Home Warranties: headache or helpful?

By
Real Estate Agent with Prudential California Realty
https://activerain.com/droplet/4Wlj

QuestionBefore becoming an agent, I bought my first home.  The sellers paid for a home warranty through Old Republic Home Warranty.  At the time I didn't think much about it because I had just become a home owner and was too excited.  About a month later, my water heater was having obvious problems.  Somehow, I remembered that I had the home warranty and called the company to fix it.  The first plumber through the warranty came out and said nothing was wrong. A second plumber came out and said he couldn't figure out the problem.  I ended up hiring a local plumber who did a lot of work in the subdivision and recognized the problem immediately. After paying that company for diagnosis I called the warranty company again. This time they had someone else come out who realized that the problem was the same one my plumber found. They replaced the water heater, and I paid a little extra to get it upgraded.

After that I always renewed my home warranty because I saw its benefits.  I bought some rental homes in other states and had American Home Shield and First American Home Warranty on those homes.  I still continue to have warranties on all my property, even if the home is fairly new.

Recently, I have had a problem with my Air Conditioner.  Same routine as before: A/C guy comes out and "fixes" the problem.  I think he made the problem worse, and the warranty company has another tech coming out.  Hopefully it will be fixed this time, but I've already had to involve a supervisor.

I started thinking about the headaches associated with home warranties and came to some realizations:

  • I think home warranties are great, and support renewing them at expiration.  I have definitely gotten my money's worth through the years.
  • I don't think there is much difference between the home warranty companies.  They all seem to operate the same, almost like getting procedures authorized by an HMO.
  • If there's an issue with the repair, you have to take initiative and keep on top of it otherwise you get put on the back-burner.
  • There are some really bad technicians accepting work from the company, but there are some wonderful technicians too. Unfortunately, you can't just request a certain company to do the repair.
  • If the problem persists, make sure you talk with a supervisor at the warranty company to have them take a personal interest in getting the repair done.
  • If the warranty company can't seem to get the repair done, ask for a "cash out" for the problem so you can get the work done on your own.

As an agent, because I found that the companies are the same, I try to get warranties for my clients where I have a direct and professional line of communication with the representative from a particular warranty company.  I will always remind my client that they have a warranty after escrow closes.  If a client calls me with some frustration about having a repair made, I will call the representative for help. Usually the rep can get things done easier than I (or my client) can. 

Although dealing with home warranty companies can sometimes be frustrating, I think overall they provide so many worthwhile benefits and will continue to renew mine.

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Rainmaker
281,679
Mike Mitchell
Real Living Kee Realty - Saint Clair Shores, MI
REALTOR (R)
Hi Deborah - good post, I try and get my sellers to offer a home warranty plan, it's very helpful in marketing for the cost. I also always try and get a home warranty for my buyers, I just think it's a nice thing to have for the first year of home ownership.
Aug 29, 2007 07:34 AM #4
Rainer
5,071
St S
Mou - Pleasant Grove, UT
This is a great personal experience for dealing with home warranties.  Many people don't fully understand their benefits.  Thanks for your input.
Aug 29, 2007 05:20 PM #5
Rainer
24,192
Vicki Bishop GRI - Alabama Real Estate
Coldwell Banker United Realtors® - Bay Minette, AL
My son got a home warranty on the home he bought in April. In the later part of June the A/C went out. It took till the first week in August to get his air repaired . he went through the whole month of July without air. i doubt that he will renew home warranty.
Aug 31, 2007 02:21 AM #6
Rainer
1,902
Brinette Holdren - Residential Licensed Broker
The Holdren Group, Inc. - Manhattan Beach, CA
Thanks for the insightful post. I include a home warranty in every purchase contract to be paid for by the seller. No one ever argues (well almost never) and it pays off when the buyer has a bathtub problem the week they move in. What a great benefit for such a small price.
Oct 04, 2007 02:36 PM #7
Rainer
10,730
Phil Victor
Top Tier Properties - Richmond, VA
Richmond, Virginia Homes, Real Estate & Property Management
Deborah, one thing to add - all home warranty companies are similar, but not the same (customer service, coverage, etc.).  When we opened the doors to our brokerage, we decided to affiliate ourselves with several home warranty companies.  We provide the information of these home warranty company to our buyer/seller clients, allowing them to decide who they want to use.  Our clients are thrilled to be able to choose the best coverage for their house.
Dec 25, 2007 03:49 PM #8
Rainmaker
90,144
Dee Neal
Palmer House Properties - Alpharetta, GA
Atlanta Area Real Estate
home warrenties are definately worth it in my book. you'll definately have some service issues but at the end of the day they are a help. the home warranty sign rider on the front lawn definately helps sell a listing.
Dec 26, 2007 05:32 AM #9
Rainer
6,241
Kerry Constantine
Power Brokers Real Estate - Fort Myers, FL
Some warranty companies may be good but I have had negative experiences with American Home Shield. I would never use them again.
Jan 23, 2008 02:42 AM #10
Rainer
3,679
Demetria Scott, Baltimore, MD -- SRES, ABR
Long & Foster Real Estate - Baltimore, MD
Thanks, Deborah.  I appreciate the insight.  I am always encouraging my first-time buyers to get a home warranty, but I never knew much about the service offered once the warranty has been issued.  From this point on I will be sure to let them know that some follow-up and patience may be necessary on their part.
Jan 27, 2008 10:14 AM #11
Rainer
4,151
Tim Monigold
Exit Three Rivers Realty - White Bear Lake, MN

