American Home Shield Home Warranty – Benefits For Buyers

2014-01-12 12.04.05by Paige Tepping

When it comes to buying, selling, or simply enjoying your own home, few things can be as frustrating or as costly as dealing with the unexpected breakdown of a major system or appliance. Experienced real estate professionals know they can expect a call right away when this happens to a client, and they had better be ready to respond.
It’s understandable. If a home is on the market, the client is anxious to take care of repairs right away so there’s no distraction to potential buyers. And if the breakdown happens to a new homeowner, there can be other issues.
Along with the inconvenience and expense of the repairs, the situation can raise fear and doubt in the client’s mind. What else will break down? Did their agent ask all the right questions about the quality of the home?

American Home Shield, the largest home warranty company in the nation, gets approximately 3 million service requests each year, and works with a network of more than 10,000 contractors and 45,000 technicians to repair or replace covered items. In this exclusive interview, Mark Barry, president of American Home Shield, explains why home warranties are more relevant than ever to homeowners, the role of home warranties in today’s changing real estate market, the keys to growing the industry, and how the company is transforming its operations and expanding its investment in the real estate market.

Paige Tepping: What makes home warranties so attractive to today’s homeowners?

Mark Barry: New homeowners want to be confident that they made a smart purchase and to know that they’re prepared for the unexpected. They’re busier than ever, and they have little time to deal with breakdowns to things like heating and air conditioning systems, major appliances, and the like. They want to avoid the inconvenience of searching for a qualified service contractor to make repairs, and they want to know that their budget is protected. A
home warranty can help answer these needs with affordable, reliable coverage.

PT: How have the ups and downs of the real estate market affected the home warranty industry?

MB: The percentage of home sales that include home warranties has remained fairly consistent, which is great, considering the volatility that the housing market has experienced in recent years. And, with homeowners staying in 2014-02-02 17.47.11their homes longer, direct-to-consumer sales have performed very well, too.

That said, I think the time is right for the home warranty industry to experience dramatic growth across all segments, but especially in the real estate market. We need to do a better job of informing real estate professionals about the value of home warranties, ensuring that they truly understand the benefit to their clients and how home warranties can be used as a tool to help build their business. As an industry, we need to work more closely with the real estate community to set clear expectations about service and coverage, focus on ways to create greater demand among consumers, and deliver experiences that will drive even longer-term relationships.

PT: With all of the changes in the real estate industry, how is American Home Shield responding?

MB: Our company has deep roots in the real estate community, and we are investing our full weight and energy into this segment of our business. 2013 was a very good year for us, and we’re positioning ourselves to grow even more in 2014. For instance, we significantly expanded our real estate sales team late last year, increasing our team of account
executives by nearly 30 percent, which will allow us to better serve our existing clients and bolster our presence in key markets. We’re also spending a lot of time in the field, talking with the real estate community about what they want in a home warranty product, what they do (and don’t) like about what’s currently on the market, and understanding what real estate clients need from us to grow their business.

In a low inventory market like we have now, savvy agents are using home warranties as a tool to ensure that their buyer’s contract is the one that’s accepted, especially when there are multiple offers on the table. The buyer agrees to pay for the home warranty, which is added as listing coverage that transfers to them—which protects the seller from the time the contract is signed through closing.

PT: When it comes to service, what is American Home Shield doing to ensure its
customers receive the best possible experience?

MB: The customer experience is our top priority at American Home Shield, and we’re reworking processes across all parts of our operations to ensure they are in line with this commitment. For instance, in our innovation lab, we’re drilling down into the root causes of issues, validating opportunities and testing various approaches before rolling them out to the business. We’ve cross-trained our associates to handle more types of calls, made significant changes in scheduling to ensure we’re available when our customers need us most, and we’re taking a much more strategic approach to how we manage call volume, especially during peak times. We’re already seeing some dramatic improvements in year over- year performance, our customer satisfaction scores are on the rise, and so are first
year sales and renewal rates.

PT: What do you say to agents who don’t think their clients need a home warranty, or don’t trust home warranty companies?

MB: Granted, some people prefer to self-insure and are entirely comfortable taking risks. However, agents want to represent their clients to the best of their ability. Knowing the high chance that a client will experience a mechanical failure in the coming year, it seems only reasonable to make them aware that a solution exists. Unfortunately, there have been situations in our industry over the years where home warranty companies have gone out of business and left customers hanging, or have provided poor coverage or service. As in any business, the experience and service can vary by company and product, and we encourage people to do their homework when choosing a
provider.

At the same time, American Home Shield has been in business for nearly 43 years, and we know from experience that homeowners, both new and existing, will regularly experience mechanical failures. These can range in severity from a $100 repair to a $5,000 or more replacement—and either way, it’s an inconvenience to their clients’ lifestyle and budget.

PT: What do you say to those who give home warranties a bad rap when it comes to service quality or claims coverage?

MB: It’s frustrating, because as a whole, home warranty providers do a good job of taking care of their customers—2013-02-04 22.36.37rand when something goes wrong, we work hard to make things right. I don’t want to oversimplify things, but I think misinformation plays a large part in this, especially when you consider that our customers place an average of two service requests a year, and those who use their warranty are more likely to renew than those who don’t.

Over the past five years, American Home Shield has paid over $1.6 billion in servicing our customers’ repair needs, and our percentage of claims denied is in the single digits. Unfortunately, too often, customers and even real estate professionals simply aren’t aware of exactly what their specific plan covers—which can lead to missed expectations.
That said, expectations are very important, especially in a service industry. At American Home Shield, the overwhelming majority of claims are handled seamlessly—but to the customer or agent who has had a disappointing experience, that point is irrelevant. In these cases, we do our best to resolve the issue and repair the relationship, as well as identify ways to improve going forward.

Click here for more information on American Home Shield warranties.

Some of our customers have chosen to purchase American Home Shield warranties when they buy a new home.  They are very pleased with the service and repairs they have received from American Home Shield maintenance people.  Maybe you should consider a home warranty on your next purchase.  Call me for details!

Remember it is always toasty in Naples and you deserve your piece of Naples sunshine and worry free home maintenance.

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