New Study: Home Warranties Increase Home Sale Prices, Reduce Length on the Market for Owners

TALLAHASSEE, Fla. -- Houses covered by a protection plan sell faster and bring their owners a higher sales price than those without such a service contract, according to the findings of a recent industry study of home sale prices. The Service Contract Industry Council (SCIC) said these findings demonstrate how home sellers can benefit from a service contract even as buyers gain the service contract's protections.

"Purchasing a home is a significant investment and can create tremendous anxiety. Fortunately, because home warranties can be transferred to the new owner, buyers are finding that the extra protection of a service contract can ease this apprehension," said Tim Meenan, SCIC executive director. "Home buyers understand that when it's time to sell in the future, the home will have an increased resale value."

The recent home sales study of customers conducted by SCIC member company American Home Shield found that homes covered by protection plans spend almost 11 fewer days on the market on average, and sell for more than $2,300 higher on average than homes sold without a home warranty. The ability to transfer a home warranty to new owners helps create added incentives for buyers.

With housing sales increasing amid the economic rebounds, home warranties make sense to help increase the home's marketability, Meenan said. The resale benefits are in addition to the primary reason homeowners purchase warranties: the peace of mind that comes from knowing the extra protection will cover everyday breakdowns due to defects or even normal wear and tear during the life of the contract. When a problem does arise, contract holders know they can request service around the clock.

Depending on the terms of the contract, the systems and appliances that can be covered in a home service contract may include:

• Electrical system
• Air conditioning or central heating
• Water heater
• Washer and dryer
• Stovetop, microwave, oven, refrigerator, dishwasher or trash compactor
• Interior plumbing
• Pool/spa equipment
• Ductwork

Service contracts help homeowners avoid unexpected, potentially large repair and service bills, as well as inconvenient wait times for repairs. To learn more about where to buy a home service contract or tips on using a protection plan, see go-scic.com/homes.

The Service Contract Industry Council is a national trade association whose member companies collectively offer approximately 80 percent of the service contracts sold in the United States for home, auto and consumer goods. The SCIC educates consumers about service contracts, encourages its members to pursue high standards of customer satisfaction, and has developed and promoted model legislation to regulate the industry with standards designed to protect consumers and the industry.

SOURCE Service Contract Industry Council

HomeWarrantyReviews.com Announces 2013 Award Winner

GRANDVILLE, Mich., Jan. 2, 2014  -- HomeWarrantyReviews.com, the nation's top home warranty consumer review site, has announced its 2013 Home Warranty Awards winners, recognizing top performers based on consumer reviews and customer satisfaction metrics. Home warranties offer consumers professional repair services and protection against unexpected repair costs related to the breakdown of major systems or appliances; covered items vary by company and plan selected.

Awards were presented in three categories: Top Rated, Best in Service and Best Regional Company. Each category had three nominees based on 2013 performance. Home Warranty of America (HWA) received the Top Rated Company award, American Home Shield received the Best in Service award and LandMark Home Warranty received the Best Regional Company honor.

Consumer reviews from the website are collected and analyzed to form the basis of evaluating nominees for the awards. Customer satisfaction metrics, such as claims approval rate and customer retention rate, are also considered when selecting winners of 2013 home warranty awards.

"Choosing the winners was a challenging task this year," said Krupesh Bhat of HomeWarrantyReviews.com. "Many companies improved customer satisfaction levels from last year, leading to several highly contested awards. We reviewed claims approval and retention rates, and also evaluated how companies made use of various social media and other online channels to address consumer issues."

"Our customers place over 3 million service requests a year, and our employees work with nearly 10,000 contractors across the country to deliver quality service every step of the way," said Mark Barry, president of American Home Shield, which received the Best in Service Award this year. "We're honored to win the award for many reasons, but especially because it's based on customer feedback and it reflects the great work of a great team."

"Service to our homeowner customers, agents and vendors is always our top priority," said Harry Keifer, National Sales Manager of HWA, which received the Top Rated award. "We have seen tremendous growth in 2013 largely due to our competitive warranty plans, friendly customer service and expert sales team. This award reflects the hard work of our entire team to provide excellent customer service every day."

Alma Jeppson, CEO of Landmark Home Warranty was delighted to receive the Best Regional Company award and said they consider this business as an opportunity to bless the lives of many.  "That includes our homeowners, contractors, real estate professionals, and staff.  We consider that group to be the 'Landmark Family' and hold a deep sense of responsibility to serve each of them," said Jeppson.

HomeWarrantyReviews.com offers consumer reviews and ratings for all major home warranty companies. The site's "compare home warranty section" is a quick tool for researching home warranty companies and their offers before purchasing a policy.

