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Gimmick or Real ~~ Home Warranties

Happy House In all of the 25 years that I've been listing and selling real estate right here in Portsmouth New Hampshire, I've never had a closing where a home warranty on an existing home was involved, until this past week. This was the first one, so I basically knew nothing about them. It was briefly mentioned at some point during the sale, but frankly I'd forgotten all about it as had my buyers, Mr. and Mrs. First-Time Buyer, until it was brought up again at the closing.

We were told that for anything that goes wrong with the house systems for one year from the closing date, anything at all, just call up the warranty company and they'd take care of it. The deductible is a $75.00 payment, and then the warranty company takes care of the rest, no matter the cost involved. It all sounded great, like a great peace-of-mind benefit to have for this first year. Cool beans, great deal!

The closing took place on a Thursday, and I get a call from Mr. Buyer on the following Tuesday that they have had hardly any hot water at all, and the bathroom on the first floor is leaking into the basement. What should they do? Mr. Buyer said he'd talked to his parents and a friend, all of whom said just to call a plumber direct and get it taken care of and not to mess with the warranty company. I reminded him that the deductible for calling the warranty company was only $75.00, and whatever else was needed to get these 2 things fixed should be, according to what we'd been told at the closing, covered with no additional cost to them.

So, he called the warranty company and told them about these 2 things that had happened since they had Red Flag moved in. The warranty company told him that it would have to be treated as TWO separate instances, with TWO $75.00 deductibles they would owe, AND they'd have to determine if either of these were "pre-existing conditions" prior to them taking ownership. Excuse me? Yep, that's what he was told. Red flags popping up...

Mr. Buyer called and relayed this info to me, and said he was going to just call a plumber direct for the leak. He did agree to call the warranty company back on the hot water heater because no matter what was needed, that was going to be more than a $75.00 fix, so the deductible, we thought, would be worth paying to have them take care of it. Turns out that the leak was, indeed, fixed for only $53.00, cheaper than the $75.00 the warranty company wanted to just come out and look at it, before determining if this was a "pre-existing condition" or not. So, leak fixed, on to the hot water heater......

The warranty company made arrangements for a plumber/HVAC guy to come out and take a look at the hot Red Flag water heater to determine what the problem was with them having almost no hot water at all. The plumber decides that this had to be a "pre-existing condition" because "hot water heaters don't just stop producing hot water all at once". He insisted that the previous owners had to have known about this. The previous owners were a family of 4, FOUR, and there is no way that they'd tolerate NO HOT WATER with 2 adults and 2 kids in that house. BIG red flags on this one!

So, of course, he wrote his paperwork as a "pre-existing condition", and the warranty company had indicated repeatedly that they usually do not cover things that existed before. And on top of that, not only did Mr. and Mrs. Buyer have to pay the $75.00 deductible, the plumber told them they had to pay for his trip to their house, HIS MILEAGE needed to be paid. I could not believe that when I heard that one! I have NEVER had a contractor charge me for their mileage to come look at a problem in my house. They had to write him a check right then for $150.00 - $75.00 deductible and $75.00 for his MILEAGE. BIGGER red flags rearing up now......

I had been keeping the listing agent, whose company promotes these warranties on all their listings, apprised of what had been going on. She kept telling me that the "pre-existing conditions" phrase was just something they have to use to cover themselves, and that she'd not known of any circumstances where the problems were not taken care of by the warranty company. I was pretty skeptical because of what had already gone on. I also left her a message about them being charged MILEAGE for the plumber to come LOOK at what might be wrong. THAT was never mentioned in any of the discussions about the benefits of the warranty.

Mr. and Mrs. Buyer are still waiting to hear back from the home warranty company, and here it is Tuesday, a WEEK after all this started. Wanna bet how the warranty company responds to Mr. and Mrs. Buyer on whether this will be covered or not?????

Yes, we did have a home inspection done, and yes the hot water was checked, as were all the other normal inspection items and systems. And guess what, all was working fine! Clearly, from the inspections, this was NOT a "pre-existing condition".

As I mentioned in the beginning, I have no experience with these types of home warranties, other than this one. As you might imagine, my feelings about them aren't too great because of what these buyers have been dealing with. Question Mark

     What is your experience with home warranties?
     Are they worth the paper they're written on and the money someone paid for them?
     Is this a 'typical' experience or not?

