I don't have a home warranty, and would personally try to haggle the home price down by $500 instead.. we do have some friends who bought a house that came with a warranty, they had the water heater burst a week after moving in, flooding the basement.. the warranty paid not only for a new heater, but for a plumber to bring the system up to code (expansion tank and the like) - while i could be DIY'ed cheaper, they now have a nice new water heater professionally installed for only the small deductable, and they still have the warranty. If your options are having it or not, with no other differences elsewhere, I would take the warranty.