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And The Deal Fell Apart Because No One Would Pay For The Home Warranty? |
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Written by Webmaster
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Monday, 14 July 2008 |
By Dave Clocker
 The Home Warranty is sometimes for critical for the homebuyer, however, it may become an issue of who will pay for the warranty coverage for the buyer. I know of a listing agent who said it was not possible for him to help pay for the home warranty for the seller. Why not? The agents line of reasoning was that he felt he had already put in too much in marketing the property, yet the transaction was on the verge of becoming non-existent because the seller was stubborn and would not pay for it. I just can't believe that some agents won't pay for the warranty just to help close the dealespecially if it means the difference between closing the deal or losing it all.
The cost of the Home Warranty is usually between 300 to 400 dollars, which I don't think is that much. It's funny how some agents step over the dollars to get to the dimes. As listing or selling agents, it is wise to look at the overall picture and then to pay for the warranty cost if the
situation depends on it so that the transaction can meet a satisfactory closure.
I have read ads from listing agents who actually offer to BUY the Home Warranty for the Sellers to give to the buyers if the Sellers list their homes with them. I think this is a great marketing incentive but I don't know how effective it is. As a listing agent, do you usually pay for the Home Warranty to give to the Buyers?
The above question is what I posed to the real estate agents at a forum. Ive summarized below the many responses from those who replied to the question. One agent responded that she agreed that many agents step over the dollars to get to the dimes and she makes whatever adjustments and credits are needed to close out the transaction successfully. Another agent indicated she pays for home inspections on the buyer side and her broker offers to pay for the home warranty. A few agents indicated the home warranty is a common staple in all their listings. They feel that for the cost, it is better to have it just in case any future problems arise. Several agents stated they offer to pay for the warranty as an incentive to get the listing and as a means to make the property more attractive to both the sellers and the buyers involved.
There are agents who indicated they do not purchase the home warranties for the seller and rather, they always urge their sellers to pay for it and they explain the advantage of getting the warranty as it protects the sellers. In fact, they will suggest that the seller include the warranty for the listing period since it makes the home easier to sell and many buyers are going to ask for it anyways. There were some cases cited where the sellers paid the $300-400 for the warranty, and they ended up getting good mileage from the warranty plan since it covered some of the repairs that they needed to complete in order to sell the home. So, overall in these cases, the sellers actually saved money by having the warranty in place since they would have otherwise had to pay for the repairs out of their own pocket. The agents feel that most sellers dont mind paying for it unless money is very tight.
Of the agents surveyed, it was unanimous that if it was between getting a deal closed now or waiting for a new buyer, they definitely would pay for the warranty. Although, they would probably try to get the other agent to split the costs since many times, most agents will help with the home warranty costs if the seller refuses to pay for it. Should the selling agent refuse, the listing agent would pay for it just to get the deal done. Part of the fun in real estate is that there is bargaining room and if it makes sense for the listing agent to pick up the tab, they will take on the expense.
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Last Updated ( Monday, 14 July 2008 )
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