What to watch for when selecting a home warranty company
What is a home warranty?
Home
warranty companies
also called residential service companies
provide warranty policies to existing home
owners, new home buyers, home sellers, real estate agents and title
companies to protect the purchaser or home owner from unexpected
home appliance repairs or some other repairs that are not covered
under home insurance policy such as plumbing, etc with some
restrictions and limitations. Some Home Warranty companies
Offer other services outside of home warranty as a bonus such as
concierge service in which they go through the hassle of connecting
utilities (water, electricity, gas, telephone, TV cables, Internet)
for the home Buyer free of charge.
Great assurance for the home purchasers:
Most of the home warranty companies cover pre-existing conditions if
the owner was not aware of the problem or had no way to know about
it. This is a great assurance, especially for the purchasers of a
home, because they never lived in that house before, therefore they
are not aware of any problems and hence if there is a problem found
it is covered under the home warranty insurance policy.
Most Home Sellers pay for a residential service contract (home
warranty). In Texas, the Buyers get to choose the home warranty
company when they close the deal. Ask your REALTOR® to negotiate
this for you!
How much does it cost?
Depending on the service plan and coverage, in Texas, could be any
amount from $370/year to around $700/year. Each service call is the
responsibility of the home owner which is around $60-$70 per call.
What to
watch for when you are selecting a home warranty company?
They all almost have the same price list, could be a couple of
$dollars different. Therefore, the price is not really the decision
factor. However, true customer service and fulfilling their
obligations in a timely manner should be the main reason for
selecting a home warranty. The best way is to ask friends,
colleges, relatives and even contact BBB about their experiences
with their home warranty companies.
In
summary, following is my list of criteria to watch:
1.
True
Customer service, timely response and act quickly:
This is a
very important factor of decision maker to choose the right Home
warranty company. Almost all 800 number customer services are the
same in this criteria.
However, all
sales and marketing staffs claim they are available for us and our
clients 24/7 to answer their questions and get back to customers
immediately or in a timely manner, that is not true in real world.
Personally, I had two extreme good and bad cases with account
executives & Representatives (Not the 800 number customer service).
The bad one took 4 days to get back with me with a bad attitude
after calling, leaving messages and sending emails several times. But my extreme good
experience was the time I called the account representative she was
driving and I didn’t want to talk while she was driving and offered
that I call back later and disconnect the phone. But, without my
knowledge and expectation, she had pulled-over, stop driving and
calling me back immediately.
2.
Contractors they use and how they pay them
Who home
warranty contractors are and how well they pay & treat them is very
important. The home warranty companies pay their contractors based
on a discounted negotiated price which is much less than the regular
price. The less the contractors are paid by home warranty, the more
home owners pay from their pocket. Because, in this case, the
contractors usually are coming up with some stories or problems that
the problem becomes not fully covered by the home warranty and
therefore they want the home owner pays the full price for uncovered
items which is good for the contractors but bad for home owners.
3.
Some
other factors that could affect your decision on selecting a home
warranty company:
a.
Price and coverage, disclaimers and items not covered,
payment plan, cancelation policy, etc…
b.
How long they have been in business and whether or not they
have been reputable or been reported for issues to BBB or friends,
etc.
c.
Local vs. out of town or out of state companies.
Please
share any Inputs or comments from your experience with home warranty
companies here.
Contact us about your Real Estate
Questions
| 
