I, Kathryn Lansden represent Home Warranty of America and we have two 13 month warranty programs for your buyers and free coverage for your sellers. HWA is a nationwide company but my territory encompasses the Southeast Valley of Phoenix, Arizona. I understand the whole point of blogging on ActiveRain is to help build my business. There are lots of home warranty companies to choose from and HWA offers some tremendous benefits for you and your buyers.

What I plan on doing here over the next few weeks is to talk about the industry in general and how it works. I find that most warranty companies operate in a similar fashion. This will help you (the REALTOR®S) educate your clients and set reasonable expectations about what the warranty company will do and what they won't. Once you understand what makes the warranty companies tick, you can better advise your clients on what to look for before the closing and afterwards.

So, here is the first piece of advice I have for you.
And it's an important one.

Rule #1: Regardless of whether your home warranty company claims to cover unknown pre-existing conditions or not, all systems and appliances have to be in place and FULLY OPERATIONAL on the day the policy goes into effect and the first time its used. Here is a typical scenario:

Your buyers close on a house. It may or may not have been a foreclosure or REO property. Hopefully you had a home inspection and a walk through (with all the utilities on, but that is for another article). Your buyers move in, they turn on [fill in the blank] appliance and it doesn't work. What is their recourse? You advise them to call the warranty company to place a claim. The claim specialist on the other end of the phone asks them a series of questions. Read what follows next carefully. The key question is, "when did you first notice the problem?" If your clients say that [whatever] wasn't working when they moved in, their claim will more than likely be denied.

Here is where buyers and their agents get confused and irritated. The company claims they cover unknown pre-existing conditions so in your mind it shouldn't matter when your buyers first noticed the problem, right!?? Wrong!! Remember Rule #1? Most warranty companies want to know that everything was working on the day that the policy started, OR, the first time your clients used it (this is Rule #1a)

Rule #1A in action looks like this. Say you close escrow in December and can't turn the air conditioning on to test it because of the temperature differentials. Fast forward to the first hot day in April. Said air conditioning unit needs to work the first time your buyers turn it on. If your clients tell the warranty company otherwise, there is a chance that the claim is going to be denied.

So, here you have it straight from an insider. Hopefully this information will help you counsel your clients on what to expect when they have to call in for service. Clients that are happy with their warranty company are generally happy with their agent. This means more repeat and referral business for you (and for me).

If you happen to be an agent in the southeast Valley, I'd love an opportunity to work with you and your buyers. If you are elsewhere in the country you can call our corporate office at 888-492-7359 for more information.

Celebrate Earth Week all year-round with our GreenPlus Home Warranty Option. You can purchase it with any HWA home warranty, and it replaces covered systems and appliances with ENERGY STAR qualified products! Go to Costs and Coverage in our Web site and see all the details!

Stay tuned for more tips from the home warranty insider.