HMS Home Warranty "processing fee" = Kickbacks.

Well all of this is very interesting and after about 23 years in business I'll share my experience and pose a new question.  Some of my clients say "Thank goodness, I had the warranty.  I could never have afforded the work they did for $100" and others say, "It wasn't worth the paper it was written on!"  Which of us is willing to tell the client with the major problem, "Oh, the warranty wasn't worth the money!" As a buyer's agent I always write in the Warranty and if the seller won't pay it, I do.  The odds are probably 50/50 and I would prefer to be on the winning side of that deal.  Now, while you all are feeling so righteous about not taking the $60 award, how many of you charge the "broker transaction fee" to your clients.  I don't now and never have charged that fee-believing that whatever commission I receive is probably adequate so I pay out of my pocket.  Would you rather save your client $60 or the price of the transaction fee which ranges from $150 to $399 and goes up every year? The transaction fees are a far greater "rip-off" than any home warranty. 

At Lakeforest Title we started providing an HMS $399 home warranty to the buyer when they close with us as our way of saying thank you.  We started this a couple of years ago.  We did not raise our fees when we started this since it is pretty much our only "Marketing Expense".  We haven't raised our fees in 22 years except for adding a $45.00 scanning fee which actually goes to an outside contractor (eaglescan).

Every month we get postcards in the mail from HMS stating what repairs they provided for which client policies.  There are always a few.  The five I recieved in January were dated December 2008 and included repairs to a Clothes Washer, Range, Furnace (Natural Gas), Refrigerator, and Water Line.  These repairs were carried out in houses in Maryland and Virginia.  That was 1 months worth of post cards from HMS. 

Interestingly enough, we rarely hear from the clients about the repairs that were done.  I have had some complaints from clients and some complements.  We did have one client bake us (Lakeforest Title) a cake to say thank you after HMS replaced her water heater.  You are not going to please all the people all the time but HMS does a good job standing behind their warranty.

Hi Frank,

Actually, I did not miss the point of the discussion.  I was simply addressing the comment from Missy Caulk and your response to it.  Perhaps you should re-read your blog to refresh your memory.  And no, we don't actually pay any more for our warranties then anyone else, so you haven't "saved us any money".  The phrase "HMS $399 Home Warranty" is one that everyone in our industry immediately understands.  Even you . 

I don't think I owe you anything more than a chuckle at your patronizing attitude.  And perhaps a referral to a good neurologist for any memory issues you may be facing.

Frank,

Maybe you ought to go back an get educated on warranties. You can't go and just pay a lesser amount for a warranty when you want to. We don't receive these "fees", but we still pay the same price. I really think you need to know each any every warranty to make statements and accusations as you do.

Frank, can you keep your comments professional?

I was civil until Tina said I needed to get educated on the matter. Who says that? Especially when you are dead wrong. Also being "anonymous" like that makes me less respectful of somebody that can't put their full and real name.

Did anybody see the new statement put out by HUD, reaffirming that these fees are illegal?

Frank

Agents can choose many different payment structures in terms of them either receiving
commission from us, marking up their “buy rates”, sending a customer directly to us at their
“buy rates”, and purchasing for the clients themselves. The agent needs to tell ChoicePlans
how they are going to sell so we can set them up accordingly.
The AGENT can sell a plan at or above their Buy Rate and receive the difference if they
want. The AGENT can simply send leads to us by phone/email/etc. and the agent will tell
US WHAT THEY WANT US TO CHARGE THEIR CLIENTS. Sell at Buy Rates or do we sell
their clients at Sell Rates. When a policy comes for the agent’s customer, then we will know
who to pay, how to pay, and if to pay a commission.
IMPORTANT / Agent must provide the information for the customer:
Name, Phone, Phone2, Email, etc. for each policy.
Agent_ _______________________________
Date ________________________________
Phone_ _______________________________
E-mail_ _______________________________
Note: Please Email back to Admin@MyHomeChoicePlans.com or fax to (646) 514-2674
Total Home (AC, Heat) $325 $399.95 $75
Total Home $295 $369.95 $75
Kitchen/Laundry (AC, Heat) $285 $359.95 $75
Kitchen/Laundry $255 $329.95 $75
Home Essential (AC, Heat) $240 $314.95 $75
Home Essential $200 $275.00 $75

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Yes, it is a KICKBACK. Completely undisclosed to the buyer. It's really cut and dry. No BS. This is, and will after I get done with them, be illegal. I am an agent with REMAX in Minnesota, I have been in the business for 17 years, It's a kickback plain and simple.