RE/MAX New Hampshire


Ann Cummings, New Hampshire & Maine Broker
RE/MAX Coast to Coast
Portsmouth NH
  ann@anncummings.com
888-349-5678 x 3839
Servicing the Coastal Areas of NH & Southern Maine

Posted by Portsmouth NH Homes Condos - Ann Cummings New Hampshire REALTOR® on 02/27/2007 05:31 PM

Comments (67)

portsmouth nh homes, home warranty, anncummingscom, portsmouth new hampshire homes, ann cummings

67 Comments on Gimmick or Real ~~ Home Warranties

FEB

2007

This is really on my mind today! We used to use a warranty company that was less than stellar; my own home warranty (I bought my current home a few years ago) came into play with a furnace and it was not a pleasant experience.

Anyway, as of last year we are using a different company and they seem really good, lower deductible.

How do I use them with Sellers? I talk with them and we discuss the age of their mechanicals, etc. There are times when we decide to sign up for one at the time of listing. Other times we hold off and keep it in mind as negotiations are undereway.

As for pre existing conditions? Paying for mileage, yep our old company filtered travel charges in to get that deductible amount used up lol. Just had an inspection last week, water dispenser on front of frig is not working. We know that, it was in disclosures; that would not be covered by the home warranty.

Hi Carole - thanks for reading!

In this situation, I'm really feeling like this is just a gimmick and I feel bad for my buyers. I really think getting them to pay for mileage in addtion to the deductible is really slimy. That was not part of what we were told about when this great selling feature was explained at the closing. If they're going to charge for that, disclose up front that there's mileage involved, instead of after the looking at the problem has been done.

I'm sure there probably are some good warranties out there, but this one just isn't feeling that way to me, at least not so far.

Thanks for your comments! And I'm glad to see you!
Ann

Im sorry this happened. I do not have much experience with Warrantys either, so I am at a loss for words... Good luck!

Most of my clients have had good experiences with the home warranty company that I normally use. Just a side note a couple that purchased a home that I had listed bought their warranty from the buyers agent. The company was one that I do not use. They pulled their cars into the garage for the night and the garage door spring broke. Their cars were trapped in the garage and the company told them it was a preexisting condition!

Ann,

I've used warranties on many of my listings since 1985. The company I used was very good. They replaced hot water heaters, sump pumps, refrigerators, stoves, garbage disposals and even a furnace.

However, at no time was there a mileage charge!

You need to carefully read the contract that the buyers received. And, they should probably report this to the Better Business Bureau and their attorney general as it may be fraud.

We have to offer them here in VA and have the client sign off on it either way. No one I've represented has ever purchased one. My husband and I never bought one on any of our investment properties.

We have used them in the past on our own purchases with positive results. One covered a new water heater, another covered a new furnace. It sounds like it is totally dependent on what company is used.

I believe Home Warranty companies can be both Good and bad. Some companies are better than others. Here in the St Louis area, we have to offer all our buyers a Home Warranty. As I am a buyer's agent, I ask the seller to provide one on every contract I write. if the seller refuses to pay for a warranty, the buyer then has the option of paying it himself, or waiving it. If they waive the warranty, the must sign a waiver saying they waived it. This protects us as agents and is actually required by our Company, Keller Williams in order to cover us on E&O insurance. I can give you a recent exapmle of a claim that was made by my buyer. His furnace went out and he called the home warranty co. They came out and said he needed a new furnace. They would cover the cost of the furnace and most labor, but there were a few items they would not cover, such as redoing the duct work to match up with the new unit. His out of pocket expense was $525. He was not too happy about having to pay this money, but I suppose in the big scheme of things, it was a lot cheaper than replacing the furnace had he not had the warranty.

I know companies will exclude certain pre-existing conditions. I tried to clarify this with one of the local reps of a company we use. lets say a water heater goes out within the 1st 3 months. if the comapny comes out and sees that the unit is all rusted out and that is the cause of it needing replacement, then they consider it pre-existing because it did not rust out "over night". On some things the warranty company may ask for a copy of the building inspection. If the inspection shows the particular item was in good working condition, then this particular comapny will cover the repair/replacement.

My best advice is that if a buyer is going to ask for a warranty, then obtain a copy of the company's warranty ahead of time. These usually explain in detail what is and is not covered. As I said some companies have better coverage than others, and some have lower deductibles. I usually explain to my buyers that not everything is covered but overall I think the warranties can be worthwhile for the buyer esp if it being paid for by the seller.

Wow, what an experience...or perhaps warning is a better term. No scratch that, horror story is better.

Ostensibly purchasing a warranty is about peace of mind, it's about specific remedy, it's about ease of use when the service is engaged. Having to fight your insurance is in my mind, just wrong. Most particularly in a case like this. This warranty company sounds like a scam.

