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Home Warranties May Entice Buyers

A recent study conducted by a national real estate company and ""American Home Shield"":http://www.americanhomeshield.com, a home warranty company based in Memphis, Tennessee, found that homes offered with warranty protection sold an average of 23 days faster than homes with no warranty coverage. In addition, the study concluded, those same homes earned four percent more at closing than homes without coverage.
According to Mike Vazeii, director of real estate marketing for American Home Shield, in a year where first-time homebuyers are expected to account for more than 50 percent of sales, home warranties could have an even bigger impact. ""Given the anxieties of first-time buyers, a home warranty could likely make a difference when they are comparing properties,"" Vazeii said. ""First-time buyers will be an important demographic this year, and the competition for their business will be fierce. Listings that come with a home warranty policy will likely have a distinct advantage with this group.""
A variety of market factors are enticing first-time buyers. Interest rates are still historically low, and the federal government has granted a tax credit of up to $8,000 for the purchase of a first home. American Home Shield says with these incentives factored in, the average cost of an existing home in 2009 is about $20,000 less than a home listed during the same period in 2008.
Vazeii added, ""Couple all this with the fact that first-timers are unencumbered with selling an existing home and you have an excellent climate for new buyers.""
Typically, first-time buyers are more anxious than experienced homebuyers because buying a home is likely the largest single purchase they have ever made. A variety of factors weigh on their minds: mortgage payments, a long-term commitment, the depletion of their savings, and the added responsibility of owning a home and the expenses that come with it. They realize that unexpected major expenses may put them at risk of defaulting on their loan.
But according to Vazeii, ""Home warranties can do wonders for calming jittery first-time buyers who fear the unexpected.""
""American Home Shield"":http://www.americanhomeshield.com says it founded the home warranty industry in 1971, and now serves 1.3 million customers across 49 states. The company explained that the results of the home warranty study it conducted in conjunction with the national real estate agency were verified by ""Cannon & Company"":http://www.cannoncpa.com/, a third party accounting firm.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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