It’s a familiar scenario these days in neighborhoods across the country.
A financially distressed home goes on the market.
It might be a short sale situation or a foreclosed/REO home.
It’s likely a good deal for a prospective buyer, but the property has been vacant for while, the utilities have been cut off and the home does not look like it’s been well maintained. Should a home warranty be included in this transaction?
The answer, according to many experienced real estate professionals, is a resounding yes. Many experts agree that home warranties are particularly advantageous for foreclosure, REO and short sell transactions for numerous reasons. When the condition of home appliances and systems is unknown or questionable, an American Home Shield Home Warranty can add protection from expensive and time-consuming breakdowns for the buyer. An AHS Home Warranty can also be a powerful service component and marketing tool, differentiating properties from others on the market, attracting interest and giving buyers the necessary confidence to proceed with the purchase.
Complete and thorough home inspections on such properties may not be possible without access to utilities, making the condition of home systems even more uncertain. It’s also a well-known, unfortunate fact that owners anticipating foreclosure may stop caring for and maintaining the property, leaving systems and appliances in precarious shape. In fact, buyers express more concern regarding financially distressed properties than any other type of property. An AHS Home Warranty alleviates many of these worries, and can offer budget protection to the buyer as well as to future resale buyers under the term of the contract. In short, an AHS Home Warranty is one of the best, most cost effective investments a buyer can make to help preserve the value of an REO property.
In addition to the buyer, there are many benefits that an AHS Home Warranty can bring to other parties involved in real estate transactions of financially distressed properties. For sellers, adding an AHS Home Warranty to the listing may help the property move faster and can help protect the asking price by discouraging downward price negotiation. For REO banks and asset managers, a faster sale can mean reduced inventory carrying costs and expenses. Having an AHS Home Warranty attached to a listing can alleviate buyer concern and can increase satisfaction with the sale, which can lead to future referrals for home loans on other properties.
Home warranty protection offers many advantages for REO real estate agents, as well. In every real estate transaction, an AHS Home Warranty is viewed as a value added service. By offering a full range of professional services, including home warranties, agents can enhance their perception and reputation as knowledgeable, industry-savvy experts. It’s also important to remember that REO buyers today are the traditional buyers and sellers of tomorrow, and home warranties help increase client satisfaction and build long-term relationships, repeat business and referrals. When soliciting REO business from a bank, it is important for agents to show that they offer a full portfolio of professional services, including home warranties.
Liability is always a concern with any deal, even in REO “as is” transactions. An AHS Home Warranty can help prevent after-sale problems by reducing agent involvement and lessening agent liability after closing. If something breaks, clients can call AHS, not the agent. An AHS Home Warranty helps protect the seller from many post-sale issues, too.
With the innovative AHS Home Warranty FlexPlan, clients can choose a coverage level for exactly what they need. In addition to the AHS Core Coverage Plan, the ServicePlus Package and CoveragePlus Package can be added for extra layers of protection. The Core Coverage Plan now includes provisions for insufficiently maintained equipment, and the ServicePlus Package contains coverage for undetectable pre-existing conditions, important considerations in REO transactions.