Memphis, Tenn., June 11 – A study conducted by
American Home Shield and a major national real estate company reveals that homes offered with warranty protection sold an average of 23 days faster than homes with no warranty coverage.
In addition, those same homes earned four percent more at closing than homes without coverage.
In a year where first-time homebuyers are expected to account for more than 50 percent of sales, home warranties could have an even bigger impact.
"Given the anxieties of first-time buyers, a home warranty could likely make a difference when they are comparing properties," said Mike Vazeii, Director of Real Estate Marketing for American Home Shield. "First-time buyers will be an important demographic this year, and the competition for their business will be fierce. Listings that come with a home warranty policy will likely have a distinct advantage with this group."
The study was conducted in conjunction with a large national real estate firm, and results were verified by Cannon & Company, a third party accounting firm. Data was compiled from 158,197 residential real estate listings that closed between Jan. 1, 2007 and March 31, 2008.
A variety of market factors are enticing first-time buyers. Interest rates are historically low, and the new federal stimulus bill provides for up to an $8,000 tax credit for first-time buyers that earn less than $75,000 ($150,000 for couples). The average cost of an existing home in 2009 is about $20,000 less than a home listed during the same period in 2008.
"Couple all this with the fact that first timers are unencumbered with selling an existing home and you have an excellent climate for new buyers," Vazeii said. "But selling successfully to first-time buyers requires an understanding of the unique perspectives they have."
Typically, first-time buyers are more anxious than experienced homebuyers because buying a home is likely the largest single purchase they have ever made. A variety of factors weigh on their minds: mortgage payments, a long-term commitment, the depletion of their savings and the added responsibility of owning a home and the expenses that come with it. They realize that unexpected major expenses may put them at risk of defaulting on their loan.
"Home warranties can do wonders for calming jittery first-time buyers who fear the unexpected," Vazeii said.
About American Home Shield
American Home Shield founded the home warranty industry in 1971 and remains the market-share leader in home warranties, servicing 1.3 million customers across 49 states. The Memphis-based company operates three customer service centers, employs over 1,800 employees and offers reliable service from over 11,000 independently insured and local contractors nationwide. AHS customers have total accessibility to request service 24 hours a day, seven days a week. A contractor will contact the customer to schedule an appointment during normal business hours. American Home Shield is part of the ServiceMaster family of brands, one of the world's largest and most versatile service networks.
About ServiceMaster
ServiceMaster currently serves residential and commercial customers through a network of more than 5,500 company-owned locations and franchised licenses. The company's brands include TruGreen, TruGreen LandCare, Terminix, American Home Shield, ServiceMaster Clean, Merry Maids, Furniture Medic, and AmeriSpec. The core services of the company include lawn care and landscape maintenance, termite and pest control, home warranties, cleaning and disaster restoration, house cleaning, furniture repair and home inspection.
