Davenport Iowa Real Estate

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Home Warranties for your clients

How often do you have home warranties on your listings?

How often do you write home warranties on your offers?

Which home warranty company do you prefer and why?

What is the cost for the warranty?

What is the deductable for the warranty?

25 years ago I had a difficult time "selling" warranties to my clients.  They ran $600, were not very well known, and most people couldn't see the value in them.  I had one client, however, who received 2 new furnaces in a 4-plex that saved him over $5,000!

Today, it seems, we have extended warranties on everything from palm pilots to refrigerators and my clients prefer more often than not to protect themselves from unexpected expenses.  Two years ago, one of my client's garage door opener failed within a week of the closing.  She got a new one.  Then the dishwasher leaked and they totally replaced it!  Three months later her garbage disposal failed and once again, you guessed it, she got a new one!  She's my best spokesperson for home warranties!

Today, over 50% of my clients buying existing homes ask for the protection of a home warranty.  Similarly, over 50% of my sellers are requesting the protection as well.

TMI is my current home warranty company of choice.  They charge $395 with a $65 deductable.  There is an additional charge of $55 is the seller wants the additional coverage of the heating & cooling while they have the property listed.

Home Warranties just solve problems.  What do you think?

For info about Real Estate Anywhere in the World, please call:

LUCKY LANG, VOTED FAVORITE REALTOR®

Lucky Lang Davenport Iowa Real Estate for Sale

Lucky Lang, SRES®, RFC, M.I.S.

Licensed in Florida & Iowa

Premiere Plus Realty, 886 Park Ave. #103, Marco Island, FL 34145

Cell: (563) 676-9031

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Comment balloon 11 commentsLucky Lang • November 10 2006 07:43AM

Comments

My home warranty company of choice is 2-10 Home Warranty.  It is $305 and $75 trade fee/service call fee.  This is after the broker rebate is netted out ($380 regular price).

I figure I am doing my buyers and sellers a favor by saving them the $75 that normally would be rebated back to the broker and a percentage to the agent.  I believe the $50 or so an agent would receive is better spent by communicating to my clients that I saved them $75 on the home warranty than for them to find out I would be getting a rebate from their purchase of a warranty.

I know First American Home Warranty does this as well and there may be others.  I just went through the coverage line by line and felt 2-10 had better overall coverage, but I have not heard of TMI down here in Kansas.

Posted by Rob Lang, Local Expert in Lawrence Kansas Real Estate Homes (At Home Kansas) over 13 years ago

I thnk home warranties are great, I recommend them to all my buyers & sellers.

I also buy them myself for my lease/purchase properties to keep repairs costs to my leasee/buyers to a minimum. I put them in charge in all maintenance and upkeep to the property once they move in.

Posted by Jim Lee, Portsmouth NH Realtor, Portsmouth, NH (RE/MAX Shoreline) over 13 years ago
I never had warranties help in the sale of a property. I would use them more if I found that they really helped in the sale
Posted by Bob Pavey, CRS (RE/MAX Hometown) over 13 years ago
I ask my buyers if they want the home warranty and then I will buy it for them if it is not offered from the sellers.  I use American Home Shield which charges approximately $225.00 for the basic appliance protection package and as you add in other items, the price goes up.  The deductible is $50 and the warranty is good for one year. 
Posted by 1SG (Ret.) David Kucic, President and Owner (Hawaii Military Realty, Inc.) over 13 years ago
By the way, 2-10 has a buy down on the service call/trade fee that is very reasonable.  I'm sure some of the other home warranty programs have this as well.
Posted by Rob Lang, Local Expert in Lawrence Kansas Real Estate Homes (At Home Kansas) over 13 years ago

Hi Bob,

You wrote:  "I never had warranties help in the sale of a property."

I never looked at it to help sell a property.  I only looked at it to be one of many reasons why a client may want to stick with me as their agent, not just for a single transaction but for life.

Posted by Rob Lang, Local Expert in Lawrence Kansas Real Estate Homes (At Home Kansas) over 13 years ago
When I take a listing, I ask all my sellers to offer a home warranty. I see it as cheap insurance. I just know that when a buyer moves in, something will fail in the first month and they'll be looking to sue the seller and myself because we "should have known" the water heater was going to die or we should have disclosed that the roof was going to leak the first time it rained. Murphy's law always strikes and I'd rather be covered. If the seller won't pay, I'll write it in the contract "broker to pay for warranty" and I take it out of my commission. If I'm working with a buyer, and the seller isn't offering a warranty, than the warranty becomes my closing gift to the buyer. Either way, I want one year of ownership with NO problems.
Posted by Kerry Harvell (Realty World-American Dream Realty) over 13 years ago

Kerry,

My brother, Rob Lang (comments above) does the same thing.  I'm starting to come around to that thinking but am still having a difficult time with giving up my commission.  It's sort of like K-Mart discounting "blue-light" specials.  I feel as though my commission was stated and contracted for in the beginning with services agreed upon.  If I become a part of the negotiation process with commission, it's almost like I'm saying that I didn't perform my duties as agreed and need to compensate the parties accordingly. 

The debate in my head continues!

Thanks for commenting.

Lucky :)

Posted by Lucky Lang, Marco Island & Naples Florida Real Estate (Premiere Plus Realty Marco Island) over 13 years ago

Lucky, when I talk to sellers during a listing presentation, I use this analogy.

 

 

If you were to go down to the dealership and buy a new car, would it matter to you if they offered a warranty or not? Would it help sell one model over another?

Posted by Kerry Harvell (Realty World-American Dream Realty) over 13 years ago

Hey DB (dear brother or designated brother-two more acronyms for your acronym blog) Lucky,

I never thought of the fact that I pay for the home warranty for every home someone buys or sells through me as discounting my commision or that I wasn't worth every penny of my commission.  I only saw it as the cost of doing business.

I look at this as a means to an end that I am doing everything possible to assure I can service the client for life and be entrusted to receive their referrals because they saw I went the extra mile for them.  If I only looked at "my commission" and that single transaction as the end, then I believe it probably would be.

Yep, a home warranty is just as much the cost of doing business as a business card and definitely of more value than a refrigerator magnet to my client.

DB Rob

Posted by Rob Lang, Local Expert in Lawrence Kansas Real Estate Homes (At Home Kansas) over 13 years ago

Rob,

Okay, time to take out the ax!  I've sharpened it well so it will split these hairs easier.

You commented that if you looked "only" at your commission...well, come on, if that was the "only" thing that we looked at we wouldn't do any advertising of their property in newspapers, television, radio, billboards, websites magazines, flyers, postcards, nor pay for meals while out all day showing houses, ride in their vehicle to see homes, not volunteer in the community, not be involved in Active Rain (or any other media vehicles), etc.

There is a place on our warranty registration to check paid for by buyer or seller, it doesn't say Realtor for a reason.  It isn't our negotiation.  Our commission and services are agreed in contract prior to listing or buying transactions. 

If you want to give your clients more of a value, and that seems to be your driving reason here, than rebate the entire commission to them!  You would almost guarantee their return business and many referrals, at least until you go broke! 

I establish value by following through with the services we agreed upon, selling their home, or finding their "dream home".  There is more to my services than this but for now I need to go.

Again, I'm listening to your position, I'm just not there yet.  Maybe I won't ever be.

Time to put the ax away.

Thanks for commenting,

Lucky :) 

Posted by Lucky Lang, Marco Island & Naples Florida Real Estate (Premiere Plus Realty Marco Island) over 13 years ago

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