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  1. #1
    imported_John Smith's Avatar
    imported_John Smith Guest

    Default Home Warranty - Consumers being misled

    Did an inspection for a client yesterday. The AC unit on the home seemed to be on its last leg, might make it through this year, doubtful if it would last much longer. Not cooling real well. Condensing unit looked really rough. When I was discussing it with the client, she said "thats okay, I am getting a home warranty in the deal". I thought about it for a minute, and considered explaining to her how the home warranty business works, but I new I should remain somewhat neutral and just report on what I saw, what the problems were, and leave it alone. What do you think is the best way to handle this situation?

    I dont know for sure that the agent suggested warranty would pick up the tab on a new AC system, but I got the feeling that she was given some bad information from someone.

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  2. #2
    James Duffin's Avatar
    James Duffin Guest

    Default Re: Home Warranty - Consumers being misled

    If I know a buyer is getting a home warranty I suggest that they get a HVAC contractor that works for the warranty company to do a service call on the unit before closing. This usually cost around a $100. From this point on the warranty company can not dispute a claim since one of their own blessed it. This has helped with numerous claims for my customers.


  3. #3
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    Default Re: Home Warranty - Consumers being misled

    Quote Originally Posted by imported_John Smith View Post
    Did an inspection for a client yesterday. The AC unit on the home seemed to be on its last leg, might make it through this year, doubtful if it would last much longer. Not cooling real well. Condensing unit looked really rough. When I was discussing it with the client, she said "thats okay, I am getting a home warranty in the deal". I thought about it for a minute, and considered explaining to her how the home warranty business works, but I new I should remain somewhat neutral and just report on what I saw, what the problems were, and leave it alone. What do you think is the best way to handle this situation?

    I dont know for sure that the agent suggested warranty would pick up the tab on a new AC system, but I got the feeling that she was given some bad information from someone.
    I hear this all the time and I try to find a moment to give the client a "heads-up" and urge reading the fine print without actually accusing the agent of anything.


  4. #4
    James Duffin's Avatar
    James Duffin Guest

    Default Re: Home Warranty - Consumers being misled

    I have never had a previous client file a claim and not get the item repaired or replaced. I have no vested interest so I have not reason to lie. It seems to me that the main reason they refuse to pay is lack of proof that it worked at the time of closing. A HI can help with this documentation IMHO. I inspected a house last week that had a condensing unit that had a minimum circuit ampacity of 16.3 amps and was wired with #14 wire. If this is not corrected the warranty company would not pay a claim due to the fact it was not wired properly. I have been to bat for clients to help with claims. All you need is you ducks in a row to be able to help.


  5. #5
    Join Date
    Mar 2007
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    Myrtle Beach, South Carolina
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    Default Re: Home Warranty - Consumers being misled

    I had an agent tell my client, in front of me, that when he purchased his home, he had the seller give him a price cut to reflect the cost of a new HVAC unit.
    After he moved in, he placed a claim for replacement of a faulty unit and had it replaced minus the $50 deductible.
    Basically stating that he had performrd fraud on the Home Warranty co.
    He was trying to sell my client a Home Warranty policy.

    My client looked at me, I looked at him, and later, when out of earshot of the agent, My client said to me "I wonder how bad he's trying to screw me" "good thing I've got you here".

    For other reasons, like an un-permitted conversion of a garage into a "Mother-in-law suite", the deal fell through.

    Critical Home Inspection Services
    www.Home2Spec.com

  6. #6
    Russel Ray's Avatar
    Russel Ray Guest

    Default Re: Home Warranty - Consumers being misled

    Insurance fraud is not something that I would want to be associated with. As a "home inspector," I just did home inspections. As a "property consultant," I can do soooooooooo much more.


  7. #7
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    Default Re: Home Warranty - Consumers being misled

    Quote Originally Posted by James Duffin View Post
    If I know a buyer is getting a home warranty I suggest that they get a HVAC contractor that works for the warranty company to do a service call on the unit before closing. This usually cost around a $100. From this point on the warranty company can not dispute a claim since one of their own blessed it. This has helped with numerous claims for my customers.
    Very good recommendation....

    We know why you fly: because the bus is too expensive and the railroad has a dress code...
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  8. #8
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    Default Re: Home Warranty - Consumers being misled

    I'm very suspicious of ANY warranty for anything ever. (I know jaded consumer). I love reading disclaimers and such to find the loopholes. The more someone pushes the quality of a warranty the less I believe. Warranties are generally not written to favor the consumer. Warranties are written to favor the provider while making the consumer feel good with a false sense of security.
    Like many of you (probably) I've gotten mailers from the 'home warranty' companies offering to sign me up so I can provide it as a service to my clients. I look it over and throw it away.
    I suggest to clients that they read the warranty fully (fine print) to really understand what they might be getting and have their attorney look over it before signing up. If it is being thrown in the deal for 'free', I still tell them to look it over carefully so their expectations aren't too high.
    The one year home warranties are pretty common around here for new constr. condo's and some of the larger $ homes. They are popping up more lately on regular homes but not a standard item to any extent yet.

