Real Estate Round-Up: W is for warranty

Wouldn’t it be great if there was a warranty on everything in life? I for one, would love a warranty on health, or relationships. I suppose one could say that generally we all have a warranty on health. The warranty just runs out at different times for every individual. The warranty on health could be deemed to be invalid if an individual intentionally does things to undermine their health. A warranty on relationships would be awesome if it meant that a service could be provided to reset or repair a non-working relationship. Imagine being able to plug the parties into a machine that would recalibrate things to get us back on the right track? This would be fantastic. I’d pay for both warranties.

In real estate, most times, when a buyer completes a purchase agreement, it includes a request for the seller to purchase and provide a one-year home warranty on the property. Over the years, home warranties have increased in cost and coverage. Despite the increase in cost, the increase in the items that are covered by the provided home warranty are more than worth the increased cost of the warranty.

Home warranties come in various shapes and sizes. There is a warranty for single family detached homes, for single family attached homes, for duplex, triplex, fourplex, and new construction. The level of coverage begins with a standard plan. This type of coverage would cover basic plumbing and electrical systems, garage door openers and ceiling fans, built-in appliances, and limited pest protection. That doesn’t include termites, fungus, or dry rot.

The most complete and expensive coverage is referred to as “enhanced plus or upgrade plus.” This level of coverage includes most everything including the kitchen sink, literally. This type of advanced coverage includes air conditioning, smart home options, washer/dryer/refrigerator, water softener/filtration, limited slab leak and external pipe leak coverage, sewer lines due to roots, and code violations to name a few of the additional items.

There are many companies that provide warranties on homes, so the coverage and cost vary based on the provider. Despite these subtle differences, all companies provide a very similar product and competitive pricing. There is however, one thing that can make the warranty work more efficiently and it is the sales representative of the home warranty company that the Realtor has a relationship with. That sales representative can serve as an intermediary between the client and the home warranty company if things become challenging.

Let me explain what I mean. Suppose you have a problem with your heater. You call the home warranty company’s 800 number or go online and place your claim. The warranty company has the HVAC contractor contact you to inspect the heater. They inspect it and provide you with a report with a work order, the only problem is that to do the work, they will also have to evaluate all your duct work and make any modifications to that and to the unit to bring it up to today’s code. Suddenly, that easy repair becomes a big repair and unless you have coverage for code upgrades, the only thing covered will be the repair of the unit and not the other additional requirements to the duct work and the unit. That $75 deductible, balloons into a $5,000 expense.

This actually happened to a client of ours last year. The client was justifiably distraught. They thought that having a home warranty was going to fix anything that broke, the first year they owned the home. I contacted the representative I work with to discuss the situation with her. She investigated the work order and reported back that what the owner had been told was one of the ways the warranty company would resolve the issue. She also offered up a second solution where the warranty company would provide the owner with a cash out so the owner would become responsible for the repair.

The owner contacted an HVAC contractor we recommended, who inspected the heater and described how he could repair the unit and provided an estimate of cost to do the repairs. Knowing this information allowed me to go back to the representative to find out how much they would cash out so the owner could handle it on their own. Suffice it to say, the cash out more than paid for the needed repairs, so the owner chose the cash out option, and put the remaining funds aside for any other repairs in the future. This resolution was a big win for the owner.

Home Warranty companies are skilled at trying to repair the problem as many times as possible rather than provide a full replacement when a claim is made. They will choose to repair, and repair, and repair, over replace. Most times, for the client with the claim, that is just not practical. If I have reason to believe that the client is getting the runaround, or if the client believes they are getting the runaround, I step in and communicate with the sales representative of the home warranty company.

This is just one more reason why you should work with an experienced Realtor who has excellent relationships with the home warranty sales representative. This same relationship connection applies to all service providers involved in a real estate transaction.

Experienced Realtors have relationships with trusted service providers. And even though they have no guarantee over the outcome, an experienced Realtor will have a strong influence over the process. No matter how much things keep moving toward “make it easy and fast through online everything,” the fact is, people working with people can make seemingly impossible problems find resolution.

Warranties that cover real estate, personal property items, or any of the myriad of dynamics within a real estate transaction are safe to say, only as good as the Realtor you choose to work with. Choose experience, integrity, professionalism, and relationship and you will be surrounded by unspoken warranties that will make your transaction have a good outcome.

Kim Murphy can be reached at [email protected] or 760-415-9292 or at 130 N Main Avenue, in Fallbrook. Her broker license is #01229921, and she is on the board of directors for the California Association of Realtors.