Home Warranties: Seller's Coverage

Real Estate Agent with United Real Estate TX #0552717

Greg Nino posted on ActiveRain today, asking if Home Warranties are Worth a Damn. His post has inspired this one.

Whether a seller offers to pay for the first year of a buyer's residential service contract or not, I always encourage my sellers to opt for the seller's coverage, available through several companies licensed in Texas.

About 5 years ago, one of my sellers had the seller's coverage in place even though she didn't think she needed it. The buyer's inspection report came in showing problems with both AC units. Both units were replaced under the residential service contract. All she had to pay was the cost of the service call. At that time, I think it was about $45. And the cost of the seller's coverage, about $50 over and above the first year of the buyer's policy, was paid at closing through the proceeds of the sale of the home.

Fast forward to this week. One of my sellers didn't take my advice and get seller's coverage. It would have cost him $60 and was payable at closing. The inspection report arrived along with an amendment, sent by the buyer's agent. You probably guessed it. Big problems. A cracked heat exchanger, rusted evaporator coil, defective ducts, problems with the garage door, problems with the water heater, and more. The seller has asked for, as is getting, THOUSANDS of dollars in allowances.

I haven't said "I told you so" but I'm 100% certain my seller can hear me thinking it.

Posted by

Lorrie Semler, e-PRO, GRI, SRES, CPRES, CRS
Addison Resident/Addison Specialist                                                      Subscribe Button
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Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

Hey Lorrie! Thanks for the mention.

"One of my sellers didn't take my advice and get seller's coverage." <--- Classic!

Aug 22, 2012 06:31 AM #1
Alan May
Jameson Sotheby's International Realty - Evanston, IL
A moving experience!

The home warranty plans that we use here, often don't cover "pre-existing", and they consider rust (which typically leads to cracked heat exchangers, coils and ductwork) to be a pre-existing condition.

Aug 22, 2012 06:31 AM #2
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

Lorrie, Which company(ies) are you recommending these days? AHS is the only one I'm aware of that does pre-existing and improper installs.

Aug 22, 2012 07:23 AM #3
Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417
United Real Estate - Addison, TX
Real Service. Real Results. Real Estate

Greg: You inspire me. What can I say!

Alan: Most won't cover pre-existing here either, but it NEVER hurts to call them in and at least make sure what the buyer's inspectors found is correct and get an estimate to repair or replace.

Donna: Call Tammi Burgee at Fidelity National Home Warranty. 214-732-5999. She can tell you who handles Austin. And their premium plan covers code compliance issues for bringing things like water heaters up to code. First American, I think, also has seller coverage.

Aug 22, 2012 07:32 AM #4
John Pusa
Berkshire Hathaway Home Services Crest - Glendale, CA
Your All Time Realtor With Exceptional Service

Lorrie - Thank you for sharing detailed quality information on home warranties seller's coverage.

Aug 22, 2012 08:51 AM #5
Sharon Parisi
United Real Estate Dallas - Dallas, TX
Dallas Homes

Seller home warranty policies are worth their weight in gold!  Tammi Burgee is a great rep and Fidelity Home Warranty has helped many of my buyers and sellers.

Aug 23, 2012 02:36 PM #6
Beverly Polyniak

You can look like a HERO to your clients. If the seller won't pay for it, give them the gift of the coverage. The gift that keeps on giving for so little, you can't help ubt be a winner in their eyes. It is called referral business.....

Lorrie is absolutely correct..Sellers Coverage (SC) can save your clients a lot of money.. When covered items break down during the listing period or the inspector notes covered items that are in need of repair, all it takes is a call to the warranty company to have it fixed.

Air Conditioning is the #1 call for service and #1 concern to the buyers. With SC in place it helps to possibly eliminate some of those pesky pre-existing conditions that no one covers. It does not guarantee elimination of all pre-existing conditions left on the property but it is certainly worth the money for the peace of mind it gives the seller, especially for AC issues.  We, at Old Republic Home Protection, cover Undetectable Pre-existing conditions in our Standard plan so our sellers have the benefit of this coverage.

To view our plan and sellers coverage go to www.orhp.com

Beverly Polyniak, Sr. Account Executive with Old Republic Home Protection, Austin Texas

Aug 27, 2012 03:49 AM #7
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Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417

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