Home Warranty

[sbuskey (Stephen Buskey, II)]

Hello,

Can someone direct me on how I can offer a home warranty with my home inspections. I know that Home Gauge has a program that the customer can purchase but looking to include a 90 day home warranty with all my inspections regardless if they buy a home warranty or not.

Thank you in advance,

Stephen

[escanlan (Emmanuel Scanlan, TREC# 7593)]

@sbuskey

Hello,

Can someone direct me on how I can offer a home warranty with my home inspections. I know that Home Gauge has a program that the customer can purchase but looking to include a 90 day home warranty with all my inspections regardless if they buy a home warranty or not.

Thank you in advance,

Stephen

Why? They’re just junk marketing pieces intended to draw consumers but provide no real benefit to them.

[frotte (Frank Rotte)]

You could call the King of Widgets.

[escanlan (Emmanuel Scanlan, TREC# 7593)]

@frotte

You could call the King of Widgets.

What should he be called? :twisted:

[imayer (Ian Mayer, CMI)]

In my area, every agent negotiates for their buyer a 1 year warranty.

Why do the agents for them when they’re already going to do their job anyway?

[rray (Russel Ray)]

There is a huge difference between the 1-year home warranty that Realtors typically get for their buying clients and a 90-day warranty such as that offered by Nathan Thornberry.

I offered a 90-day home warranty during my first five years in business because it was offered to us as franchisees of The HomeTeam Inspection Service.

The 90-day home warranty typically starts on the day of the inspection and terminates the day escrow closes, or after 90 days, whichever is earlier. However, in the case of HomeTeam’s 90-day warranty, it went for 90 days or the day escrow closed, whichever was LONGER. So even if escrow lasted for six months, the home warranty was in effect.

The reason why the 90-day home warranty is useful is because once a home is in escrow, the sellers (wrongly) believe that the home is no longer theirs, so they are quite hesitant, even defiant, in filing a claim against their home insurance policy when something breaks or is damaged during move-out. Instead, they simply say, “Oh, your home inspector must have missed that.”

I was quite happy with the warranty we got through HomeTeam. It paid off in several circumstances, no questions asked. File a claim, pay your deductible, and the rest was covered.

Deductibles were reasonable, as well. The best example I can think of right now was when I inspected a 900-SF, 2 BR/1 BA home. The bath was not accessible at the inspection. As we all know, bathrooms can be critical. Well, turns out that the bathroom was not accessible because there were many plumbing/drainage problems in it.

When my clients moved in a couple of days after escrow closed, the toilet/bathtub-shower/sink all clogged and backed up into the bathroom. My Client was furious, but the Sellers had already skipped the country as they were in the military.

The plumbing repair bill was on the order of $12,000. My 90-day home warranty covered all of it except for the $50 deductible. My client was the happiest person in the world, and I got tons of referrals from her and her Realtor over the years.

Cost of the 90-day warranty to me: $5.

Best $5 I ever spent.

Additionally, while it is true that the Seller and/or Seller’s Realtor provides a 1-year home warranty, one really doesn’t want to file a claim against that in the first weeks or so unless it is a serious claim, like my client’s plumbing situation. A claim against your policy is going to result in a premium increase when it comes up for renewal. A claim filed against the 90-day warranty that I provided would result in no premium increase to the Client, nor to me for that matter.

By the way, I can highly recommend Nathan’s 90-day warranty. I have seen the good that it provides, and while many people here don’t like Nathan, I don’t have a problem with anyone who can make me look good in the eyes of my Clients.

[escanlan (Emmanuel Scanlan, TREC# 7593)]

@rray

There is a huge difference between the 1-year home warranty that Realtors typically get for their buying clients and a 90-day warranty such as that offered by Nathan Thornberry.

I offered a 90-day home warranty during my first five years in business because it was offered to us as franchisees of The HomeTeam Inspection Service.

The 90-day home warranty typically starts on the day of the inspection and terminates the day escrow closes, or after 90 days, whichever is earlier. However, in the case of HomeTeam’s 90-day warranty, it went for 90 days or the day escrow closed, whichever was LONGER. So even if escrow lasted for six months, the home warranty was in effect.

Many of these 90 Day warranties only last for 90 days from the inspection or two to three weeks after closing if closing takes the full 90 days of the 90 day warranty time. NAR recently reported average closing times at about 51 days http://realtormag.realtor.org/daily-news/2016/02/18/closing-times-lengthen-again . So the most the new owner gets for coverage on a 90 day warranty in this example is 39 days and possibly more if they closed sooner, or less if they close later.