When I bought my home I recieved a warrenty from Home Warranties of America. I have had good and more bad things with them. I had a plumbing problem where the drain was cloged and they sent a plumber out who looked at it then left. He never said anything to me. So I called Home Warranties of America and told them to cancel the work order and I would fix it myself. I did fix it but then next time that I a issue with my heater they couldnt get anyone out that day and and it was below zero outside. I just called the number on the side of the heater and they came out that day! So I guess I have had more  problems with them. That could just be that company. I have yet to figure out if I am going to sign up again for it.....

Jan 30, 2008 02:47 AM #12
Rainer
62,465
Bart Whitmore
Keller Williams- Louisville - Louisville, KY
Real Estate Agent
I am a very firm beliver in home warrentys and have wrote a couple of blogs on them myself.----Bart
Mar 10, 2008 10:42 AM #13
Rainmaker
100,900
Lisa Ryan
Callaway Henderson Sotheby's International Realty - Montgomery, NJ
Selling Princeton,West Windsor and Montgomery Town

American Home Shield is the warranty that I offer through my company.  I can't tell how often this has been worth the money to my sellers who use it to help with the inevitable inspection issues.

Jul 06, 2008 07:05 AM #14
Rainmaker
647,599
Team Honeycutt
Allen Tate - Concord, NC

I agree that warranties are great for bothbuyers and sellers! Sometimes the process is a pain, but in the long run they will save you tons of money. It also provides buyers a sense of security buying that home on the market with a warranty!!!

Sep 03, 2008 02:55 AM #15
Rainer
75,895
Marlene Pellegrini
Norwich, CT

If you are a few days before closing and the furnace acts up....it will save you everytime!  I believe in them.

Sep 10, 2008 01:50 PM #16
Rainmaker
647,599
Team Honeycutt
Allen Tate - Concord, NC

I believe I have commented on this one before and I still believe every transaction should involve a home warranty. It protects everyone involved and will save someone headaches in the future.

Oct 28, 2008 01:54 AM #17
Rainmaker
647,599
Team Honeycutt
Allen Tate - Concord, NC

I have really enjoyed working with our home warranty company.  It makes it easy to sell and or buy if you respect the company. 

Oct 31, 2008 08:12 AM #18
Rainmaker
798,159
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Deborah, I do believe home warranties are worth it as well.  The problem arises because home warranty companies are in business to make money, and not to have to fix everything that breaks in a house.  Of course they are not going to make it easy for you to get things fixed, but persistence will pay off.  If you have to go to upper management for resolution, then by all means do it.  If they are offering you their warranty service for an annual fee, then they better uphold their end of the agreement.

Feb 07, 2009 06:13 PM #19
Rainmaker
1,560,731
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

You have great comments!  I posted this blog regarding the lawsuit that's looming over AHS head.

Not trying to plug my own blog, but it certainly is a GOOD read with opinions from the general public, apparently it is picked up on searches.

http://activerain.com/blogsview/944891/AHS-American-Home-Shield-Class-Action-Lawsuit

Mar 30, 2009 08:53 AM #20
Anonymous
Carol

Carla,

I have recently heard that the attorneys who filed the lawsuit against AHS has also filed a national suit against Old Republic, First American and Fidelity. I guess once he went after the largest company, he's going after all of the rest. This country has become so sue happy that it is ridiculous.

Apr 05, 2009 03:50 AM #21
Rainer
6,276
Tina Thelen
Keller Williams Realty - Lafayette, IN

Our office policy offers the Home Warranty as part of our listing packet.  The seller has the option up front to eiher offer or "waive" the service.  We also offer this to ALL our buyers as well.  Personally, I've only had one client to date who's actually had to file a claim, and unfortunately, this policy's "fine print" did not cover the items my buyer was having difficulty with, so he had to pay for it out of pocket, but overall I think it can be a plus!!

Jan 14, 2010 12:29 PM #22
Rainer
57,257
Deborah Engel
Prudential California Realty - San Diego, CA
San Diego Homes & Property

Thanks for your comment.  I like the idea of bringing it up in the listing packet. I haven't done this yet.  FYI, since writing this, I no longer deal with First American Home Warranty.  They have been awful for me and my clients to deal with.  I connected with a great Old Republic Home Warranty rep, who has been great in helping with issue. Hopefully Old Republic will continue to be good.

Deb

Jan 14, 2010 03:12 PM #23
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Deborah Engel

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