A plan for the pitch: How to sell home warranties

Peace of mind is invaluable, but sometimes it can be hard to sell. Real estate professionals understand the advantages of home warranties for all parties involved, but it can be challenging to share the benefits with a prospective seller or buyer.

How Does a Home Warranty Benefit All Parties in a Real Estate Transaction?

In short, Home warranties often protect the deal for real estate agents, buyers and sellers. These plans cover the repair and replacement of the major systems and appliances in the home. For instance, a home heating system that stops working can be a significant blow to a homeowner’s budget. However, that’s not something that person will have to worry about with a home warranty. The cost of the repairs is covered by the plan. Dishwashers, air conditioner units and many other home essentials are covered by various home warranty plans.  Additionally, a home warranty is a free marketing tool that agents can use as part of their listing strategy since payment for the warranty occurs as part of the closing. Properties that are listed with a home warranty are found to be more appealing by buyers, which makes the buyer more comfortable with their decision to purchase a property closer to the asking price. Offers closer to the asking price reduces the erosion of an agent’s commission. One of the many hurdles a seller’s agent faces is getting the home to closing. If a major system or appliance encounters a mechanical failure during the listing period and a home warranty is in place, a seller’s agent can leverage the warranty to prevent a delay in the home closing.

Buyer’s agents can take advantage of a home warranty in three ways. The first is to use it as a cost saving tool for their clients during the first year of home ownership and longer if the buyer chooses to renew their warranty. Secondly, it can be used as a risk mitigating tool should a major system or appliance fail after the home closes. The buyer’s agent simply has to refer his or her client to the home warranty administrator. Thirdly, the most important value a home warranty provides for an agent is the opportunity to keep in touch with past clients. Most home warranty companies send a communication to the agent when an item has been repaired or replaced. This is the perfect opportunity to reach out, catch up with clients and ask for a referral.


Developing an Effective Home Warranty Pitch

Just as with anything in life, practice makes perfect. The first step an agent could take to formulate their presentation is to make a list of the benefits to a seller in their own words. From there, an agent should refine the message to a one-two minute statement that he or she feels comfortable presenting to a potential seller. For example: I think it is essential to have home warranty during the listing period. I always suggest one to my sellers as it makes your home more appealing to potential buyers! It offers you protection if a system or appliance fails and payment of the warranty occurs at closing. We can start the listing coverage immediately.

For buyer agents, take the time to educate your clients on the benefits and advantages of using a home warranty. Explain how the warranty fits with the home inspection – an inspection is simply one look at the home, whereas a home warranty provides coverage after closing. Here’s an example: Your new home is one of the most important investments you’ll make. A home inspection may uncover issues that need to be fixed, but you’ll never know what comes next. You don’t want anything to break, but if it does, a home warranty offers resources to help you fix any breakdowns and assists in keeping home systems and appliances running smoothly.

In the end, everyone wins with home warranty coverage. Remember to consider extra protection, such as combo or additional items. Even upgrade options may increase client satisfaction further. Incorporating a home warranty into a listing presentation or offering it as a risk management tool for your buyers is not only a best practice of top producing agents, but also offers assurance for future peace of mind.


Brought to you by HMS Home Warranty.  HMS is an industry leader with over 30 years of creating success for clients and providing peace of mind for customers.  To learn more click www.hmsnational.com 

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