Using the NAR example of 51 days the new owner would have to suffer an issue and make the warranty claim within their first 39 days of living there. Those first few weeks fly by so quickly with the stresses of moving in, setting up the new home, and just living their normal lives they can easily miss their claim window time when much more important and possibly costly issues occur they need to deal with. At least with the full one year warranty they don’t have to worry about some minimal time limit to file a claim.

The reason why the 90-day home warranty is useful is because once a home is in escrow, the sellers (wrongly) believe that the home is no longer theirs, so they are quite hesitant, even defiant, in filing a claim against their home insurance policy when something breaks or is damaged during move-out. Instead, they simply say, “Oh, your home inspector must have missed that.”

If a Home Inspector properly performs their job there are relatively few issues that they can be blamed for unless they actually did miss the issue. If the Inspector misses it that’s what their Errors & Omissions insurance is there for and they should be carrying E&O if they are serious about their job.

I was quite happy with the warranty we got through HomeTeam. It paid off in several circumstances, no questions asked. File a claim, pay your deductible, and the rest was covered.

Deductibles were reasonable, as well. The best example I can think of right now was when I inspected a 900-SF, 2 BR/1 BA home. The bath was not accessible at the inspection. As we all know, bathrooms can be critical. Well, turns out that the bathroom was not accessible because there were many plumbing/drainage problems in it.

Some of these 90 Day warranties only cover items confirmed to be in good working order at time of inspection. Since you were unable to confirm then this particular example would not be covered.

When my clients moved in a couple of days after escrow closed, the toilet/bathtub-shower/sink all clogged and backed up into the bathroom. My Client was furious, but the Sellers had already skipped the country as they were in the military.

Some of these 90 Day warranties don’t cover water damage or items that are inaccessible
without the removal of drywall, concrete, or other permanently installed covering. I can’t see how “clearing” a clog (snaking a line) could cost $12,000.00 unless the repairs required removing those permanently installed coverings?

Some of these 90 Day warranties also only cover items that have been maintained as per the manufacturer’s requirements or other reasonable standards. Since those were not maintained they would not be covered.

Some of those 90 day warranties do not cover plumbing stoppages of any kind no matter how they are caused. They also don’t cover neglect so this would not have been covered.

The plumbing repair bill was on the order of $12,000. My 90-day home warranty covered all of it except for the $50 deductible. My client was the happiest person in the world, and I got tons of referrals from her and her Realtor over the years.

Some of those 90 day warranties limit any pay outs to way less than $12,000. After all the warranty provider sells them to Inspectors for only $5.00 or $10 and if they can’t make their money off selling them other stuff, like alarm systems, it would be a significant loss to them to pay out a lot of high dollar claims.

Cost of the 90-day warranty to me: $5.

Best $5 I ever spent.

Additionally, while it is true that the Seller and/or Seller’s Realtor provides a 1-year home warranty, one really doesn’t want to file a claim against that in the first weeks or so unless it is a serious claim, like my client’s plumbing situation. A claim against your policy is going to result in a premium increase when it comes up for renewal. A claim filed against the 90-day warranty that I provided would result in no premium increase to the Client, nor to me for that matter.

The policy increase scheme you’re speaking of is homeowner’s insurance and not warranties since even the full one year and more warranties typically cap coverage’s anyhow to some life time limit for the length that particular owner has the home. Also since the warranties all typically depreciate system values over time they tend to pay less and most typically won’t pay anything on some systems over 10 years old anyhow.

These one year home warranties are there to help the new owner handle issues that come up when they least expect it. Yes it isn’t worth even making a claim on one for an issue they can cheaply repair themselves but many home owners don’t know what it takes to repair something and are concerned about a large bill if they try to repair it or have to call someone in. It is ignorant for a homeowner not to exercise their one year warranty and try to save it for some big thing that might not ever happen. After all the cost of the one year warranty is small compared to the cost of what might need to be repaired.

By the way, I can highly recommend Nathan’s 90-day warranty. I have seen the good that it provides, and while many people here don’t like Nathan, I don’t have a problem with anyone who can make me look good in the eyes of my Clients.

See blue above.

Do you have a copy of The HomeTeam Inspection Service current 90 day warranty they are offering if they are still offering it? It would be interesting to see and compare it against some of the other 90 day warranties being offered.

BTW military members don’t “skipped the country” unless their term of service is up and they voluntarily leave or they go AWOL (Absent Without Leave) which we know is a crime. Otherwise military members are reassigned and have little choice on departure times and next duty station. Also it is so much easier to pin down a military member than a civilian if they do something nefarious and try to leave it behind them. All the civilian has to do is contact the military Judge Advocate General (JAG) who can reach around the world very easily to punish a military member and force recompense to the civilian if deemed appropriate.

[jfrederick (Joshua Frederick)]

Do warranties cover older appliances, such as, but not limited to, a 17 yr. old water heater?

