Remember the Avis Rental Car ad "We try harder because we have to" - That's what comes to mind when I think about today's real estate market.
When this ad campaign was first launched in 1962, Avis was an unprofitable wannabe, while Hertz was the rental car leader. Within a year, Avis began to generate a profit and, by 1966, their market share had increased from 11% to a whopping 35%. The rest, as they say, is history!
It was a good slogan, but Avis didn't just talk about trying harder - they actually did it! In fact, before they even launched the "We Try Harder" campaign, they set out to overhaul their customer service and improve their product. Now there's a timeless plan for improving business and increasing sales, if I ever heard one!
In today's real estate market, "We try harder" is a practice that both home sellers and real estate professionals should adopt to differentiate themselves and their homes from the competition.
One strategy for "trying harder" might be to offer a home warranty so prospective buyers will have peace of mind that is just not available with other homes or listings for sale that don't have a warranty.
The reason is clear: Because of today's tightened loan criteria, many buyers are using all or most of their available cash to purchase a home. That's why they want a home in good condition that won't require expensive updating or repairs - buyers simply won't have much cash left after settlement, now that down payment assistance programs have been legislated away and 95% conventional loans have disappeared.
A home warranty that protects home buyers from expensive repairs or replacements of all major appliances and systems could mean the difference between a sale or not because home buyers want these benefits:
- Protection of all major appliances and systems 24 hours a day, 7 days a week... 365 days a year!
- Coverage of all major appliances and systems, regardless of age, make or model.
- Repair or replacement at minimal cost to the buyer (a small deductible).
However, buyers are not the only ones to benefit when sellers offer a home warranty. Just look at these figures from independent surveys, showing that a warranty helps sellers get more money and sell more quickly:
- 8 out of 10 people prefer to buy a home that DOES have a warranty. (Gallup Poll)
- Homes with a warranty sell 50% faster. (National Home Warranty Association)
- Homes with a warranty sell for 3% more (Business Week)
Additionally, some warranties cover all or some of these items while the home is for sale. One word... WOW!
How do sellers go about getting a home warranty? Just ask your listing agent. Most real estate companies offer warranty programs from several independent insurers. The cost is usually less than $500, and your agent will probably handle the paperwork for you. More good news: No money up front. Warranties are paid for at settlement, and there's no fee if there's no settlement.
A home warranty is a small investment because it says to buyers, We Try Harder - in other words, BUY ME!
Home buyer warranty companies you might want to check out: HMS, AHS, 2-10
Photos: istockphoto
Copyright 2008. All Rights Reserved. Margaret Woda. Why Home Sellers Should Offer a Warranty
Copyright 2006-12. All rights reserved.
DISCLAIMER: Information contained in this post is deemed reliable on the date of publication, but it is not guaranteed and it is subject to change without notice.
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Margaret Woda, REALTOR and Associate Broker
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I think that's a great idea....anything to seperate yourself from the other homes
Wonderful advise regarding the home warranty. Definitely a plus in my book!
Margaret,
Our company encourages us to ask sellers to provide home warranties as it covers them during the time of the listing as well as their buyers for a full year after closing. Win - win is always good.
Margaret, home warranties are actually on and apart of our standard NC offer to purchase! So when listing it's almost a no brainer to offer it up front - at least get the marketing mileage. We provide seller coverage at no charge to the sellers during the listing period. It's a company policy. And one very well received!
Raleigh Realtor - Pamela St. Peter
Morning Margaret,
We encourage all our homeowners to provide a Home Warranty. The cost is minimal and doesn't have to be paid until closing.
Buyers appreciate the bonus and peace of mind that comes with it.
Logger Zean - I appreciate your comment, but it has been deleted. Please read the ActiveRain guidelines (link on the Active Rain Home Page).
Hal, I don't leave it to chance... I include one for my listings, at my own expense!
Lee and Pamela - It's mentioned on our listing info sheet, and in our Contract - but it's still not used nearly often enough.
Judy - So true!
Sally - Thanks, Sally
Travis - Yes, that's the point!
I don't know if I agree with the stats but I do know that if a seller isn't offering a warranty, I'll make sure my buyer gets one during the negotiation process. I also tell my sellers that it gives the buyers piece of mind after the sale.
Margaret: Good article -- very informative