Home Warranties Boost Selling Price

American Home Shield (AHS), the exclusive RE/MAX Approved Supplier for home warranties, recently conducted two independent surveys.

1. One, a study of sales closed through the RE/MAX Equity brokerage in Oregon - measured the effects of AHS Home Warranties on a home's listing and closing price, and its time spent on the market.
    

2. The second - an online poll conducted through RE/MAX Mainstreet, was designed to evaluate if and why Broker/Owners and agents recommend home warranties.
   The RE/MAX Equity survey was designed to see whether homes listed with an AHS Home Warranty sell faster and closer to the list price than those without a home warranty of any kind.
    

The study was based on the brokerage's 2004 closed listings figures. To ensure integrity, Cannon and Company, a Memphis-based CPA firm, was used as a third party.

The findings:

• The median list price of homes with an AHS Home Warranty was 15.4 percent higher than homes without a home warranty.
   

• The median sales price of homes with an AHS Home Warranty was 14 percent higher than non-warranty homes. Homes with an AHS Home Warranty had a median sale price of $220,000 versus $193,000 for non-warranty homes.
   

• The median days on the market for homes with an AHS Home Warranty was 12.5 percent lower - or 63 days versus 72 days - than non-warranty homes.

The online survey, which drew 665 participants through Mainstreet, asked Broker/Owners and agents if and why they recommend a home warranty to their agents and clients respectively - and then, if they recommend AHS.

Mainstreet Survey results:

• Of the Broker/Owners who responded, 88 percent say they ask their agents to recommend a home warranty. Eighty-three percent of those Broker/Owners recommend AHS.
   

• Of the agents who responded, 92 percent say they recommend a home warranty to their clients. Seventy-three percent of those recommend AHS.
   

• When asked why they recommend a home warranty, 83.3 percent of Broker/Owners say it is to lessen the liability of both the agent and the Broker/Owner.
   

• Agents overwhelmingly state that they recommend a home warranty to ease clients' concerns.

Copyright © 2006 RE/MAX International Inc. 8/01/06