[escanlan (Emmanuel Scanlan, TREC# 7593)]

@jfrederick

Do warranties cover older appliances, such as, but not limited to, a 17 yr. old water heater?

All of the 90 Day warranties I’ve seen exclude them when they are over 10 years old. Many full one year warranties also either exclude them or significantly limit coverage for them when they are over 10 years old. Not sure where the 10 years came from but a well designed, installed, and maintained water heater can easily last well past 10 years.

[jfrederick (Joshua Frederick)]

@escanlan

All of the 90 Day warranties I’ve seen exclude them when they are over 10 years old. Many full one year warranties also either exclude them or significantly limit coverage for them when they are over 10 years old.

That’s about what I’ve seen to. Almost every time I mention that something is older, an agent will quickly chime in about the spectacular “warranty that covers everything.”

[frotte (Frank Rotte)]

I never knew.

[rray (Russel Ray)]

@jfrederick

That’s about what I’ve seen to. Almost every time I mention that something is older, an agent will quickly chime in about the spectacular “warranty that covers everything.”

Both the 1-year warranty and the 90-day warranty cover everything, “with limitations and exceptions”…LOL

[rray (Russel Ray)]

@escanlan

Many of these 90 Day warranties only last for 90 days from the inspection or two to three weeks after closing if closing takes the full 90 days of the 90 day warranty time. NAR recently reported average closing times at about 51 days http://realtormag.realtor.org/daily-…lengthen-again . So the most the new owner gets for coverage on a 90 day warranty in this example is 39 days and possibly more if they closed sooner, or less if they close later.

Huh? If escrow closes in 51 days, and the warranty ended at close of escrow, that’s 51 days.

@escanlan

Using the NAR example of 51 days the new owner would have to suffer an issue and make the warranty claim within their first 39 days of living there. Those first few weeks fly by so quickly with the stresses of moving in, setting up the new home, and just living their normal lives they can easily miss their claim window time when much more important and possibly costly issues occur they need to deal with. At least with the full one year warranty they don’t have to worry about some minimal time limit to file a claim.

With the 1-year warranty, if they file a claim on that and go to renew it in 1 year, the premium is going to be higher, much higher depending on the claim. The claim on the 1-year warranty also will go on the property’s record. Such wasn’t the case when I was offering the 90-day warranty. Not sure about now, though. Something to check on.

@escanlan

If a Home Inspector properly performs their job there are relatively few issues that they can be blamed for unless they actually did miss the issue. If the Inspector misses it that’s what their Errors & Omissions insurance is there for and they should be carrying E&O if they are serious about their job.

I’m a firm believer in E&O insurance. However, the 90-day warranty I offered didn’t care whether or not the home inspector missed something, or it wasn’t visible or accessible. Not sure about now, though. Something to check on.
Additionally, if I missed something and filed a claim on my E&O policy, when I went to renew it, I could be dropped or have my premiums skyrocket.
Again, the most useful thing I found about the 90-day warranty that I offered is that a claim against it did not affect my E&O premiums, did not affect the new homeowner’s home insurance premiums, and did not adversely affect the property for future owners.

@escanlan

Some of these 90 Day warranties only cover items confirmed to be in good working order at time of inspection. Since you were unable to confirm then this particular example would not be covered.

One of the thing I like about the 90-day warranty that Nathan’s company offers is that what you say is not true. I do believe his is the best in the industry.

@escanlan

Some of these 90 Day warranties don’t cover water damage or items that are inaccessible without the removal of drywall, concrete, or other permanently installed covering. I can’t see how “clearing” a clog (snaking a line) could cost $12,000.00 unless the repairs required removing those permanently installed coverings?

This particular residence did not have a dishwasher, and since the only bathroom was not accessible, my plumbing/sewer testing involved running a sink full of water. That’s not going to cut it. By the time the plumbing company had analyzed everything, videoscoping the laterals etc., yep, it was an expensive operation that tore up their only bathroom and made their house unlivable for a couple of weeks, and tore up their yard replacing the badly deteriorated and root-blocked cast iron laterals.

@escanlan

Some of these 90 Day warranties also only cover items that have been maintained as per the manufacturer’s requirements or other reasonable standards. Since those were not maintained they would not be covered.

The key phrase there is “some of these 90-day warranties.” As with anything, shop around. Heck, that’s what people do when they are wanting to hire a home inspector.

@escanlan

Some of those 90 day warranties do not cover plumbing stoppages of any kind no matter how they are caused. They also don’t cover neglect so this would not have been covered.

