Home Warranties Offer Great Benefits to Real Estate Agents, Sellers and Buyers

Posted on Jul 16 2015 - 10:40am by Housecall

home warrantiesIf there was a magic formula for selling real estate quickly and easily, you can bet every real estate agent would be signing up. Real estate sales affect agents, buyers and sellers one way or another. Although homes need to be in good condition and offer what buyers are currently seeking, ultimately the real estate agent drives the sales. To stay on top of their game and work a little magic, smart agents have learned that a home warranty, also called a home protection plan, can work miracles for increasing sales and quick turnarounds. Learn how agents, sellers and buyers benefit from home warranties and all come out winners.

Home Warranties
Home warranty programs are available for purchase by consumers who want protection for home appliances and major home systems in the event they fail or break down. If any of the items under warranty in the program should fail, the consumer simply contacts the home warranty company and they see to it that the item is inspected, repaired or replaced by a qualified contractor.

Agents Start the Process
Once a real estate agent learns about the advantages of home warranty programs, work takes on new meaning and they see the possibilities for success. Skeptical buyers are no longer afraid to consider older homes when sellers pay for a home warranty. After an agent explains that the warranty covers appliances and major heating, electrical and cooling systems, clients become eager to see a home that was once not considered. The agent just got a shot at another sale!

Real estate agents have more time to devote to selling homes because they are not continually working out last minute problems and negotiations with sellers and buyers over failing appliances and air conditioners. REALTORS® can sell any home that comes with a home warranty faster. Home warranties are almost like having insurance. Customers like the idea of buying a home and not worrying about troubleshooting repairs, hiring contractors and forking over more money. Home warranty programs provide the magical solution for problem homes that aren’t turning over. Some homes may have the most wonderful qualities, but it’s often the bonus of a warranty program that seals the deal.

Warranties help agents to get satisfied sellers and buyers, which in turn leads to more referrals and increased future business. Real estate agents stand to make more money when they sell more homes. There is no doubt about it; REALTORS® are in business for the money. Selling homes with warranties provided by the seller goes a long way to increasing REALTORS'® incomes!

Related: American Home Shield Launches New Real Estate Home Warranty Plans

Sellers Take the Lead from Agents
Sellers are overjoyed at the prospect of a home warranty that gives their home an edge when selling in a competitive housing market. Homes with a warranty typically sell for more money than those with no warranty. Any seller would be pleased to get top dollar for their home. Faster sales are appealing to sellers. Constant cleaning and showing the house weakly is tiring on sellers. The faster the home sells the better!

Buyers Dive at the Opportunity to Purchase Homes with a Warranty
Homes that come with a home warranty help to assure buyers that repairs for warrantied items are covered by the seller through warranty coverage. Interested home buyers don’t have to speculate on mechanical problems down the road and how much it’s going to cost them after they move in.

If we all had our way, homes would sell instantly and would always be a snap. However, life is full of surprises. Sometimes you’ve got to work a little magic with home warranty plans so REALTORS®, sellers and buyers all win.

David Glenn is a home improvement expert. He freelance writes about home maintenance and DIY home repair. He's also knowledgeable about topics like how to improve social presence and build a reputation online.

10 Comments so far. Feel free to join this conversation.

  1. Ash Solitaire July 24, 2015 at 12:03 am -

    Wow! There’s a lot to learn from this post. It’s great to know that home warranties could offer number of benefits. This is such a relevant article that should be taken into consideration in this time and age where the real estate market is getting more competitive and tougher. In connection to this, it is important as well that as home owners, we deeply consider paying our mortgage and I came across an article at http://www.vancouverhousefinders.com/blog/5-ways-pay-your-mortgage-fast/ which suggests ways on how to pay it fast. It’s great to read articles that offer help. Thanks for sharing!

  2. Keith Laursen July 30, 2015 at 11:16 am -

    Here is a real opinion. While I agree that home warranties have benefits for both buyers and sellers, there are things to be aware of. In Texas, the home warranty lobby must have been effective because it’s basically written into out contracts.

