Tyce Ortman REALTOR

Should you offer a home warranty when selling your Sioux Falls home?

A seller’s home warranty costs about $350 to $600 for a year of coverage on your home’s major systems and appliances, and it can make an older Sioux Falls listing feel safer to a nervous buyer while protecting you from a surprise breakdown during the listing period. In today’s Sioux Falls market — a median sale price around $335,000 and homes averaging 84 days to sell — a warranty is most worth offering on homes 15 years or older or with aging HVAC, water heaters, and appliances. On a newer suburb home in Harrisburg, Tea, or south Sioux Falls, it usually isn’t necessary. Think of it as a modest, optional sweetener — not a substitute for pricing right and fixing real defects.

By Tyce Ortman | July 31, 2026

Here’s the short version: a home warranty is a low-cost card you can play, but it’s rarely the thing that sells your house. It’s most useful when a buyer is quietly worried that the furnace or the water heater is going to fail the week after they move in — and on an older Sioux Falls home, that worry is real.

Sellers around Sioux Falls ask me about this constantly, usually right after an inspection turns up an aging system or when a listing has sat a little longer than expected. So let’s walk through what a warranty actually does, what it costs, and when it’s genuinely worth offering here.

What a home warranty actually covers — and what it doesn’t

A home warranty is a service contract, not insurance. It pays to repair or replace major home systems and appliances when they break down from normal use. Most plans cover:

• Systems: heating and cooling, electrical, and plumbing
• Appliances: water heater, oven and range, dishwasher, built-in microwave, and often the washer and dryer
• Optional add-ons: well pump, roof-leak coverage, or an HVAC tune-up, usually for an extra fee

What it does not cover matters just as much. Warranties typically exclude pre-existing conditions, damage from poor maintenance or misuse, code violations, anything still under a manufacturer’s warranty, and — obviously — storm or flood damage. Plans also cap what they’ll pay per item and per year, and the company decides whether to repair or replace and often picks the cheaper part or model.

There’s also a service fee — usually around $85 — charged each time someone puts in a claim. During your listing, that cost falls on you if something breaks. After closing, the policy transfers to the buyer, and the service fees become their responsibility.

Be honest with yourself about the trade-off. Home warranty companies are a frequent source of complaints, most of them over denied claims tied to missing maintenance records or “improper installation.” A warranty is a real perk, but it’s not a magic wand, and buyers who’ve owned before know that.

What it costs, and how the seller’s version works

Pricing is refreshingly simple compared to most closing-table line items:

• A seller’s plan typically runs $350 to $600 for a year of coverage that transfers to the buyer at closing.
• Listing-period coverage is often free or discounted — many companies protect your home while it’s on the market (usually capped at six months) as long as you buy the full-year plan for the buyer.
• The service call fee (~$85) applies per claim, paid by whoever holds the policy at the time.

Put that $500-ish price tag next to everything else you spend to sell — staging, pre-list repairs, agent commission, the South Dakota real estate transfer fee of $0.50 per $500 (about $335 on a $335,000 home, and that’s the seller’s cost) — and a warranty is one of the smallest numbers on the page. That’s exactly why it can be worth it: the potential upside of easing a buyer’s mind is large relative to a modest, one-time cost.

The mechanics at closing are clean. Your title company — First Dakota Title here in Sioux Falls, or Abstract Title if you’re selling in the Madison area — handles the paperwork, and the warranty simply transfers to the new owner as part of the deal.

When it’s worth offering in Sioux Falls — and when to skip it

This is where the local market does the deciding. Sioux Falls in mid-2026 is steadier than the frenzy of a few years ago: the median sale price is around $335,000, inventory is down roughly 30% from a year ago to about 892 homes, there’s a 3.3-month supply, and the average home takes about 84 days to sell while fetching close to 99% of list. Homes are still selling well, but buyers have a bit more room to be picky — which is exactly the environment where a small differentiator can help.