There’s that key phrase again. Shop around. In my example, deterioration of cast iron sewer pipes that were 80 years old probably doesn’t fall under neglect.
I also saw several examples with Nathan’s policy where plumbing stoppages were covered. Again, I do think Nathan’s policy is the best in the industry, but shop around. (Suddenly this morning I keep singing The Captain & Tennille’s “Shop Around.”)

@escanlan

Some of those 90 day warranties limit any pay outs to way less than $12,000. After all the warranty provider sells them to Inspectors for only $5.00 or $10 and if they can’t make their money off selling them other stuff, like alarm systems, it would be a significant loss to them to pay out a lot of high dollar claims.

There’s that beautiful phrase again.
It was a significant loss, but the law of averages says that this isn’t going to happen often because of the time frame for these policies.

@escanlan

The policy increase scheme you’re speaking of is homeowner’s insurance and not warranties since even the full one year and more warranties typically cap coverage’s anyhow to some life time limit for the length that particular owner has the home. Also since the warranties all typically depreciate system values over time they tend to pay less and most typically won’t pay anything on some systems over 10 years old anyhow.

Exactly why comparing homeowner’s insurance with 90-day home warranties is like comparing apples to cats. It shouldn’t be done, but people continue to do it.
It was Ian’s comment—“In my area, every agent negotiates for their buyer a 1 year warranty. Why do the agents [job] for them when they’re already going to do their job anyway?”—that caused me to comment. Otherwise I would have had a margarita, fed the cat, done some work on House Key News, and gone to bed.

@escanlan

These one year home warranties are there to help the new owner handle issues that come up when they least expect it. Yes it isn’t worth even making a claim on one for an issue they can cheaply repair themselves but many home owners don’t know what it takes to repair something and are concerned about a large bill if they try to repair it or have to call someone in. It is ignorant for a homeowner not to exercise their one year warranty and try to save it for some big thing that might not ever happen. After all the cost of the one year warranty is small compared to the cost of what might need to be repaired.

I totally agree with you, but we both know there are a lot of ignorant homeowners (and other people, too). One also needs to define “big” for one’s own life and circumstances. Too many claims on a 1-year insurance policy will affect the future salability/insurability of the policy. Too many claims on a 90-day warranty does not have that effect.

@escanlan

Do you have a copy of The HomeTeam Inspection Service current 90 day warranty they are offering if they are still offering it? It would be interesting to see and compare it against some of the other 90 day warranties being offered.

My HomeTeam franchise expired June 30, 2006. Ten years ago. So, no, I don’t have a copy of any warranties that they might still be offering.

@escanlan

BTW military members don’t “skipped the country” unless their term of service is up and they voluntarily leave or they go AWOL (Absent Without Leave) which we know is a crime. Otherwise military members are reassigned and have little choice on departure times and next duty station. Also it is so much easier to pin down a military member than a civilian if they do something nefarious and try to leave it behind them. All the civilian has to do is contact the military Judge Advocate General (JAG) who can reach around the world very easily to punish a military member and force recompense to the civilian if deemed appropriate.

In retrospect I should have put quotes around “skipped the country” since that term was used by my Clients. As a military brat myself (dad was in the Air Force during the Korean War), and as a graduate of Texas A&M University (puts more officers into the armed forces than all but the military academies), and as a resident of San Diego County (the Pentagon reported several years ago that there are more U.S. active duty and retired military personal in this county than any other county in the United States, I’m pretty partial to the military, so much so that I offered discounts on my services to military (active, retired, or reserve), teachers, LGBTQ community, fire fighters, and police officers.

[jbraun (James E. Braun, CMI)]

@jfrederick

Do warranties cover older appliances, such as, but not limited to, a 17 yr. old water heater?

No, they have the same restrictions as a full home warranty.

[jbraun (James E. Braun, CMI)]

My advice on home warranties is you get what you pay for.

[jfrederick (Joshua Frederick)]

@jbraun

My advice on home warranties is you get what you pay for.

and to read the fine print. Twice.

[jbraun (James E. Braun, CMI)]

That why a like AHW. One page warranty, easy to read. And they pay out better than most.

[rray (Russel Ray)]

@jbraun

No, they have the same restrictions as a full home warranty.

Not necessarily true. Shop around.

[rray (Russel Ray)]

@jbraun

That why a like AHW. One page warranty, easy to read. And they pay out better than most.

American Home Warranty! That’s who we had as HomeTeam franchises. I was trying my darndest to remember its name. I think they charged most home inspectors something like $14 for the 90-day warranty but since there were 537 HomeTeam franchises doing tens of thousands of inspections a year, we got ours for $5.

[escanlan (Emmanuel Scanlan, TREC# 7593)]

@jbraun

My advice on home warranties is you get what you pay for.

Which usually isn’t much but at least with a full one year warranty you get one year of false security while the 90 day wonders end as quick as they’re issued.