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  9. #9
    Russel Ray's Avatar
    Russel Ray Guest

    Default Re: Home Warranty - Consumers being misled

    Quote Originally Posted by Markus Keller View Post
    I love reading disclaimers and such to find the loopholes. The more someone pushes the quality of a warranty the less I believe. Warranties are generally not written to favor the consumer. Warranties are written to favor the provider while making the consumer feel good with a false sense of security.
    That could be rewritten about home inspection contracts:

    Quote
    I love reading disclaimers and such to find the loopholes. The more someone pushes the quality of a home inspection the less I believe. Home inspection contracts are generally not written to favor the consumer. Home inspection contracts are written to favor the provider while making the consumer feel good with a false sense of security.
    Unquote

    There are disclaimers in every industry:

    When I bought a property and the bank needed verification of my self-employed income, my CPA had me sign a disclaimer/waiver.

    When I had surgery, the surgeon had me sign a disclaimer/waiver.

    When the roofing contractor comes each year to look at my roof, he has me sign a disclaimer/waiver. In fact, when anyone comes to work on my property, the first thing they do after setting foot on my property is to have me sign a work order and disclaimer/waiver.

    When I buy new software, I have to agree to the disclaimer/waiver before I can install it.

    In any industry, read the fine print and choose the service provider that has the fewest disclaimers/waivers.


  10. #10
    imported_John Smith's Avatar
    imported_John Smith Guest

    Default Re: Home Warranty - Consumers being misled

    Many years ago when I bought my home, the sellers included a 1 year warranty. About 1 month after I moved in (September in Houston = HOT), the AC quit working on a Thursday. I called the warranty company who said they would send someone out the following Tuesday. The AC contractor showed up on Tuesday and replaced the fan on the condensing unit. They did a crappy job, and I think I had to pay $100 dollars. They warranty company wasnt going to pay for the fan, but after about a month of phone calls and letters they finally did.

    For someone to think they would get an entirely new AC system because the one on the house they were buying was about 20 years old, is ridiculous. I sure hope they talked with someone or did more research into it before the purchase of the home. Id hate to think this lady would have her AC break down after she moves in and have to pay major $$$ for a new system. I guess I did all I am supposed to do by reporting what I found.


  11. #11
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    Default Re: Home Warranty - Consumers being misled

    I include this at the end of every report;

    As suggested in the general information area, you should consider obtaining a home warranty (one may already exist on this property). These programs could help protect you against unforeseen problems. Please read the warranty coverage carefully; usually a waiting period is required before you obtain coverage and some items that you think are included may not be. For instance, if you put in a claim for say, a non-working oven, and it is determine that this problem was pre-existing, you wouldn't be covered. So please, read the warranty carefully.

    Darren www.aboutthehouseinspections.com
    'Whizzing & pasting & pooting through the day (Ronnie helping Kenny helping burn his poots away!) (FZ)

  12. #12
    imported_John Smith's Avatar
    imported_John Smith Guest

    Default Re: Home Warranty - Consumers being misled

    Has anyone ever heard of a warranty company replacing an entire AC system? That would be like an insurance company replacing an entire roof because a few shingles blew off. It isnt going to happen.


  13. #13
    Russel Ray's Avatar
    Russel Ray Guest

    Default Re: Home Warranty - Consumers being misled

    Quote Originally Posted by imported_John Smith View Post
    Has anyone ever heard of a warranty company replacing an entire AC system?
    Yes, for one of my Clients back in 2002.


  14. #14
    James Duffin's Avatar
    James Duffin Guest

    Default Re: Home Warranty - Consumers being misled

    I've had customers where the gas furnace and outside unit was replaced after it could no longer be fixed. I've met the warranty company rep and so far they have been fair with the folks I know. Your mileage may vary.


  15. #15
    imported_John Smith's Avatar
    imported_John Smith Guest

    Default Re: Home Warranty - Consumers being misled

    Maybe I was wrong. I can only communicate my personal experience and what I have heard from others involved in home warranties. I do like the idea of having the client contact the warranty company and find out who they use, then getting them to give an evaluation prior to closing. I believe in Houston, the warranty companies have a lot of vendors to choose from, so I don't know if you would be able to pick one to look at the equipment.


  16. #16
    James Duffin's Avatar
    James Duffin Guest

    Default Re: Home Warranty - Consumers being misled

    My clients (or their agent) have called the warranty company and asked for a list of approved HVAC companies. The list has always been provided freely. Kinda like most auto insurance companies have approved body shops for repairs.


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