systems and components that are costly, aging, heavily used, or unique to the property.

Here are key areas sellers should consider covering:

• Heating systems, furnaces, and heat pumps
• Air conditioners and HVAC components
• Water heaters (including tankless units)
• Pool and spa equipment
• Water well pumps and related systems
• Septic tanks, pumps, and associated components
• Enhanced roof-leak coverage
• Expanded plumbing leak protection
• Upgraded appliance coverage, especially if appliances are older or particularly expensive

Choosing broader coverage is a small investment compared to the peace of mind it provides for both sides of the transaction.

Why I Recommend Home Warranties to Nearly Every Seller

After more than 20 years in the trenches and over 450 successful sales throughout the South Bay and beyond, I’ve seen the same pattern repeat over and over: buyers expect more than the contract actually gives them, and sellers benefit tremendously from offering a warranty that bridges that gap.

By offering to pay for a home warranty, a seller can:

• Reduce post-closing liability.
• Reduce post-sale conflict
• Ease negotiations around condition issues
• Buy peace of mind for seller (and buyer).

At the same time, they increase buyer confidence, increase goodwill, increase listing appeal, and increase the likelihood of a smooth, drama-free closing.

It’s rare in real estate that you can spend a few hundred or a thousand dollars and meaningfully improve the outcome of a million-dollar transaction. But this is one of those moments. A buyer’s home warranty protects the buyer, protects the seller, and protects the entire experience.

And in a market as emotionally charged, high-stakes, and complex as the Bay Area, that protection is worth far more than the price tag.

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Senior Friendly Homes in Silicon Valley South