Lean toward offering a warranty when:

• Your home is 15 years or older, or the HVAC, water heater, or appliances are aging but still working
• You’re selling an older central or east-side Sioux Falls home where buyers worry about original systems
• Your listing has been on the market a while and you want a low-cost way to stand out without cutting the price
• You’re competing against new construction in Harrisburg, Tea, or south Sioux Falls that comes with builder warranties

You can usually skip it when:

• Your home is newer or recently updated, with systems and appliances under their own manufacturer warranties
• Your systems are in great shape and you’d rather put that money toward a cosmetic touch-up that shows better in photos
• You’re priced sharply and expect multiple offers — a warranty won’t move the needle much when demand is already there

One thing a warranty does not do: replace your obligation to tell the truth. South Dakota requires a Seller’s Property Condition Disclosure Statement, and you still have to disclose any known material defects — a furnace on its last legs, a leak you’ve patched, an electrical panel with issues. Offering a warranty doesn’t let you paper over a problem you already know about. If anything, pairing honest disclosure with a warranty is a strong combination: you’re transparent about the home’s age and you’re backing it up.

A warranty also isn’t a substitute for fixing genuine safety or structural issues. If your roof is failing or your foundation needs work, a $500 service contract won’t satisfy a buyer’s inspection — that’s a conversation about repairs or a price credit, not coverage. If you’re weighing whether to fix things up or sell as-is, that’s a separate decision worth running the numbers on before you ever think about a warranty.

Whether a warranty makes sense for your specific home comes down to its age, condition, price point, and how your listing is performing — and that’s exactly the kind of call I help sellers make before we list. Sometimes it’s a smart $500 to spend. Sometimes that money is better used elsewhere, or not spent at all.

Frequently Asked Questions

How much does a seller’s home warranty cost in Sioux Falls?

A seller’s home warranty generally costs $350 to $600 for a full year of coverage that transfers to the buyer at closing. Many companies also cover your home for free or at a discount during the listing period — often capped at six months — if you commit to buying the full-year plan for the buyer. Expect a service fee of around $85 per claim on top of the premium.

Does offering a home warranty help a house sell faster?

It can help at the margins, especially on older homes where buyers worry about aging systems. A warranty signals you stand behind the home and can ease a hesitant buyer’s mind, but it won’t overcome an overpriced listing or unaddressed defects. In the current Sioux Falls market, correct pricing and condition still do the heavy lifting.

Who pays for the home warranty, the buyer or the seller?

Either side can pay, but when it’s offered as a selling perk, the seller buys the one-year plan and it transfers to the buyer at closing. After closing, the buyer owns the policy and pays the per-claim service fees going forward. Your title company handles the transfer as part of the closing paperwork.

Does a home warranty replace the South Dakota seller’s disclosure?

No. South Dakota still requires a Seller’s Property Condition Disclosure Statement, and you must disclose known material defects regardless of whether you offer a warranty. A warranty covers future breakdowns from normal use — it does not let you avoid disclosing a problem you already know about.

Is a home warranty the same as homeowners insurance?

No. Homeowners insurance covers sudden damage from events like fire, storms, or theft, while a home warranty covers the repair or replacement of systems and appliances that break down from normal wear and tear. They’re separate products, and a buyer’s lender will still require insurance regardless of any warranty.

The bottom line

A home warranty is one of the cheapest tools in a seller’s kit — worth offering on an older Sioux Falls home or a listing that needs a nudge, and easy to skip on a newer, updated one. The smarter move is to decide where a warranty fits alongside your pricing, disclosures, and any pre-list repairs, so you’re not spending $500 to solve a problem that money can’t fix.

If you’re getting ready to sell in Sioux Falls or the surrounding area and want to figure out whether a warranty makes sense for your home, I’m happy to walk you through it. Reach out anytime: tyceortman@gmail.com.

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About Tyce Ortman — Tyce Ortman is a real estate agent with eXp Realty serving the greater Sioux Falls, South Dakota area and the Madison community. He specializes in helping first-time home buyers and sellers, with a focus on pricing properties right and finding each client the perfect home. Connect with Tyce at tyceortman@gmail.com.