The Good, the Bad, and the Ugly Maryann Azambuja, Choice Home Warranty

What is a home warranty? Pays towards the repair or replacement of any covered appliance or home system that malfunctions under normal conditions of use. A service contract that helps protect home owners against the cost of unexpected covered repairs of their major systems and appliances that break down due to normal wear and tear. A one year service agreement that covers the repair or replacement of any major home system components and appliances that typically break down over time due to normal wear and tear.

What does a home warranty cover? Think Peach Plumbing Electric Appliances Cooling Heating

Why ask for one??

What a home warranty is NOT! Does NOT cover for anything structural…only Mechanicals! Cracked windows Dips in Flooring Secondary damage NOT a builder’s Warranty Does NOT cover foundation.

Home Warranty Trends. . . Average usage across the country. . . Average usage in the state. . . Do you use warranties in your business?

Difference between home warranty and home Insurance…KNOW IT! Home Warranty and Home Insurance do not cover the same things. Home Insurance covers damage from natural disasters, flooding, and burglaries. Home Warranties cover failed mechanical systems and appliances.

Who can get a home warranty? Your Seller Your Buyer Any old home owner Check the company you are using! Some offer it, some don’t. Most of the time it’s FREE!!! HVAC is an additional $$. Make sure your clients know this! Check time limit on coverage…180 days up to one year! Limited during the listing period…MUST BE LISTED! Is it RISK FREE for your seller? Some companies make you pay for it! Most start on the date of closing with no waiting period. Make sure you are looking to see if coverage begins immediately! Offered by some companies Some increase in price…some don’t Most times there is a 30 day waiting period—protects all parties!

WHO PAYS? SELLER BUYER RE AGENT TITLE COMPANY

ON YOUR PURCHASE AGREEMENT…HOW TO WRITE IT FOR HOME WARRANTY

WHAT DOES YOUR CLOSING DISCLOSURE (HUD) LOOK LIKE?

Benefits to the Seller Marketing: Homes with a home warranty included sell on average 50% faster than homes without—National Home Warranty Association Covered during listing period—you can be the hero! Also helps to win listings…FSBO’s cannot get a free warranty during listing period. Avoid Post-Sale Disputes

When to offer to Seller. . . Discuss need for disclosure of existing defects. Property disclosure + home warranty = less after sale headaches! Help with home inspection repairs No fee paid if home does not sell!

Benefits to your Buyer Peace of mind Helps toward the cost of untimely repairs Don’t pay retail Vendor provided with most home warranty companies

How are Contractors Hired? Most hw companies hire low for more profit margin! Uber dispatch system Service fee paid if no services rendered 2nd opinions Follow up surveys.

Cost Costs range from $370-$800. Be careful with lesser amount…most of the time will exclude Fridge and W/D Consider Add-on’s

Homes over 5000 square ft Look at your contract or ask your rep. This is the industry standard for the cutoff and most companies will increase drastically over 5000 square feet!

How it works… If something should break down, make sure your client knows to call the home warranty company first!!! Vendor comes out Trade Call Fee is paid Vendor calls in diagnosis Level of coverage is applied

Trade Call Fee Deductible Check your brochure to see how much your clients will be paying!

Quiz   1.  True or False:  a home warranty is just like insurance.  2.  True or False:  Pre-existing condition coverage is included in most home warranty companies.  3. Home warranty will cover for which of the following: ​A.  Cracked windows  ​B.  Dips in flooring  ​C.   Roof replacement ​D.  None of the above  4. What line of the purchase agreement is the home warranty on?   5.  What does PEACH stand for?

BREAK-10 minutes Jumping Jacks, Sit up’s, coffee…just don’t fall asleep

Part 2 Home Warranty broken down by Mechanical Systems

Do you need an inspection? Most companies say no. However…if we ask for inspection to verify that things were in proper working order and your home owner doesn’t have one, it could open them up for a denial!!! #badnews

Components of every home warranty policy. . . Limits of Liability. . . What a warranty does and does not cover How to Place a Claim Dates of coverage How to cancel a policy

Providing Service. . . Realistic Expectations Must CALL warranty co FIRST! Emergency Service Warranty does NOT COVER EVERYTHING!

CFPB and Home Warranties. . . In 2010 Hud says H.W. companies are a settlement service and are regulated by RESPA. No “per transaction” Kick backs! In 2014 the House of Representatives pass HR 24, says warranty companies ARE NOT a settlement service! But yet to pass in Senate or be signed off on by President! Most Lobbyist say HW will be settlement service indefinitely! So paying a kick back is ILLEGAL!

Benefits for AGENTS. . . Greater client confidence Service notifications E and O discounts! Way to follow up with your clients. . .HAVE them call me for discounts and best service!

Open House Feedback forms Online marketing portal Marketing tools. . . Sign riders Tent cards Open House Feedback forms Online marketing portal

Your Home Warranty Resource Maryann Azambuja 865.248.9921 maryann@choicehomewarranty.com