A good realtor's primary goal is to close deals efficiently while ensuring both buyers and sellers are satisfied with the transaction. Even still, it can be hard to compete in today's competitive real estate market, so having an edge can make all the difference. Home warranties are an overlooked realtor tool that can significantly speed up your closing process and boost your closing rates. Let's dive into how leveraging home warranties can help you close deals faster and what else a home warranty can offer you and your clients.
Understanding Home Warranties
So what is a home warranty? A home warranty is a service contract that covers the repair or replacement of major home systems and appliances that break down due to normal wear and tear. This typically includes items like HVAC systems, electrical systems, plumbing, and major appliances.
There are several different flavors of home warranties, including new home and existing home warranties. Both cover repair, though each may have a wait period, and different claim limits, for both the contract and the products covered.
Each can be excellent tools to increase closing rates and commissions earned!
Now, let's examine how home warranties can accelerate your closings.
Addressing Buyer Concerns Upfront
One of the biggest hurdles in closing a deal quickly is buyer hesitation. Potential buyers often worry about unexpected repair costs, especially in older homes. By offering a home warranty, you're proactively addressing these concerns. This can significantly reduce the time spent negotiating over minor repair issues or the condition of appliances, allowing you to move forward with the deal with the assurance that problems down the line will be taken care of. Note, though, that preexisting conditions aren't covered by a home warranty. Home warranties protect buyers from future repair costs, so appliances that are already broken before the warranty period won't be covered.
Simplifying Negotiations
When issues arise during a home inspection, negotiations can drag on for days or even weeks. A home warranty can serve as a compromise for this issue. Instead of haggling over repair costs or asking the seller to fix every potential issue, you can offer a warranty as a safety net, for future repair costs for new issues. This can help both parties reach an agreement faster, streamlining your negotiation process.
Increasing Buyer Confidence
A home warranty gives buyers peace of mind, knowing they're protected against unexpected expenses in their first year of homeownership. This increased confidence can lead to faster decision-making. Buyers who feel secure about their purchase are less likely to second-guess their decision or spend excessive time deliberating, which can speed up the closing process.
Differentiating Your Listings
In a market where multiple similar properties are available, a home warranty can make your listing stand out. This unique selling point can attract more potential buyers. More interested buyers mean more opportunities to close deals.
Overcoming Objections About Older Homes or Appliances
Older homes or those with aging systems and appliances can be challenging to sell quickly. Buyers often hesitate, fearing immediate repair or replacement costs. A home warranty can effectively address these objections, making it easier to close deals on properties that might otherwise linger on the market.
Appealing to First-Time Homebuyers
First-time buyers are often more cautious and take longer to make decisions. A home warranty can be particularly appealing to this group, providing an extra layer of financial protection as they step into homeownership. This can help you close deals with first-time buyers more quickly.
Facilitating Smoother Transactions
When both parties know a warranty is in place, there's often less back-and-forth about minor repair issues. This smoother transaction process can ease the negotiation process and not only speed up the sale but also address future concerns making the sale easier for both you and the customer.
Providing a Cost-Effective Solution
Offering to include a home warranty in the sale can be more cost-effective and quicker than negotiating repairs or price reductions, though again, the home warranty doesn't cover existing conditions. Future-proofing the home against future issues with a home warranty can prevent delays in closing and incentivize the home-buyer to buy a home as-is, making your timeline more flexible and without making costly time-intensive repairs.
Building Trust and Credibility
By recommending a home warranty, you're demonstrating that you have your clients' best interests in mind. This builds trust, which can lead to clients being more receptive to your advice throughout the process, potentially speeding up decision-making and closing.
Implementing Home Warranties in Your Real Estate Practice
To effectively use home warranties to close deals faster:
1. Educate yourself about the various warranty plans available from your provider. Being knowledgeable allows you to answer client questions quickly and confidently.
2. Introduce the concept of home warranties early in the process with both buyers and sellers.
3. Highlight the warranty in your marketing materials to attract more potential buyers from the start.
4. Use warranties as a tool to overcome objections during negotiations.
5. Partner with a reputable home warranty company to ensure your clients receive quality service.
6. Follow up with buyers after the sale to ensure they're utilizing their warranty if needed, further building your relationship for future referrals.
Here's an example: You're selling a 15-year-old home with original appliances. A potential buyer loves the house but is hesitant about the aging systems and potential repairs that may be required in the near future. Rather than replacing appliances or reducing the price, you offer a comprehensive home warranty offering protection on those appliances and much more with a trusted warranty provider. The buyer's worries are addressed and now they have protection for not only their appliances but a wide array of issues. What could have been weeks or months of expensive replacements or price negotiation is resolved in days, leading to a close rather than a delay or lost sale.
Conclusion
In the fast-paced world of real estate, anything that can give you an edge and help you close deals more quickly is invaluable. Home warranties are a powerful tool in your arsenal, addressing buyer concerns, simplifying negotiations, and differentiating your listings. By strategically incorporating home warranties into your real estate practice, you can potentially close more deals in less time, increase client satisfaction, and distinguish yourself in a competitive market.
Remember, the key to successfully using home warranties to speed up closings is to be proactive. Introduce the concept early, use it as a marketing tool, and leverage it during negotiations. With this approach, you'll likely see a noticeable improvement in your closing times and overall transaction smoothness.
OnPoint Warranty is a Different Kind of Home Warranty Company.
OnPoint Warranty was launched in 2018 by tenured and respected experts in service and warranty.
Our Whole Home Warranty products offer comprehensive, low deductible warranty protection for appliances, HVAC, plumbing and electrical systems, utilities and more, within and adjacent to, a home’s four walls.
Fully underwritten, 50-state whole home plans, available to realtors and property managers, home and auto warranty companies, builders and affiliates, improve market share across the US, while increasing renewal rates based upon excellent warranty service experiences administered by OnPoint.
Our white-labeled and branded whole home warranty plans can be offered during the listing period, at the closing or post-closing, seamlessly, reducing administrative costs for realtors, while increase closing rates and commissions, reducing unexpected repair costs for buyers.
fixHomz also provides realtors with real long-term revenue through high plan renewal rates driven by our best-in-class homeowner service experiences with OnPoint!