    “If buyer purchases a residential service contract, seller shall reimburse buyer at closing for the cost …..not to exceed X.” Optional of course but ask yourself, why not request one if someone else is paying for it?

    I have clients who had thousands in repairs taken care of by home warranty companies but ask your agent if it makes sense to request the seller pay for one in this market and for a particular home. Anyone can buy a home warranty after the sale.They cover a lot of items that seldom break and contractors are hired because they are the lowest rate to the home warranty company. Is that what you want?

    A little unknown secret to the general public is real estate firms push their agents to tout home warranties for reduced liability. Don’t lose out in a multiple offer situation by requesting a $500 home warranty when you buy one yourself or take the hit when the garage door opener breaks. A home warranty for a home purchase with an old HVAC or water heater makes sense. One of a several year old home or with recent upgrades with lots of buyer competition may not.

    • Nick Caruso July 30, 2015 at 11:46 am -

      Great insight, Keith -thanks for reading and commenting!

      • Keith Laursen July 31, 2015 at 8:54 am -

        Nick – I banged my comment out in a hurry and notice a few typos. Is there a way for me to edit?

        • Nick Caruso August 3, 2015 at 9:54 am -

          Hey Keith –

          Do you not see a little edit button above your comment – near the date and time? I can see it, but I’m not sure if it’s because I’m an admin.

          Feel free to send me an edited response at nick@rismedia.com and I will edit/replace it for you!


  3. Brenda Gonzalez July 30, 2015 at 4:18 pm -

    My husband and I have offered warranties free to our buyers and sellers by paying the cost, had our buyers pay, have the seller pay. All around this block really.

    While they are a good sales tool they do add to the cost of the sale for someone. No matter how good we are at explaining them and providing the information we seem to get the call first when something breaks anyway.

    Because we live in a small town often there is not a technician to do the work so then the new owner has to pay out of pocket first. We then get involved and get the new company on a list of authorized agents.

    We also had a buyer who bought her own warranty with all the bells and whistles and then call a month later to let us know she had to buy a new AC. She never even called the warranty company and she bought it.

    We will continue to support them but we no longer give it as an advertising hook. It is just not as simple in our town.

    On the other hand my husband and I do have a home warranty on our house and we pay it each year.

    While this is a great article I am not ready to run out and use it as a tool to close more sales.

    • Nick Caruso July 30, 2015 at 4:50 pm -

      Thanks for sharing, Brenda! It definitely makes sense that home warranties might work better in some parts of the country vs. others. It’s great that you still offer them though – you never know when you’ll have a buyer seeking one.

  4. Linda gregory August 2, 2015 at 10:19 pm -

    We offer home warranty to buyer and seller. The property is covered before closing under the seller warranty then at closing the warranty is paid on Closing statement by seller and transferred to buyers name. The buyer has 60 days to add additional items to warranty if they want more coverage.

    This is a very good listing tool

  5. Kevin Westbrook July 21, 2016 at 1:59 pm -

    Home warranty is very valuable to everybody involved in a real estate deal. Another way to insure yourself when doing a deal is to get E&O insurance offered at http://hmsriskmanagement.com. This will ensure that you don’t miss any costly errors or omissions when doing a deal.

  6. Rachel Johnson April 1, 2017 at 11:40 pm -

    This is good info but leaves some important points left out. The most important thing a warranty does for either agent is lessen the occurrence of post close disputes. BUT each agent must do their due diligence for this to work. Warranties DO NOT cover systems that are found to be deficient or lacking in proper maintenance during the home inspection. Coverage is reserved for systems in proper working order at time of sale that break down due to normal wear and tear. Listing agents need to stress the importance of servicing systems to ready the home for sale ensuring more money and less post close disputes. Buyers agents need to evaluate the inspection and either negotiate repairs or if buyer chooses to buy as is write said items out of warranty. Agents often set unrealistic expectations when it comes to warranty and that defeats the protection it gives them. Talk to local reps don’t let title choose and understand the true benefits of a little extra protection for all parties.