We recently weathered a massive storm in the Seattle area. A million people lost power and some went without it for as long as ten days (we were lucky that it was out 'only' for eight days). Winds reached 110mph at our house and as we have a wooded lot our roof was punctured, water poured into the living room and walls.

How did our homeowners insurance react (USAA)?

Here's a check for the food in your fridge, here's another check ($500) for your time spent cleaning up your yard, here's another check for the temporary repairs you performed...and here's a giant check for the repairs on your house. Did you stay at a hotel when your power was out? We'd like to pay for that also.

THAT is what a home warranty should be like.

-B

Hi Ann,

I was leaving the office and your post caught my eye since I've noticed my buyers mentioning home warranties in the past. I do think that home warranties, issued by a reputable company, can be a good idea for the buyers especially moving into a new home and also for the seller in that it would give them a peace of mind when they transfer the property over. I was wondering if you or anyone here could recommend a good company they've used? I would think it would be good info to have just in case.

Good post, Ann and I hope everything works out for your clients.

Ann, I try not to let my buyers ever close without a home warranty. Even if I have to buy it! I have had my Old Republic Home Warranty for three years and I will continue to renew it every year. I bought an eighteen year old home. I love my home. It is lovely. it is eighteen years old and all of the maintainence in the world won't keep the "surprises" from cropping up. I have such a good relationship with my home warranty company (because I sell a lot of their plans. I believe in them!) that I can call my own contractors to have things repaired. If I would rather have a cash settlement for a repair, they will do it.

Homeowner's Insurance has gotten to the point that you can't put in a claim without risking the policy being taken away from you. These warranties make life a little easier in a time of crisis.

I have had several agents in the past who say, "My seller will provide a home warranty with ______ Company. It only costs $250.00. They shouldn't have to pay more than that. " Maybe that is true but my experience tells me that you get what you pay for.

Ann, in CA we won't sell a house without a home warranty. It first of all protects the Buyer, the Seller and the agent. Most in fact all E & O companies out here make that part of the condition. Homes Sold as-is don't obviously need to have a home warranty since in most cases whatever is wrong is typically stated.

The home inspector as you well put, knew that the hot water heater was working when he/she turned on all the water and let it run. That is in the inspection report and I would pursue that to the endth degree. From reading your blog, it would seem that this warranty company is not worth their salt. I spend time interviewing Home warranty companies and of course have their brochures before picking one for my Buyers. I've only had 1 instance where a home warranty company refused to pay and it was a grey area but I fought it, contacted the Broker at Remax, wrote a letter on behalf of my Buyers and met with the rep for the company several times...in the end they not only paid but they actually did more than we had even asked for.

Out here in CA, if a Seller (who is uneducated about home warranties) were not to pay for one, the Realtors would pay for it. It's a definite out here!

Start writing your letters and produce your home inspection report and I'm sure they'll see the error of their ways. Good luck.

Mariana - Until this, I had no experience with home warranty companies either. Based on this one experience, I'm no fan of them, that's for sure!

James - Ouch! I'd be totally panicked if my car got stuck in the garage!! Home warranties are uncommon here in my areas, so I wouldn't know a good company from a bad one.

Debbie - Thanks for reading! This is the first one for me in all these years.

Thanks for reading and sharing your comments!
Ann

Eileen - Thanks for the suggestion of reporting this to the BBB and the Attorney General. I have no idea if this is fraud or not, but it sure is a sleazy underhanded way to charge people, if nothing else.

Melissa - For as long as home warranties have been around, I would think there have to be some good companies out there. This one just doesn't sem to fit in that category, sadly.

Collette - This warranty was a 'benefit' provided for by the seller or their agent. It was in place on the propety before my buyers made an offer on it. I've never had a buyer request one of these warranties, probably because they just aren't common at all in this area.

Many thanks for reading and for your comments!
Ann

Bryce - You're right, this SHOULD have been a peace-of-mind policy, and instead it's turned out to be a total pain in the behind for these buyers, and this is just their first week and a half of home-ownership! YOUR insurance company is the cat's meow!! USAA, I should have guessed - my parents have all their insurances with USAA. That is a GREAT military benefit!

Marcus - Thanks, I hope things get resolved very soon for my buyers, although it's not looking that way right now. Since this was my ONLY experience with a home warranty, I don't have any recommendations for you, but perhaps others here can help wtih that.

Virginia - Home warranties aren't common here at all. The price of this particular warranty was $375.00, from what I saw on the HUD Settlement Statement.

