Seller Home Warranty (SHW): Enrollment Definition & Requirements

Seller Home Warranty (SHW): Enrollment Definition & Requirements

A Seller Home Warranty (SHW) is offered to the seller by their Real Estate Agent (Listing Agent) to give the seller coverage during the listing period, as well as to provide a prospective buyer incentive. With the seller's consent, the Listing Agent enrolls the SHW. Upon enrollment, the Cinch Real Estate representative emails the agent a SHW Confirmation Invoice. Coverage is effective upon receipt and processing of the Seller Home Warranty application (completion of enrollment). The initial enrollment will be for 6 months (180 days) and extensions match the Seller Listing Agreement up to 1 year. 

The seller is provided coverage based on a legally binding agreement that funding to pay for the warranty will be guaranteed at the time of closing (when the SHW converts to the buyer of the home). Payment for the BCW needs to be received by us, ideally within 7 business days of closing (up to 30 business days).

Buyer Notification

If the property with an active SHW goes under contract, Cinch Real Estate Membership Services should be notified by the Listing Agent of the estimated closing date and buyer's name (additionally the buyer email and phone if possible). This information is phoned in, emailed, or faxed to us for processing.

The warranty is paid for when the home closes and the SHW converts to BCW to the buyer (the seller does not pay anything during the listing period). There may be other applicable fees for the seller at closing such as:
  1. SHW Florida: At least 15% of the buyer base cost (we show $70 on the FL brochure).
  2. SHW California: A per diem is charged based on the cost of the base warranty divided by 365. The price of a warranty today in California is $449, therefore the per diem is $1.23. If the SHW is in effect for 90 days before it converts, the seller fee equals 90 x $1.23=$110.70.
  3. Seller Heat and Air option cost.
The newly created BCW will have the same contract number as the SHW did.

Welcome Kit, Declaration Page and Terms & Conditions

  1. Once a SHW is enrolled, a Seller Welcome Kit is mailed (within 7-10 business days). The kit highlights the benefits of the warranty and includes the declaration/agreement coverage summary page and the terms & conditions of coverage.
  2. When the warranty converts to the buyer, a Buyer Welcome Kit is mailed (within 7-10 business days). This covers the same items described in the Seller Kite but will also include information about any buyer only options that may have been purchased.

SHW Cancellation

A Seller Home Warranty can be cancelled for the following:
  1. Seller terminated listing with agent.
  2. Seller takes the property off the market.

Either the Listing Agent or the Seller can request to cancel a SHW. Cinch Real Estate verifies if any claims were paid during the listing period prior to cancellation.
  1. If no claims were placed, the request to cancel is processed.
  2. If claims were placed, the Cinch Real Estate representative should refer the Agent/Seller to their AE, who in turn will advise them that the seller is responsible to pay Cinch Real Estate for either the cost of the warranty or the amount of the claims paid, whichever is less.

SHW Important Reminders

Realtor wants to enroll a SHW that is NOT listed in the MLS

  1. Seller Home Warranty coverage is only available to homes listed in the MLS.

Listing Agent wants to add SHW but Buyer's Agent already enrolled property

  1. If the Buyer's Agent has already enrolled the property for their buyer and then the Listing Agent calls in and wants to add a SHW - Cinch Real Estate CSA may not cancel the existing BDW in this scenario. Respectfully advise the Listing Agent that the Buyer's Agent has already enrolled property and refer them to their Cinch Real Estate Account Executive if necessary.

Less than 30 days to closing

  1. We do not enroll a SHW if the closing is 30 days or less away. Therefore, when enrolling a SHW, always check when the closing date is. Refer the agent to their AE if the agent has further questions about this.

Buyer's Agent wants to add Seller coverage

  1. We don't allow this.

Listing Agent wants to remove Seller Heat & Air Option on or around closing

  1. We don't allow this. If the SAH option was selected then we provide HVAC coverage to the Seller and we would honor any HVAC claims during the listing period - it is not acceptable to just cancel it.
  2. If they insist, refer the realtor to their AE.

Buyer's Agent wants to switch the warranty coverage

For example, a Keller Williams Realtor enrolls a SHW for their Seller - the coverage is the Cinch Real Estate generic warranty coverage for that state. The Buyer's Agent is with Long & Foster and the L&F Agent calls Cinch Real Estate to ask if we can switch the warranty coverage to the L&F private label plan (which has different coverage features).
  1. The answer is no. There are other repercussions in making such a change that impact the correct servicing of the warranty (particularly the Homeowner's Insurance Deductible Reimbursement) and we do not do this.

Seller's Agent wants to switch the warranty coverage

  1. If the Seller's Agent states that the listing is canceled and the seller wants to keep the warranty, the associate should convert the SHW into a BCW, collect payment, and list the seller's name as the account holder. 

SHW Property Eligibility

Eligible:

  1. Single Family Residences: Includes condominiums and townhouses.
  2. Multiple Units: Only the owner-occupied unit of a duplex, triplex, or fourplex will be covered during the Seller coverage period. Triplex and fourplex coverage is not available in all states.
  3. Owner-Occupied Property: A SHW is available on any residence that is owner-occupied at the time of listing (if rented or leased, the property may have a BDW, just not a SHW).
  4. Mobile Homes: Covered if built within 10 years of the request for coverage date (the home must be permanently secured to the ground and the land must be owned by the homeowner).

Not Eligible:

  1. Newly Constructed Homes: Do not qualify for Seller Home Warranty Plan coverage.
  2. For Sale by Owner (FSBO): Properties listed by their owner are NOT eligible for SHW coverage. SHW's are only available on properties listed with a licensed Real Estate Agent.
  3. Property for Rent: A single family home that is tenant occupied does not qualify for Seller Home Warranty Plan coverage.
  4. Vacant Property: We will only issue a SHW on vacant property if it is maintained in "show" condition with utilities (water, electric, gas) left on. A property with utilities turned off is not eligible for an SHW.