September 27, 2010


Homes Service Contract Industry Reaffirms Your Need for a Real Estate Agent

(Lenexa, KS) Whether we are in a buyers market like the years following 2007, or in a sellers market as hit high gear  in 2016, real estate agents remain invaluable.

A side effect of this seesaw of  economic change is that today’s home buyers are more savvy and looking for added value with their purchase. However, they may not always know where that value can be found. That is why working with a knowledgeable and resourceful real estate agent is more important than ever before.

One way agents are protecting their clients and themselves is by educating homebuyers and sellers on the benefits of products such as home service contracts.

Home service contracts provide service, repair and even replacement of major home systems and appliances. At an average cost of $350 – $550 a year, these contracts typically cover items such as heating systems, interior plumbing, electrical systems, water heaters, dishwashers, and garbage disposals.

Home sellers, buyers, and real estate professionals benefit from the service provided by home service contracts. By including a home service contract as a condition of the sale, sellers instill an added sense of confidence to prospective home buyers because the buyer feels comfortable, knowing that covered systems and appliances will be repaired in the event of failure after closing. In addition, most home service contract companies offer seller’s coverage, which protects the seller in the event of a system or appliance failure during the listing and escrow period. Not only is the seller protected from additional cash outflow, if the home is under contract when a system or appliance fails, the service contract can help to keep the transaction flowing along smoothly.

Benefits to the buyer include budget protection from unexpected repair or replacement of home systems or appliances. This is especially important for properties that have sat on the market for long periods of time because, although a covered item may work at the close of escrow, one never knows when that system may fail. Even a change in household size can push a system or appliance to the breaking point sooner than expected. With many home buyers opting to take advantage of bargains that can be found with the glut of foreclosures currently on the market, home service contracts help take the risk out of the unknown. For first-time buyers with tight budgets, the unexpected replacement of a major system such as a furnace can be devastating; clearly the peace of mind a home service contract provides is valuable to financially strapped homebuyers.

A home service contract can bring peace of mind and referrals to the real estate agent. Real estate agents want to provide the best possible service experience to their clients because so much of their business growth is based on referrals. By offering a home service contract to their clients, the agent demonstrates their professionalism and concern for their client’s well being even after the sale. When the plan holder obtains the service they need from their home service contract provider, they will thank their agent for having the foresight to offer this valuable protection. Of course, when a client is satisfied with the agent’s service, they are much more likely to refer that agent to their friends and family who need real estate services.

Your own real estate agent is also knowledgeable about local markets, pricing, how to market your home effectively, and the many nuances of issues most are not such as PMI,  title insurance, fence line agreements and home inspections. “Personally, I think most anyone is just a sandwich short of a full picnic to avoid using a real estate agent when buying or selling a home,” says Art Chartrand, Executive Director and Counsel to the NHSCA. “A qualified and educated real estate agent doesn’t just show a house and point out shiny appliances.  They know insulation, roofing, taxes, school districts and crime, not to mention the value of granite, a good mortgage company and requirements of VA loans. Buying or selling a home without your own agent is pretty much like trying to fly a plane without taking a lesson.”

The NHSCA works diligently to promote excellence in the home service contract industry. By promoting education, fostering the improvement of business conditions, providing clear statutory definition and standards, and encouraging sound and ethical business practices; higher business standards, better business methods and cooperation within the industry continue to grow.

In our ongoing efforts to foster the relations and understanding between the home service contract industry and REALTORS®, we would like to hear from you. If you have a suggestion, area of concern or just would like more information regarding home service contracts, please contact us.

The National Home Service Contract Association (NHSCA) is a non-profit 501(c) (6) industry trade organization of member companies serving home service contract providers and consumer interests throughout the United States. For more great industry, media and consumer information, visit or call 913-871-5600.