Thanks for reading and leaving your comments - very much appreciated!
Ann

Hi Gena - These home warranties aren't the norm here, so our experience with them is mostly non-existent. This warranty was put in place by the homeowner, and the company is one that the listing agency recommends. No idea if they have some kind of connection or not. The inspection report was mentioned, to both the warranty company as well as to the plumber who showed up, and it didn't seem to matter at all.

Thanks for your suggestions regarding the report and the letter-writing!
Ann

I'm the agent who made Virginia get a warranty on the house when she bought it. =) And I insist on them for buyers, no matter the age of the house, since things break. More often than not, it purchases peace of mind. Heaven help the agent who didn't tell buyers about the existence of a warranty when something breaks. In this litigious society? ai yi yi

As others have said, it depends on the warranty company. The reason we use Old Republic so often is that we can talk to live people and they take care of our clients. Usually, one claim pays for the darn thing. Never heard of a mileage charge, though-sounds like a shady contractor in addition to a shady warranty company.

Leigh - It sounds as though there really are some very good warranty companies out there from the comments here on this post, but this particular company just must not be one of theml.

Home warranties just are not the norm here. I'd bet probably 98% of us in my marketplace have had no experience with home warranties.

Thanks for taking the time to read and comment!
Ann

Wow you've really never experienced a HOW on a resale? I've never written a contract with out it and never seen a sale without it. With the exception of on new home sales ands I've actually seen a few on them!

Hi Danny - Nope, in 25 years up here, I've never sold a house with a warranty on it. I've certainly sold new construction homes where we have a 1 year builder's warranty on it up here by law, but nothing on existing homes. Guess real estate really is local as we all keep reading!

Ann

Home Warranties are great. Stick with the big names and you won't have problems. Never, ever had something called as a "pre-existing condition". Never. That's a bad company.

Ann - as I read your post, my blood started to boil - I would call the Better Business Bureau (you can go on line) and report that company - it's absolutely absurd! I have never used a warranty company and I have always been skeptical - now even more. You've been selling real estate for 25 years!! Did you start when you were 5?

Ann

I've been using a company for years - i believe it came to me because it was Re/Max approved. But through the years i've used American Home Shield.

They have been great. I've use them as closing gifts for first time home buyers. Its covered anything from air-conditioners, hot water heaters, electrical and more.

So have hope Home warranties are like the rest ... some good and some bad.

Desiree www.TriCountyHomes4Sale.com

Anne - being local to my area and all - could you shoot me an email with the name of the warranty company? We just switched from the company we used at both my last company and this one, and I have had no experience with the new one. I am HOPING that this isn't the company we switched to!!!! And just in terms of feedback I did use a warranty quite often on listings up until about a year ago. I stopped for a couple of reasons - the main one being the cost factor - it keeps going up. And in my own conversations with my buyers of the new homes, no one had ever put in a claim. So what was $375, now $425 and no one ever used it??? Seemed that the money wasn't well spent. As far as your issue - seems to be if you have a written report from the inspection, you can prove it wasn't a pre-existing condition. Good luck! Liz

Hi Ann - great post on a tough topic and difficult situation. Sorry to hear. When I worked in the Boston area we never saw warranties. Now, in CA, they are always offered and paid by the seller. Gena R.beat me to the topic and did a great job, so I won't elaborate here. There are some great companies out there, as well as bad ones. The contract is the key, and using a reputable firm. Check the BBB for reports on consumer complaints (don't want to advertise a company here). Sounds like the company you are referring to (and perhaps the plumber) may be less than reputable.

Jeff

Ann,

We always suggest our sellers put a warranty on their home. It protests them during the lising period and then carries over to buyers.

The company we use is Aon. We have an excellent relation with them.

Waranties are very popular here. Our company requires they be offered to all clients.

Buyers agents worth their salts will ask for them with the purchase offer.

The company we use is Aon. We have an excellent relationship with them.

We had 2 guys come and look at our HVAC , they were here a couple of hours rerouted some tubing and who knows what wlse, all it cost us was $75

In my area, if the seller is not offering the warranty, the buyers will probably ask for the warranty at least 70% of the time. It really is a pretty standard part of the process. The key is making sure that the warranty company is one that does a good job honoring their claims. We have had several issues come up that the warranty has provided relief for the sellers before closing and the buyers after. I think that is also provides some extra security for the seller and the agent if a problem pops up after closing. The buyer can be told that a home warranty was provided and they should contact the warranty company.

Wow...were these guys for real? I personally have a warranty and my particular one covers water heaters under "normal wear and tear". A 1200.00 replacement job cost me 55.00. You have to be really careful as to which one you choose, but they can be a savior for buyers and sellers.

