When it comes to selling your home, you want to maximize its value and appeal to potential buyers. One strategy that’s gained popularity among sellers is offering a home warranty. But does having a home warranty really increase the value of your home when selling? In this blog post, Nisswa real estate experts Diane Pogatchnik and Dan Schueller explore if having a home warranty increases the value of your home, the potential benefits, and impact of including a home warranty in your home sale.
Key Takeaways:
- Homes with warranties tend to sell for 1-3% more than those without
- Properties with home warranties often sell faster, up to 11 days quicker on average
- Home warranties can be a powerful marketing tool, giving your listing an edge
- Offering a warranty can provide peace of mind to potential buyers
- Warranties can serve as a useful negotiation tool during the sales process
The Value Proposition of Home Warranties
A home warranty is a service contract that covers the repair or replacement of major home systems and appliances. For sellers, offering a home warranty can be an attractive proposition for several reasons.
Increased Sale Price
One of the most compelling reasons to consider a home warranty is its potential impact on your home’s sale price. Studies have shown that homes with warranties can sell for 1-3% more than comparable homes without warranties. In fact, one study found that homes with warranties sold for an average of $2,300 more than those without.
“In my experience, offering a home warranty can often lead to a higher sale price,” says Minnesota real estate expert Dan Schueller. “Buyers are often willing to pay a premium for the peace of mind and protection that comes with a warranty.“
Faster Sales Process
Not only can a home warranty potentially increase your sale price, but it may also help your home sell faster. Research indicates that homes with warranties tend to sell nearly 11 days quicker on average compared to those without. In a competitive market, this speed advantage can be crucial.
Marketing Advantage
In today’s real estate market, anything that sets your property apart can be a significant advantage. A home warranty can make your listing more attractive to potential buyers, giving you an edge over similar properties that don’t offer this protection.
Buyer Peace of Mind
One of the primary reasons a home warranty can increase your home’s value is the peace of mind it provides to buyers. Purchasing a home is a significant investment, and many buyers worry about potential repair costs after moving in. A warranty helps alleviate these concerns, making your property more appealing and potentially more valuable in the eyes of prospective buyers.
Powerful Negotiation Tool
A home warranty can also serve as a useful tool during price negotiations. If a buyer expresses concerns about the age or condition of certain systems or appliances, you can point to the warranty as a safeguard. This can help you maintain your asking price and potentially avoid costly repairs or price reductions.
Deal Saver
In some cases, offering a home warranty can be the difference between closing a sale and losing a buyer. If a potential buyer is on the fence due to concerns about future repair costs, the added protection of a warranty might be enough to convince them to move forward with the purchase.
Financial Protection for Both Parties
A home warranty doesn’t just benefit the buyer; it can also provide financial protection for you as the seller. Most warranty companies offer seller’s coverage during the listing period, which can protect you from unexpected repair costs while your home is on the market. This coverage then transfers to the buyer at closing, providing continued protection and value.
Considerations When Offering a Home Warranty
While the potential benefits of offering a home warranty are clear, it’s important to consider a few factors:
- Cost vs. Benefit: The cost of a home warranty typically ranges from $300 to $600 per year. While this is relatively low compared to potential increase in sale price, you’ll need to weigh this cost against your specific circumstances.
- Home Age and Condition: The value of a home warranty may be more significant for older homes or those with aging systems and appliances.
- Market Conditions: In a strong seller’s market, a warranty might not be as necessary to attract buyers. However, in a more competitive market, it could give your listing a significant edge.
- Buyer Preferences: Some buyers may prefer to negotiate a lower price rather than receive a warranty. Be prepared to be flexible in your negotiations.
Is a Home Warranty Right for Your Sale?
While offering a home warranty can potentially increase your home’s value and appeal when selling, the decision ultimately depends on your specific situation. Factors such as your home’s age, condition, the local real estate market, and your sales goals all play a role in determining whether a home warranty is a smart investment for your property.
Call Diane Pogatchnik and Dan Schueller
If you’re considering selling your home in the Nisswa area, including lakefront properties, Dan Schueller, Diane Pogatchnik, and the team at Your Home Sold Guaranteed Realty Exclusive are here to help. With their extensive experience and deep understanding of the local market, they can provide expert guidance on whether offering a home warranty is the right strategy for maximizing your home’s value.
Don’t leave money on the table when selling your home. Call or text the team of real estate professionals at Your Home Sold Guaranteed Realty Exclusive today at (218) 656-6469. Whether you’re selling a cozy cabin, a luxurious lake house, or a family home in town, Dan, Diane, and their team have the expertise to help you make informed decisions and achieve the best possible outcome for your sale. They can help you navigate the complexities of home warranties and other strategies to increase your home’s value and appeal to potential buyers.
To Discuss Your Home Sale or Purchase, Call or Text Today and Start Packing!
Frequently Asked Question About Home Warranties
While a home warranty can provide added protection and appeal, it’s not a substitute for addressing major issues with your home before listing. Buyers will still expect the home to be in good condition, and major problems could still deter buyers or lead to lower offers. A home warranty is best viewed as an added layer of protection and a marketing tool, not a replacement for proper home maintenance and pre-sale repairs. Always consult with a real estate professional to determine the best approach for preparing your specific property for sale.
