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Home Warranties Lead to Faster Sales, Higher Sales Prices

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According to a recent home sales study conducted by American Home Shield, the nation’s leading provider of home warranties, homes sold with one of the company’s home protection plans spend an average of almost 11 fewer days on the market and sell at a sales price that is an average of more than $2,300 higher than homes sold without a home warranty.

In an economy where every additional day that a home sits on the market is a missed opportunity and every dollar a seller can recover from a home sale is important, a real estate professional’s ability to know about every advantage and offer every incentive has become critical.

“As we enter the peak season for listings, American Home Shield wants to arm real estate agents and sellers with the best information that will help sell homes,” says Laird Hamberlin, vice president of sales, American Home Shield, a business unit of The ServiceMaster Company, LLC, one of the world’s largest residential and commercial service networks. “Our home protection plans are valuable and we wanted to illustrate how homes protected by them measure up against homes that aren’t protected by a home warranty—in terms that real estate professionals could use. We conducted the study to do just that and the results showed compelling evidence about marketability.”

According to the analysis of home sales data provided by a large national real estate firm and American Home Shield, the average sales price of homes with an American Home Shield home protection plan was higher than non-warranty homes:

• Homes with a home protection plan had an average sales price of $254,682; homes without a warranty had an average sales price of $252,368
• The difference is $2,314—almost four times the average price of an American Home Shield home protection plan

Additionally, the homes with an American Home Shield home protection plan sold an average of almost 11 days faster than those without one:

• The average number of days listed was 55.8 versus 66.5 for non-warranty homes – or about 16 percent faster

“In addition to the selling-power that home warranties add, it is also important to remember the pressure that they take off of sellers,” added Hamberlin. “If a covered appliance or home system component breaks down during the listing period, it protects the homeowner’s budget. And there is no cost until the sale closes. Our data shows that home warranties can help pay for themselves.”

Home warranties are also important risk management tools for home sellers. They protect the seller, buyer and agent by transferring risk to a party that is most-equipped to deal with it—a home warranty company. For more information on how agents and home sellers are partnering to include home warranties in their new listings this spring, visit the Seller Benefits on the American Home Shield website.

For more information, visit http://www.ahs.com.

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