Good Luck

The purchase of a home warranty - paid by the seller - is actually built into the Board contract that we're to use, so almost all homes (except new builds) are sold with a warranty. My broker offers one called HomeGard and some agents use American Home Shield. Cost ranges from $399-$450. If the seller signs up to buy one for the buyer, it's put in the MLS as such. This also covers the seller while the home is listed. That has come in handy a number of times for my sellers if the mechanicals or appliances fail while it's on the market. We also have gas warranties that are purchased, which covers the gas line to the street as well as any gas problems with the fireplace, water heater, etc. There's no deductible to the gas warranty and it only costs $85.

Sounds like the one your buyers got is a bad one. Never heard of any client being charged for mileage.

FEB

2007

Ann,

Home warranties are on almost every sale here. They usually keep the seller and buyer out of small claims court during the first year if anything goes wrong and are renewable by the buyer each year after that, but cannot be purchased outside of escrow. I had several problems like this several years ago. It means that you have a warranty company who has lousy customer service and lousier still contractors at their disposal. The cure is to call the home warranty company salesperson who sold the policy and have them take care of it. Has worked every time because, they want to continue to sell policies.

I have found that First American Home Warranty is the best in the business, and I base that on the level of service they provide. Oh and by the way, out service calls here range from $35 to $45 and buyers are told to bundle their repairs so they only have to pay one fee.

Charging 2 fees of $75 is robbery, especially when the work was not done, your client should have refused to pay.

Just my 2 cents.

I give the buyer a wide range of products to choose from. It is important to know the area vendor just in case anything like this happens. They are usually quick to get matters cared for. Just my .02

As others have stated, if you are able to produce the inspection report which states that the hot water was functional, the home warranty company will have a hard time stating that the condition was pre-existing. I think the harder you push, the better your results will be.

This is what I love about Active Rain - I'm currently trying to set up a meeting with a Home Warranty rep for this reason. I really don't have a clue what they cover and I can't recommend them if I don't know 100% what they're about.

I hope your client gets his issue resolved - mileage, wouldn't we all be rich if we could charge mileage?

Thanks for this post and conversation. We encourage offering home warranties. We have found that offering a Home Warranty on a listing and placing a rider on the yard sign attracts the attention of potential buyers/investors. We have also found that , when called later on after the sale, buyers report that the level of expertise of the contractor called may nor be "up to snuff". I am going to look into referrals that Ginger and Leigh mentioned and invite them to do informal presentations at upcoming staff meetings.

Ann - all my past deals have had a home warranty for the buyers. The warranty companies range from bad to good. Never great. But, it's worth it. I have one now on my own home and it was a new construction. In the past, I've had my oven, clothes dryer and even a furnace replaced. I've had many things repaired - washer/dryer, dishwasher, pool equipment, refrigerator, etc. Clients of mine have had entire A/C units and furnaces replaced.

I've never heard of paying for mileage, though. Only the deductible. And perhaps permits (may be needed for water heater replacement), disposal fees, etc. But these are usually minimal compared to the overall cost. Check the contract. I know many are now limiting costs for any one repair to $1,500.

As for pre-existing conditions, if the home inspection says the water heater was fine, then you and your buyers need to fight this. Find out who the warranty salesperson is. They're the ones to bring into this and get some resolution. It may take a while - they're not known for acting quickly. But, the salesperson wants to keep the business they have and generate more so they should be your advocate.

Good luck!

Ardell - Yep, I'm thinking this particular company may in the 'less than stellar' category. Since this was warranty already in place, we had no say in who the company was. If this ever comes up in the future, I'll certainly know to question things, that's for sure!

Ines - My blood boils every time I look at this post. And that's why my own personal feelings are that this was a total gimmicky thing, at least in this case. I have since found out that the listing agency just recently switched to this warranty company - I think they've just gotten some rotten feedback from me on it.

Desiree - In reading all these comments, I have learned that there really are apparently reputable warranty companies out there, and if a situation ever comes up again, I'll know some things next time that I didn't this time around. Every situation is a learning experience - that's how I always try to look at things.

Liz - This warranty company was one the listing agency on this house had recently switched to. I'll email you directly with the name of the company.

Thanks for reading and for all these comments - very much appreciated!
Ann

Jeff - Thanks for your comments. I have learned through these comments that there are good experiences with home warranty companies, so I'll have hope that if I ever sell another house that offers one, that it might work out better than this one. I do appreciate the suggestions of the BBB that several of you made.