About the AwardsHomewarrantyreviews.com is an independent website that hosts more than 15,000 consumer reviews. The site was founded in 2006 to help consumers make informed decisions as they consider home warranty coverage. Through its annual awards program, the website recognizes top-rated companies based on consumer ratings and reviews, as well as other customer-satisfaction metrics.

About the Winners  American Home Shield founded the home warranty industry in 1971 and remains the industry leader, servicing more than 1.3 million customers across 49 states. The Memphis-based company has a national contractor network of more than 10,000 independent home-service contractors, including over 45,000 technicians. AHS is a business unit of The ServiceMaster Company, one of the world's largest residential and commercial service networks.

Home Warranty of America has been in business since 1996 and prides itself on being an innovative and eco-friendly leader in the industry. The company offers comprehensive 13 month warranty plans at a great value with easy, reliable solutions for unexpected problems. 

Landmark Home Warranty, headquartered in South Jordan, Utah, was established in 2005 and currently covers Utah, Arizona,Texas and Oregon. The company has been growing at an incredible pace, with an average revenue increase of 80 percent per year and prides itself on delivering remarkable service to their customers, communities, and their partners.

SOURCE American Home Shield

RELATED LINKS
http:www.HomeWarrantyReviews.com

Explaining the Home Inspection

Realtor.com®'s January Trend Data Shows Ripe Conditions For Home Values Increasing in the New Year

SAN JOSE, Calif. -- Realtor.com®, a leader in online real estate operated by Move, Inc. (NASDAQ: MOVE), released its January data on the U.S. housing market today, offering valuable insight into the latest real estate trends. Realtor.com®'s January 2013 national housing data indicates that listing inventories decreased 16.47 percent year-over-year; median age of inventory was at 108 days, a 9.24 percent decrease year-over-year; and median list prices are slightly higher increasing .80 percent year-over year to $187,000.

The findings indicate opportunities in local markets for both buyers and sellers. With inventories at record lows and list prices increasing, Realtor.com®'s 2013 Best Sellers Markets are Sacramento, CA; San Jose, CA; San Francisco, CA; Phoenix, AZ; and Washington, DC. For consumers looking for a competitive edge heading into the busy spring buying season, Realtor.com®'s Top Buyers Markets are Asheville, NC; Peoria, IL; Charleston, WV; Philadelphia, PA; and Cleveland, OH.

"We connect consumers to the home of their dreams by delivering the most comprehensive selection and accurate housing data for homes currently on sale or for rent," said Steve Berkowitz , chief executive officer of Move, Inc. "If inventories remain low and list prices begin to rise over the next few months, as they did last year, conditions will be ripe for additional markets to appreciate in 2013."

National Data
In January, the total number of single-family homes, condos, townhomes and co-ops for sale in the U.S. decreased by 16.47 percent from one year ago, dropping to its lowest point since January 2007, when Realtor.com® began collecting this data. The significant year-over-year decline in homes for sale shows that the real estate market has worked through much of its excess inventory and, if these conditions continue, sellers are more likely to receive their asking price. While the median list price is essentially the same as it was one year ago, the average amount of time a home spent on the market decreased 9.24 percent on a year-over-year basis.

The national for-sale inventory for single family homes, condos, townhomes and co-ops (SFH/CTHCOPS) (1,477,266) continued to decline in January, falling by 5.63 percent during the month and by 16.47 percent on an annual basis.
The national median list price for SFH/CTHCOPS ($187,000) increased .80 percent in January and is now slightly higher than it was one year ago. 

The median age of inventory of for-sale listings was 108 days in January, down 2.70 percent from December and 9.24 percent below the median age one year ago (January 2012).

Local Data
Regional January data suggests that at a local level, trends for both growth and decline observed in 2012 are continuing into 2013. States that were once at the center of the housing crisis, including Arizona, California and Washington, are continuing on upward trajectories. In several markets, particularly in California, home sellers are seeing a dramatic advantage when putting their homes on the market with some of the best prices in recent years. Alternatively, markets in the older industrialized parts of the Midwest and the East will likely continue to struggle without a significant turnaround in their local economies.

Realtor.com®'s 2013 Best Sellers Markets are Sacramento, CA; San Jose, CA; San Francisco, CA; Phoenix, AZ; and Washington, DC.

Realtor.com®'s Top Buyers Markets are Asheville, NC; Peoria, IL; Charleston, WV; Philadelphia, PA; and Cleveland, OH.
A number of factors will contribute to the continuation of a housing recovery this year, including the strength of the economy, the cost and availability of mortgage credit, consumer expectations regarding future housing prices and the success of efforts to reduce the number of foreclosures.

