Using Home Warranties - Yes We Do!
Using Home Warranties is an effective marketing tool and we provide one on almost every one of our residential listings. Perhaps more important than the direct marketing impact is the potential for real support and savings for our sellers and the buyers we need to make a sale. I am sure that someone will be able to develop some “reasons” why one shouldn’t provide Home Warranties, but for this posting I am just going to concentrate on why we should.
In the interest of full disclosure, I had to say “almost” every listing, because it is possible that a seller might not agree to us providing one or there might be some other extenuating circumstance that makes it impractical or impossible - maybe a foreclosure with no records and a lot of damage. We don’t do REO or Bank Owned listings right now so that hasn’t been an issue, but I guess it could be.
We offer a Home Warranty, at our expense, to all our clients during the listing process and when it is explained to them, they uniformly agree that it is a benefit they want and appreciate. Obviously the consumer can choose any warranty company they want, but since we are paying for the warranty we have researched the market and identified a preferred vendor. In “our” market we have determined that Home Warranty of America (HWA) provides the best service and the most bang for our buck, so that is who we prefer to use. HWA gives REALTORS a professional discount (not a volume based one) and before anyone fires off a letter to the GREC or some other regulatory agency, we never receive or see even that professional discount - we use that discount to reduce the price of the Home Warranty or add additional services to the warranty. Last month I was representing a buyer and the seller was to provide a warranty. We offered (through the sellers’ agent) to let the sellers use our provider and discount. My clients got a Warranty I know I can trust and the sellers got a discount - 4 happy campers there.
So why do use Home Warranties? From a marketing perspective, the sellers are happy to see us spending our commission to do something concrete for them and the buyers have a sense of security knowing that many major systems and a lot of minor ones are covered by some sort of warranty. It also really makes for a nice clean break between buyer and seller and the seller’s agent. If the morning after closing the back burner on the stove goes out, the seller doesn’t get an angry call nor does the seller’s agent. Instead the client uses their home warranty, calls a repairman, pays a small deductible and everyone moves on. The programs we use also covers the sellers during the listing (as long as they are living in the home) so it is possible that the seller could have repairs done under the warranty. After closing, the buyer has a 13 month comfort cushion where they know that they have some degree of protection from the uncertainties that accompany purchasing a resale home.
Earlier this fall I got this notice from HWA.
Real Client Savings on a Home Warranty
I also got a very nice letter from Dino and Sheryl thanking me for ensuring that they had coverage. This is not my only client that has had a claim paid this year. We are convinced that this is a good program and a good idea.
Certainly one can’t build an entire marketing plan or justify a full service commission on just Home Warranties; however, they are a great tool and when used properly and fully integrated into both marketing and ongoing service to clients it is a sparkly little facet that more than carries its own weight.
Next month I’ll discuss tying the Home Warranty to a pre-listing Home Inspection. Now we’re talking about a force multiplier and not just an additive effect.
Have a GREAT, SAFE and THANKFUL Thanksgiving Holiday.
We’ll see you ’round the mountains,
Don
Tags: Bent Tree Real Estate News, Home Warranty, North Georgia Real Esate
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