Ginger & Roger - Thanks for providing the name of the company you use. As I had mentioned, home warranties aren't prevalent up here, so we don't usually have any dealings with them. We have some terrific buyer's agents in this area, and I've never had that request come through on any of my listings - all real estate is local.

Patrick - One would assume that these warranties are great for providing peace of mind, and from all these comments, I'd say they generally do. However, this is the first time I've been involved with one, and that's not what this one offered. And we had no say in who the warranty company was since it was already in place before we even looked at the house.

Thanks for sharing all these comments with me - I really appreciate it!
Ann

Brenda - Unfortunately, yep, for real! You can bet that from now on, if a warranty is mentioned at all, I'll be checking it out to make sure it's not this particular company.

Elaine - Wow, right in your board contract forms? I would guess that if that many people in your area use home warranty companies, then they're on their toes making sure they do a good job or they won't get the business. Competition breeds better business........ maybe that's what's wrong here.

Laurie - I can see how they'd work to keep claims in court down to a minimum, assuming they work as they seem to from all these comments. I do like the suggestion of calling the person who actually sold the policy, if I can get that information. Someone certainly needs to be made aware of what's gone on, and perhaps step up to the plate in what needs to be done. I, too, thought the 2 separate fees AND the mileage was not right.

Thanks for reading and commenting!!
Ann

Renee - If only I had known this warranty company, I know that would have helped. These warranties just aren't used much at all in this area.

Stefan - We do have the inspection report, and that was provided to the plumber, however I'm going to make sure it gets mentioned to the warranty company, and anyone else we can get to listen to us on this. Thanks for suggesting that.

Ed - I hope this post, and all these comments, help you with your meeting. Oh, if only I could charge for mileage...... only I can't imagine ever trying to do that! ;-)

JaneAnne - You're welcome! I'll be looking into this whole thing with these companies as well, and I appreciate all the company suggestions.

Ann

Don - It sure does seem like there really are some good home warranty companies out there, if home warranties are prevalent in your area and are expected. It's too bad that none of them are "great", isn't it? I am going to do what I can to find out who the salesperson was on this policy - not sure how far I'll get on that since it's something the listing agency put in place, but I'm going to try.

Ann

Ann - since the listing agent placed this policy, get the salesperson's info from him or her. They will probably want to keep that listing agent happy...

The listing agent should be more then willing to provide this info to you, I would think...

Hi Don,

You must have ESP - I just got off the phone trying to reach that agent. She wasn't in, so left a message for her. But your comment is the whole reason I called her - to find that out. She has been kept posted on all this from the start, but I never thought to ask for the salesperon's name who sold the actual policy. This agent does a decent business, so I would think that could weigh in our favor, if she gets them all from this same person. I do a pretty decent amount of business as well, and I would think they would like to avoid any negative PR they might receive.

Thanks for the suggestion - AR is GREAT for this kind of help and advice!!

Ann

Ann - this first home warranty company I used took 3 months to replace an A/C unit for a client of mine - of course, this was over the summer. They never got any future business from me. Fighting with the warranty companies can be difficult, but it's worth a shot. Those clients DID get a new A/C unit, and they were NOT charged for any permits, disposal, etc. And, then another company got all my future business.

The main problem I've had with warranty companies is that they're notoriously slow to respond. Call in a claim, it's about a day before the repair person calls to set up the appointment. Then, after they come, they have to get it approved - that's usually another trip out, unless it's something minor.

I wouldn't use my warranty company for things leaks that need to be taken care of immediately. But for everything else, I use them. But, did you know that lack of heat is NOT considered an emergency? I never understood that one...especially when it was my furnace that dies one January. Two weeks of space heaters saved me a fortune in repair bills, though.

Let us know how all this works out in the end.

Ann, here's the way our contract reads:

5. Warranties:

5.1 Home Maintenance Plan: The Seller, at the Seller's expense not to exceed $______, shall provide a home maintenance plan from ___________________, (not applicable if plan name not inserted). The Broker may receive compensation in connection with the sale of the home maintenance plan.

5.2 Gas Line Warranty: the Seller at the Seller's expense not to exceed $________ (not applicable if the dollar amount is not inserted) shall provide a gas line warranty from a gas line repair company. Seller may obtain the gas line warranty from a vendor of the Seller's choice, unless Buyer specifies a specific vendor hereafter: ______________________.

Ann,

We promote Home Warranties on all of our listings and have developed a very good relationship with the local VP of the company. The company we use is HSA and I highly recommend them. We've discovered that by creating a partnership with this vendor on a personal level helps get results when a problem comes. As far as pre-existing conditions, Water Heaters don't last forever.