Realtor.com® regularly tracks real estate data and develops monthly reports featuring the number of listings, median age of inventory and median list price across the U.S. and in specific markets, as well as provides year-over-year and month-over-month changes. These reports are the only ones pulled directly from the Realtor.com® database that updates every 15 minutes from more than 800 multiple listing services. For more information, please visit www.Realtor.com.
PR Newswire (http://s.tt/1zNIX)

Questions to Ask When Shopping for a Home Warranty

When you buy a pre-existing home, you want to make sure that your Realtor negotiates into the contract a residential service contract (RSC), also known as a home warranty.For home buyers, that means that don’t have to worry if something goes wrong. For the seller, that means that they don’t have to worry about surprises haunting them once they’ve moved on. For a nominal charge - usually about $60, the RSC company will repair or replace many of the common mechanical systems and appliances found a residence should they wear out due to normal use.

These systems typically include HVAC systems, plumbing, electrical, oven, range, cook tops, built-in microwaves, trash compactor, disposal, water heaters and garage door opens. You also can purchase optional packages to cover permits, the hauling away of old equipment and limited code upgrades, kitchen refrigerators  built in wine coolers, washers and dryers, pool/spa equipment and septic system, septic plumbing and well pumps. Some policies even offer coverage for termites and pest control.

RCSs typically won’t cover the roof, the foundation or anything structural. They also won’t cover routine maintenance.

But for systems that just wear out, RSCs are a life saver! Such contracts have personally saved me thousands of dollars in repairs through the years and eased a lot of raging headaches when diswashers and garbage disposals wear out.

The catch phrase is “normal wear and tear.” Cosmetic defects typically aren’t covered. Nor is damaged caused by pets or misuse.

While most RSCs cost roughly the same, they’re not all created equal. Different policies have different limitations and exclusions. When your Realtor hands you an armload of literature, it helps to know upfront what you’re looking for and the questions to ask. Here’s a few to get you started:

• Does the policy have an “obsolete parts clause”? An obsolete parts clause says that if the part to fix your system or appliance is no longer available, the RSC provider can just pay you for the cost of the part. The won’t pay to fix or replace your failed system or appliance.
• Does the policy cover appliances or systems that break due to previously poor maintenance? Will it cover problems not detected during the home inspection process? During your home inspection, you can catch some problems and your Realtor can negotiate to have them fixed prior to closing on the home. However, a home inspection typically doesn't include the same level of inspection that say an HVAC tech would do. If an HVAC system breaks down because the coils were cleaned as scheduled, then some policies won’t cover it.
• Does the policy cover problems that arise from incorrect installation? Recently we had a client who purchased a pre-existing home with an above ground spa. When the spa was installed, it required a new breaker box. The breaker box worked fine for the original owner, but failed within weeks of the new owner moving in. The RSC provider wouldn’t cover the repair because the new box was incorrectly installed in the first place.
• Does the policy cover pre-existing conditions? If so how does are pre-existing conditions determined? Most policies won’t cover “known” pre-existing conditions. They also may place limitations on unknown pre-existing. For example, many companies would cover rust and corrosion claims made within the first 30 days that policy is in effect.
• Does the RSC cover upgrade costs when a system has to be replaced? This is particularly important to ask if the home still has a SEER 10 system or one that uses Freon. New EPA mandates mean that SEER 10 systems and systems that use Freon are being phased out. When a SEER 10 system finally wears out, it will have to be replaced by the new standard. You’ll want to make sure that your RSC covers that hefty expense.
• How much is the additional coverage for optional coverage for pool/spas, septic systems and for homes over 5,000 square feet in size? This is important to know because if you don’t ask for enough from the seller to cover the cost, you could end up paying for the additional coverage yourself.
• How much is the second year of coverage? Again, this is important to know because you will be responsible for your own coverage after the first year.
• Is the RSC provider licensed by the Texas Real Estate Commission (TREC)? Since 1979, all RCS providers in Texas have to be licensed by TREC.
• Is the RSC provider a member of the National Home Service Contract Association? More than 90 percent of all RCSs written in Texas are done by association members/ Association members are required to adhere to standards of practice and offer the best recourse. In recent years, a lot of Internet-based RCS companies have popped up that are not licensed nor a member of the association. If they’re not, then you might not have any resource if they refuse to pay claims or disappear over night.

The best time to start shopping for a home warranty is when you start shopping for your new home. Ask your Realtor for information and recommendations early in the home shopping process. You’ll want give this important decision the attention it deserves. And not allow it to get lost among the hundreds of other decisions you’ll make in the purchase of your new home.