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WHY WE PLACE A ONE YEAR HOME WARRANTY ON ALL RESALE HOMES WE SELL.

By Lenn Harley

Real Estate Agent with Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate 303829;0225082372

January 30, 2012 10:30 AM

WHY WE PLACE A ONE YEAR HOME WARRANTY ON ALL RESALE HOMES WE SELL.

Because it protects the home buyer from unexpected repair costs when appliances, plumbing, electrical, heating or cooling systems fail following settlement.

Over the years our home buyers have had repaired or replaced - -

Water Heater (replaced)
Air Conditioner condenser (two year old system
Air Conditioner (10 year old system)
Heat Pump (Replaced)
Heat Pump (Repaired)
Plumbing leak in toilet drain
Swimming Pool Circulating Motor
Oven Door
Refrigerator Ice Maker
Refrigerator Mother Board Control
Well Pump

When the home buyer's newly purchased home is covered by a warranty at settlement, they can sleep at night knowing that in case of an emergency failure in their home, they have an 800# to call for help.

Making sure our home buyers are protected has been our practice since 1994 when I left the mega brokerage and was free to pay for the warranty myself if the seller didn't agree to pay.

This practice was especially helpful during the years 2004 through 2006 when sellers were rarely willing to pay for the warranty.

Another reason every resale home is covered by the warranty??

RISK REDUCTION

Since a large percentage of lawsuits by home buyers following settlement are related to property defects, the Home Warranty is the real estate broker's first line of defense.

If the new owner can get repairs made with little cost to themselves, litigation can be avoided.

This is good risk reduction for the listing agent, the buyer's agent, the seller and, of course, THE HOME BUYER.

Caution to agents. The Home Warranty is not to be used for items discovered in a home inspection. The home warranty company assumes that the property is in good condition AS OF THE DATE OF SETTLEMENT.

In Good Hands

Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988. Serving home buyers in Maryland and Northern Virginia.

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Brenda Mullen

RE/MAX Associates - San Antonio, TX

Your San Antonio TX Real Estate Agent!!

I love your last sentence Lenn. I had a listing agent tell me that stuff that wasn't fixed on the repair request can be covered by the warranty. I was like...noooo, you need to repair it before we continue on. The home needs to be in good repair when the buyer buys it. They don't need to be worried about fixing things after settlement.

Jan 30, 2012 11:25 AM

Surprise Arizona Realtor Jim Braun Sun City Grand Active Adult Communities

Coldwell Banker Residential Brokerage Jim Braun Sun City Grand Az - Surprise, AZ

Surprise AZ real estate Phoenix West Valley

The home warranty is an important part of the transaction as far as I am concerned.

Jan 30, 2012 11:32 AM

Mike Cooper, Broker VA,WV

Cornerstone Business Group Inc - Winchester, VA

Your Neighborhood Real Estate Sales Pro

That's a great idea, Lenn. Ironically, I've been on the other side of the warranty companies. Some (some of the bigger providers) don't pay their bills on time or ever. Therefore, they have a hard time attracting the best contractors. Our electrical company no longer does home warranty repairs for that reason.

Jan 30, 2012 12:07 PM

Charles Stallions

Charles Stallions Real Estate Services - Pensacola, FL

850-476-4494 - Pensacola, Pace or Gulf Breeze, Fl.

Hi Lenn I even put them on our rentals as well. You can save a lot for the 300 to 400 they cost

Jan 30, 2012 01:22 PM

Loreena and Michael Yeo

3:16 team REALTY ~ Locally-owned Prosper TX Real Estate Co. - Prosper, TX

Real Estate Agents

I always tell them it's a small insurance/ assurance policy. But you're right. Most people/ agents dont understand it going in.

Jan 30, 2012 01:26 PM

Susan Neal

RE/MAX Gold, Fair Oaks - Fair Oaks, CA

Fair Oaks CA & Sacramento Area Real Estate Broker

Hi Lenn - I think a one year home warranty is a must. And it protects the seller too - from getting angry calls from the buyers when something breaks down. The home warranty companies are generally good and respond quickly to take care of any problems.

Jan 30, 2012 02:38 PM

Terrie Leighton

Ferrari-Lund Real Estate - Reno, NV

Reno Real Estate Agent ~ Selling Homes in Reno

Lenn ~ I recommend them to all of my buyers. They are entering the unknown, especially if purchasing an REO where the seller never actually lived in the property, the home warranty is a nice insurance policy to help protect their best interest.

Jan 30, 2012 03:39 PM

Gayle Rich-Boxman Fishhawk Lake Real Estate

John L Scott Market Center - Birkenfeld, OR

"Your Local Expert!" 503-739-3843

Lenn~through personal experience as a homeowner before I got into the business, my bestfriend (and my realtor) bought a home warranty for me. When I tried to use it for my garbage disposal it wasn't covered. I am not a big fan of them, frankly. There are many things they don't cover and it has seemed like a waste of money. I'm glad you've found them to be a positive "fix".

Jan 30, 2012 03:40 PM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Anne. Indeed. They are not usually aware of the costs of home ownership.

Peggy. My pleasure. Thanks for stopping by.

Chris. That's exactly what I do.

Lou. That it is.

Brenda. HA! That agent was suggesting a FRAUD on the warranty company.

Jim. I agree.

Mike. I have had that problem with AHS. Never with 2-10.

Charles. GREAT POINT.

Loreena. It seems like a lot of money but it is less than ANY repair.

Susan. It IS good for sellers too, a point often overlooked by listing agents.

Terrie. I don't "recommend" them. I gift my buyers with the warranty.

Gayle. Without the details, I wouldn't know why it didn't work for a garbage disposer.