Ann,

Excellent post! My company promotes home warranties...I have never experienced one being used personally so what your describing sounds absolutely crazy. Why have a warranty in the first place if this how the service end of it works! Thanks for the eye opener!

Don - It sounds like your clients did get their problems resolved, but taking that long to get things squared away is a problem, too. There is on reason on earth that service should have to be like that. It almost seems as though the warranty company was trying to out wait the clients - not good.

Elaine - Thanks for sending along that wording. That would certainly work to promote use of those warranties. I thought the gas line warranty was interesing. Are there many problems in your area with gas lines?

Frank - I would imagine having that kind of relationship with that company, and any company for that matter, would make a huge difference in the way your clients are treated when/if they need to use their warranty.

Monika - Hey!! It is sbsolutely crazy in my opinion! And you're right, what on earth is the point of having a warranty in place if this is how things are treated?

This warranty was put in place by the sellers while they had it listed, and then it transferred over to my buyers for a period of one year from the date of closing. And they have the option of renewing that policy. Jeez, wonder if they'll have any interest in renewing???? No?

Thanks for reading and for the time to comment - appreciate them all!
Ann

Wow Ann, that's no fun. talk about loopholes! I hope it works out for the buyers is something new happens within the year. the mileage charge is ridiculous.. that is some nerve! you would think the deductable was

for just that! live and learn i guess. now i'm subsribed.. sorry i lost you for a while there. :)

Hey Nick!! Thanks for 'finding' me again! And yep, NO FUN at all!

AnnCummings.com

MAR

2007

With all the contracts and paperwork Realtors have, home warranties simply add more fine print. It is a requirement in our area that it be offered to the homeowner, and then if it is refused it has to be signed also. Part of the Department of Redundancy Dept. Prices on the home warranties have gone from $250 up to $750 - and Sellers expect the Realtor to pay for it. No fun at all.

Margaret Ann - No fun is RIGHT!!! And that's quite a price jump, too. That's really too bad that sellers expect their agents to pay for that. We already shoulder enough burdens as it is.

Thanks for reading and for your comments!
Ann

MAR

2007

I have had a few questionable experiences with home warranty companies as well, I will just quick share the most recent one. We negotiated a sale with a buyer on my listing, and they asked for a home warranty, because they new the furnace was original (1977) still functional but nearing the end of its expected life. So we agreed and during the home inspection they found a crack on the heat exchanger. We went to file a claim and after paying the $50 deductible they said pre-existing condition and denied the claim. We went round and round with them they where supposed to pay $500 towards a new furnace for my seller but they wouldn't and didn't. We cancelled the warranty because the sale fell through because of the fiasco, and I think it will cost my seller alot more than just the new furnace they had to put in at their expense, but now we have to find a new buyer.

MAR

2007

Ethan - As this was my first experience with a home warranty, I can tell you with what you wrote about yours, I'm of the mindset that they help no one other than the person who sells the policies. My buyers did get the part of the first deductible back (the mileage portion) and the warranty company said they no longer use that vendor who charged for his mileage. But the situation has still not been remedied, despite us having a home inspection that said the hot water heater worked before the closing.

Too bad we had these experiences - I know I'll never look at a listing having a warranty on it as a selling benefit. Maybe I'll be proven wrong at some point, but not just now.

Ann

MAR

2007

I would certainly recommend against using First American Home Warranty. The customer service is horrible and the company does not cover what it states in the contract. When I had a plumbing leak that damaged the my ceiling, the customer abuse rep said that they would only cover someone to come out and unclog the toilet and that they would not repair the leaky pipes or any "secondary damage". The home buyer is better off financially just fixing things themselves as the need arises. First American Home Warranty is a scam. Just check out epinions and look into the class action lawsuit against the company.

MAR

2007

C Carson - thank you for reading and for sharing your experience - that sounds like a miserable experience. I appreciate the information on First American. I had not heard about the lawsuit, and will go check that out.

Thanks again for reading, and for sharing your comments.

Ann

I, too, have had problems with First American Home Warranty back when I was on the west coast. I do not know if the problems were caused regionally (poor local service providers, poor local customer service) or if it is a problem with the company as a whole. I don't know where C Carson is located - it may be a west coast issue?

While I am a "believer" in home warranties, if you will, I also believe that if it's a major issue - a flood, a bad leak, etc. - that you're probably better off taking care of it on your own so that it will be taken care of quickly. However, if your oven dies, or your dryer goes on the fritz, or there's a plumbing mishap that is not causing flooding, then a few days while dealing with the warranty company's red tape may be worthwhile. I think the warranties are great, but sometimes you need to handle things on your own, even at a cost.

