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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

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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.

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