Three RE/MAX Approved Suppliers - First American, HMS and American Home Shield - provide a variety of home warranties that RE/MAX Associates can suggest to their clients when selling or buying a home.
Home warranties not only protect the buyers and sellers in a transaction; they also assist everyone in getting to the closing table more quickly and smoothly. Here's a look at some tips and advice these Approved Suppliers provide to help you explain the benefits and convey the value of purchasing a home warranty:
Give buyers peace of mind
"When agents offer their buyers a warranty, the value goes beyond protecting systems and appliances; it helps manage unexpected expenses in today's difficult economy," says Douglas Stein, General Manager of HMS Home Warranty.
Most warranties, Stein says, provide coverage against mechanical failures for many major systems and appliances in a newly purchased home. Oftentimes, the coverage extends to items that most homeowners' insurance policies won't cover, leaving buyers in a sticky spot.
Buying a home with a warranty helps avoid closing delays when an appliance or water heater, for example, breaks down. Plus, buyers can opt to renew the warranty after the first year and extend the coverage - and their peace of mind - on one of their biggest investments.
HMS Home Warranty, like other companies, requires only a standard deductible per service call on covered components. Plus, customers can reach someone 24 hours a day, 7 days a week to ensure that an appliance or system breakdown doesn't become a major catastrophe.
Help sellers list with confidence
Many sellers are facing negative equity, declining home values and fierce competition from distressed properties. Offering a home warranty on their listing helps set it apart from the competition and make it a more attractive option to homebuyers, says Lelia Chapman, vice president of real estate sales for American Home Shield.
"Real estate agents have known for years that warranties can help homes sell faster and for more money than those on the market without this protection," Chapman says. "According to a study we conducted recently, homes with an American Home Shield home warranty sold an average of 23 days faster and closer to the list price - an average of 4 percent higher at closing."
By helping sellers protect their investment and their budget during a transaction, your foresight will be appreciated - and remembered - by clients who might otherwise face unexpected repair costs if an appliance or system breaks down before the final walk-through. If you're ahead of the game and watch out for the unknown, everyone walks away happy from the transaction.
Home warranties crucial for distressed properties
Nearly half of the listings on the market today are distressed properties. That means many homes are left in less than presentable condition, scaring away potential buyers and creating a headache for you as the listing agent.
Whether you're representing a bank-owned listing, a seller who's upside down in a short sale, or a buyer looking at REO properties, a home warranty protects everyone if an appliance or system in a vacant home fails.
"We've addressed the growing concerns about home conditions in today's market," says Maggi Havas, vice president of national sales and marketing for First American Home Buyers Protection. "In a majority of the areas throughout the U.S., our basic plans cover unknown pre-existing conditions, lack of maintenance, sediment, rust and corrosion, and many other critical mechanicals that homeowners find themselves dishing out cash for these days."
Without this type of fundamental coverage, Havas says, everyone involved could be burdened with repair costs and delays during the transaction, and buyers might move on to the next home - or the next agent.
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