Just my opinion from years of dealing with these companies. And, no, I do not make any money by recommending any home warranty companies!

Hi Don - thanks for your comments. It seems that it's the luck of the draw on experiences with home warranties. Personally, I'm still not sold on them, and I'm glad that they don't play much of a role here in my market areas. I'd hate to have my hand forced on those, knowing of the lousy reputation some of them have.

Ann

I sell home warranties on all for my houses. I only use First American Home Warrany. The rep is super nice and she goes to bat for my clients. If iI have a claim turned down, I call our rep and she gets involved and takes care of the issue. (9 times out of 10 the claim is paid.) I have not had any problems at all with them.

MAR

2007

Hi Carmen - thank you for reading this post and sharing your experience with home warranties. It really does seem to be more WHO you deal with that determines the real value of these warranties. And by WHO, I mean the representative you deal with. Sounds like your experience has been far more positive than others have had.

Thanks again for your comments!
Ann

MAR

2007

Home warranties have their place. Its important to go over all the covered and non-covered items with both the buyer and the seller (since the seller usually buys the policy) Buyers need to be aware that the warranty is not a fix all, and that many items are excluded unless extra coverage is purchased.

Customer service, I think is utmost important. The warranty company hires out work with local service people who might not be the nicest in town. When you have a problem with one, the warranty company rep should be able to set them straight. Of course that means your rep needs to be reachable. A Cell phone # is essential. Our warranty reps know that our reputation is one the line when they fail in the customer service department.

I currently have a small claims case against NATIONS RESIDENTIAL home warranty based here in Dallas. They screwed me on my personal house so much, they lost so much business from me because I would close anywhere from 10-15 transactions a year where they buyer chose them as their company. I no longer allow their brochure to be in my buyers' hands, and I provide 4-5 other company brochures.

I don't care for home warranties as they usually say something is either pre-existing or an improper install, but it's customary in my market for the seller to provide one year to the buyer, not to exceed about $400.

I will NEVER get a home warranty again! Maybe our case will end up on Judge Judy... I'm waiting for the call!!

JAN

2008

I work for a very repuable Home Warranty Company for 18 years. The name of the company is Old Republic Home Protection. I also have it on 37 rental properties.. I would not be with out one. It is also a tax write off for me. The cost with the new paltinum plus and air conditioning is only $445 with a $55 deductible. In California we are regulated by the Insurance department. Home warranties dont cover everything and that is the problem. Buyers are told if anything breaks call your warranty....We now have a new product that makes that more true. We now cover alot of common denials. Unknow preexisting is coveredl,lack of maintaincel,tree roots, they will even install a clean out if you have a stoppage and you dont have one. They are only as good as the liscensed technicians that come out so make sure your company rates them. Our contractor relations department rocks.... All states are different but one of the responders were right get a brochere and read it. If theres is like ours it will say word for word what is covered and what is not.

I had a warranty company burn me good on my personal unit for about 6K! I still use warranties from other companies.

JUL

2008

I'm guilty of giving home warranties as closing gifts in the past because from my PERSONAL experience they are valuable. You may want to check out my post as well "Is a Home Warranty Worth It?"

Happy Selling,

Christina

SEP

2008

While I'm sure that home warranties can be really good to have, it probably depends a lot on the company you purchase it through. I have one from American Home Shield. My experiences with them have been awful. Their customer service reps are rude and unhelpful. I really get the impression they try to make filing a claim as difficult as possible. I ahve had to have service on my AC unit 3 seperate times this summer bacause they send a second-rate company who always does a shoddy job. It was only 35 days between the first two dates of service, but I was charged seperate service fees because they only honor the work for up to 30 days. Coincidentally, it would not have been more than 30 if the complaint had been attended to in a timely fashion.

JAN

I live in Virginia where we offer warranties on all of our transactions. I only use one warranty company and that is American Home Shield. The rep for this area is excellent. We all have her direct number and our clients have her number. If we ever have a problem, she seems to have the magic touch to get it resolved. I used to use 1st American, but tried American Home Shield a few years ago and now won't use anyone else. I helps to have a good working relationship with your rep.

APR

Steve,

I'm in Virginia as well (central VA) and offer AHS to all of my clients. I don't know if we have the same representative, but mine is awesome. She's the reason our office supports her company. Always the first to help and is really what customer service is about. KUDOs to her. The AHS warranty has always been there for my clients and as long as my rep is here, we will always back AHS.

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