Frank - I always pass it onto the client.  My home warranty company allows me discount the warranty by the amount of the "marketing fee" ($70 in this case).  So, the seller (or buyer) only pays $329 instead of $399 to get the best coverage.  And, I explain to the clients that the money essentially comes from me, they love it. 

We've always taken then and donated them in our charity donations. I didn't know that the customer could just pay less for the product though... I'd definitely prefer that.  It doesn't seem fair that they pay more for the warranty just so it can be kicked back to me.  I will check into that with the ones I use most!!

Frank that's a good question. I signed up with HBW VI about 12 years ago. If I remember correctly I had to pay a fee to the state to become an "agent" for them. Back then I used to keep the $60 they paid however I did disclose it to the seller. I haven't kept the fee for many years though. Now I just reduce the policy amount by $60. I feel it's petty. I do believe it is perfectly legal though as long as it is disclosed.

I am a Realtor who has a personal ABA relationship but I agree that the warranty "marketing" fee's is a bit much.  I always order it at a discount for my client.  I too sell it is a gift/discount from me to them.

Frank - I'm with you on this one. I just reduce the cost of the home warranty to the buyer or seller.

Man, you had to go and expose that.  I was making a nice little side income peddling home warranties.  

Frank,

I like the way you think and I applaud your high ethical standards!!! Keep spreading the word!!! Thanks,   Fran

Frank, I did not know you could do that, but I will from now on. Actually, I have had it with home warranties, IMO they are not worth the paper they are written on. I won't bore you with the gory details but I may post on it.

Missy,

If you do post on it, please put a link back here. I also do not believe in them, but it was one of my agents that bought it.        

No reason to keep a small additional "bonus" from what a client is paying...Don't know if I'd feel right declaring it as a gift by writing the policy at a cheaper rate, either.

We are reducing the fee, funny, if it looks like a kickback, if it smells like a kick back if it tastes like a kickback, yet it is a "Processing Fee".

HMMMMMM

Frank, I had no idea you could just pay less for the warranty. That's why I read AR.

As I always buy the Home Warranty as a sing that I have confidence in the home and the transaction. so I always "under" pay I don't need the hassle of the check and I have always laughed at the idea of having a buyer or sell pay me for the processing fee of another company's business.

I have had transactions that almost screamed to a halt because the other agent want to be in change of ordering the home warranty.. simply so their name was on "purchasing / processing" agent line.

Agents are salespeople and deserve to earn commission for their services.  To sell a home warranty you must receive training outside cont.ed. requirements, present the benefits, take the application, enroll the client, and educate the client on claim process.  This takes time and expertise and we pay the agent for that service.  Warranty companies align themselves with agents because they are at the center of the transaction and offer other services to their clients.

HMS in the Midwest is developing a Personal Pricing Program where the agent can add some additional coverage.   It allows the agent to tailor the warranty to the client's needs.  Passing the $60 savings or donating it has always been an option.

And for those who don't believe in home warranties, HMS has paid $1,250,000 in claims in the Midwest last year.  Add in the entire USA and the numbers in paid claims are mind boggling.

I would pass it on to the client!

Steve Sanders,

Thanks for participating in this discussion.  It is good to know your region has paid out $1,250,000 in claims.  It is hard to get a context for that number, however.  How many warranties did you sell in your region? Also, what percentage of warranties sold actually collect on them?  I'm not an agent who sells a lot of warranties because it seems like my clients rarely collect money on them.  I realize that my clients are an extremely small sample size compared to your region, so please correct me if I'm wrong.  I'd love to take solid statistical information on warranties to my clients and let them make an informed decision on whether or not to purchase one.

Interesting ... At my Broker we are actually paid $30 for each Home Warranty, which I suppose means the Broker is keeping $30.  I had no idea that the cost of the warranty could be reduced for this reason.

"To sell a home warranty you must receive training outside cont.ed. requirements, present the benefits, take the application, enroll the client, and educate the client on claim process."

In reality- you need to be able to fill out an address or two, check a box or two, right? Can't tell you how many home warranty forms I've filled out- Never once did I need special training to do so....

Eric... I just dealt with that! I have a property listed and sellers agreed to buy a home warranty. We advertised it widely. An offer came in from another agent and on page 1 she hand wrote "AHS warranty to be included and purchased by Agent x at....". I called and explained sellers already had ordered the warranty. The buyer's agent had a fit! She stated the offer was contingent on HER ordering the contract, not my firm. Then I realized what she was arguing for! Not for the warranty or to have her buyers covered, but to get the CREDIT (kickback). Seller didn't accept deal anyway. 

Hello Steve,

What in the world are you talking about? Training? At least here in Virginia you get a $60 kickback if you have a pulse and can fill in your name on the warranty card. No training, no nothing.

Erica,

That is amazing! The lengths that an agent will go for the $60 is amazing.

Derek,

Yep, the fee technically goes to the broker. Some brokers don't give any of it to the agent (claiming RESPA) and others will take half.

David,

That is the heart of this question. HMS calls it a "processing fee." So let me get this straight... "to process the $60 check that we are going to give you, we have to give you $60 to cover that check" or you can just deduct $60. I know we aren't talking about a lot of money here, but it is the intent that matters. 

Frank - I had no idea that the home warranty companies did that! 

My dear dear friends..........

Have the strange ways of the Home Warranty Industry got you in a bind ? 

Really, though kickbacks are a real serious issue, the problem goes much deeper. 

You claim to be concerned for integrity ? Yet you are (unknowingly I am sure) aligned with crooks !  

Almost the whole home warranty industry is based upon unsound buisness practices, such that fraud and bribery are necessary for 'success'.

Here's something to think about. Read:  Secrets the Home Warranty Industry Doesn't Want You to Know 

There is only one home warranty that is always worth the paper its written on, we don't offer kick-backs and require no paperwork from the agents involved.

Advantage Home Warranty is the only:

• home warranty underwritten by a home inspection ( can anyone say: documentation ?)
• 'No Denied Claims' home warranty on the market
• home warranty without the nefarious 'pre-existing conditions' clause

You owe it to yourselves and your clients to find better alternatives, a warranty you can actually believe in.

Do your homework and read my blogs here on Active Rain

And then let's talk......

Philip LaMachio, NC. Inspector with Advantage Inspection :  Proud Member of NACHI

Our local Website: Advantage Inspection Clear View 

We are also a proud Lowes Home Improvement Preferred Vendor Provider )

Also, our corporate website: Advantage Home Warranty