Jan 30, 2012 09:32 PM

Jay Markanich

Jay Markanich Real Estate Inspections, LLC - Bristow, VA

Home Inspector - servicing all Northern Virginia

These companies call me all the time, or ask me to send them a copy of an inspection report for a particular house. Given the quality of "stuff" these days, I think they have a lot to do!

Jan 30, 2012 11:33 PM

Karen Fiddler, Broker/Owner

Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA

Orange County & Lake Arrowhead, CA (949)510-2395

Always have one on any home we close. I like to sleep at night and this gives me and my clients peace of mind.

Jan 31, 2012 02:31 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Jay. Why are they not getting the inspection report from the home buyer????

Karen. Ditto!!

Jan 31, 2012 04:30 AM

Donna Schmidt

American Home Shield - Fredericksburg, VA

Lenn,

I don't know when you have had your negative experience with AHS, but I assure you, our payout of claims nationally outshines ANY OTHER COMPETITOR. In Virginia alone, claims paid to service homeowners was $12,000,000 and Nationally - $352,000,000.00. As the representative for Central and Northern Virginia, I have EARNED the relationships I have with my customers. They know that customer service is alive and well with me and AHS and that our product protects their clients and their reputation. My customers AND their clients know that they can reach out to me 24/7 personally. American Home Shield has been and always will be, the leader in the home warranty industry.

Thank you and have a great evening.

Feb 08, 2012 12:59 PM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Donna. My EXPERIENCE taught me otherwise. Over the years, when I WAS using AHS, several claims were paid only in small part. The biggest problem was making a claim.

You can quote all the statistics you wish, but my EXPERIENCE cannot be denied.

I found that, when it came to a consumer claim with AHS, it was far more complicated than with the two other companies I've used.

Feb 08, 2012 10:54 PM

Donna Schmidt

American Home Shield - Fredericksburg, VA

Lenn,

I appreciate the response and the honesty. I can only speak about my experience and my territory since I have taken on the position of representative. I would love the opportunity to address some of the issues you had run in to and maybe we can hopefully have you try American Home Shield again. Thank you for your support of home warranties and I wish you continued success in your business.

Feb 09, 2012 12:52 PM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Donna. Hopefully, this thread will encourage warranty companies to avoid a situation whereby a home buyer or their agent has had a bad experience. We often forget the good experiences but never forget the bad ones.

The best publicity is "no publicity". Sadly, once that bad experience or experiences happens, it's too late. You can't undo history.

Over the years I've been selling real estate, supervising agents in my brokerage, or noting experiences with warranties of referral agents, we have place over 400 warranties for home buyers.

We do not sell a resale home without placing that warranty at settlement. So, my information about the different warranty companies is based on personal experience.

The opportunity to address the issues was before our home buyers claims were rejected.

On the other hand, I can cite a number of examples where the 2-10 or the HMS where repairs were made and our home buyers very satisfied. That was not my general experience during the years I placed (and paid for) the AHS warranty.

Feb 09, 2012 10:13 PM

Donna Schmidt

American Home Shield - Fredericksburg, VA

Lenn,

Again, thank you for your input. Unfortuntately, it is hard to put a bad experience behind you when someone has one and not knowing the circumstances of your particular experience, I can't address it. I can only move forward and provide my customers with the best possible experience I can give them. I do appreciate your candor and your thoughts.

I hope you have a wonderful day and keep writing your blogs.....I enjoy them.

Just a note: Make sure the warranty is registered prior to settlement just in case there is an issue at walkthru. I've seen too many cases where the homeowner has an issue on settlement date and the property is not in the system and it delays their service. Thanks!! :)

Feb 10, 2012 12:41 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Donna.

I don't believe that "walk-through defects" are a matter for a home warranty UNLESS the seller had placed it at or during the listing so the SELLER is covered.

The warranty we place is for the buyer and is effective as of the settlement, not the walk-through prior to settlement.

If the defect is there PRIOR TO CLOSING, it's a pre-existing defect and the responsibility of the SELLER.

Making warranty claims after settlement for pre-existing defects would be, IMO, a fraud on the warranty company. The service company sent to make the repairs will know the difference.

This is one reason sellers should put that warranty on at listing. If they do not, we put it on at closing for our buyers to protect them for any post-settlement covered problems.

I've had several experiences whereby we find uncompleted home inspection items not repaired, new failures of systems between the home inspection and the walk-through. When we note the defects on the walk-through document, the listing agent simply says, "Oh, you can just have your warranty make that repair after settlement", knowing full well that it is a pre-existing condition.

My buyers are not going to compromise their warranty by making fraudulent claims.

Feb 10, 2012 03:34 AM

Donna Schmidt

American Home Shield - Fredericksburg, VA

Lenn,

Even though home inspections are done, something actually can go wrong on settlement date. When a homeowner walks into their new home and turns on a stove and it fails, that warranty is in effect the date of settlement. That in NO WAY is a fradulent claim! Those are called undetectable pre-existing conditions. That's why it is important to have it registered....I'm not saying, in effect prior to closing...just registered so in case there is an issue when they walk in the door, the property information is already in the companies system and doesn't cause a service delay.

Feb 10, 2012 06:50 AM

Mark Geslock

Keller Williams - Fredericksburg, VA

American Home Shield covers UNDECTABLE PRE-EXISTING conditions. Maybe there was no power to test the HVAC system. As long as the system appears to be operational, and you have selected the correct coverage, you are covered.

I have had only positive experiences with American Home Shield and Donna Schmidt.

AHS has saved one of my clients over $5,000 in repairs to a foreclosure purchase.

I recommend only AHS to all of my agents and their clients because of the coverage, value, ease of use and the local representatives promptly return calls.

Feb 21, 2012 09:45 AM

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