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What is a Home Inspection?
REALTOR's client was left without heat for 4 months by HSA Home Warranty, so RWS Fixed it.  XML
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Nathan
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Joined: 06/17/2014 09:32 PM EDT
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Location: Carmel, IN
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Here's a news article and corresponding televised broadcast from local news station FOX 59 (My home town news channel). A few months ago I saw a preview of this piece and decided I had to watch it. I was thinking initially, "Okay, there's more to that story" and "Here we go again, another "investigative reporter" getting it wrong" as I watched the hyped up previews.

Still, I watched with an open mind and I'm glad I did because Jill Glavan, reporter with FOX 59, got it right for the most part. Which isn't exactly easy to do when you don't work in the real estate business every single day as many of us do, when you don't have experience in home repair as many of us here in this forum do (I'm being presumptuous there, guilty!), or when you don't know a very niche industry like home warranty for years in order to understand the ins and outs. If I were her teacher she would be getting a 99% on this paper and that's pretty damn good. Here's the piece so you can read it for yourself:

http://fox59.com/2018/01/05/family-without-heat-says-home-warranty-company-hired-f-rated-contractor/


Here's what Jill Glavan got totally right: This family was forced out of their home after living in cold temperatures for 4 months while awaiting a proper repair and diagnosis from HSA Home Warranty (now a part of American Home Shield). Both HSA Home Warranty and the contractor were non-responsive. They were patient until the day their health and home were both at extreme risk.



Now here's the part that neither Jill nor the Conner family knew:

HSA Home Warranty has a promotional deal with the brokerage that sold her the house, and even though the agents at this chain of offices have every right to choose any warranty to offer their clients individually (and the experienced ones there generally choose RWS), the brokerage itself limits access to companies that have superior coverage and offerings to that of HSA and its parent company American Home Shield with two basic motivations: 1. Promotional consideration and a contract (money) from HSA/AHS and 2. Their clients being taken great care of by having a "preferred" status.

As to the #1 motivation, there's no inherent issue with such and I personally have no issue with it so long as the #2 motivation of taking great care of clients is fulfilled and I myself sponsor REALTOR functions and offices throughout the U.S. and Canada with those same motivations - but I only do so when I can deliver greater client care. When that doesn't prevail, it's not just a failure on the part of the companies involved-- it's damaging to the real estate process and deceptive to the participants in it (Buyers and Sellers) whom we (The Real Estate Industry) are all here to protect. Not to mention a great way to sour warranties and real estate agents/brokers in general in the view of the public (between that and the heartbreaking aspect of the story we decided to fix this issue ourselves at our expense...see below).

What Jill didn't know and couldn't have known is that the contractor involved probably wasn't a bad guy and probably did a fine job of repairing furnaces themselves. I'd go so far as to say there is a possibility that the F rating noted for this contractor with the BBB wasn't entirely deserved. I say this because the contractor was set up for failure and the client too- by the systems of American Home Shield. These AHS and HSA failed contractor systems and arrangements created a 4 month problem for a family in Elwood that myself and my staff here at Residential Warranty Services had diagnosed and fixed within days of this broadcast at a cost of a only a few hundred bucks. It's complicated to explain why such a simple and inexpensive issue would be so difficult for American Home Shield or HSA to deal with and most will probably be disgusted with the process, so I'll try to make it simple:

- American Home Shield contracts with contractors like the one in this piece for a standard rate for repairs. For a HVAC company, we're probably talking in the $200-$250 rate per repair.
- For that fee, the Contractor is responsible to repair the issue in full. In other words, if there is a $500 part and 3 hours worth of labor required to repair the issue, and it's covered by the policy, then the Contractor would lose money that day.
- Under this program, AHS/HSA gets to put all of their risk on a policy they collected premiums for on the local contractor.
- It is unknown how many of their contractors are on this program, and nearly impossible to determine as each contractor has signed a strict non-disclosure with American home Shield.
- Contractors are encouraged to upsell to clients under this program. They have to in order to turn a profit, resulting in situations like this.


So here's the punch line: There was no HVAC issue at this home. This was obvious to us within 25 minutes of this broadcast when we looked up the homeowner and got in touch with her. It was an electrical issue and likely always was. (See invoice below)

What should you do as a Buyer, Seller, or Agent to avoid this issue?


For Buyers.

If you're looking for an agent that knows their stuff, they're probably offering home warranties from Residential Warranty Services. See the comparison sheet below for just a sample of why the agents doing tens of millions in sales and have been doing it for decades choose us - but that's not to say an agent that doesn't use our warranties is bad, they may be great and they may have a great reason for offering a particular warranty. Ask them, and here's what you're looking for: If their response is "Our office uses X warranty" don't walk...RUN! Home warranties are a great litmus test for an agent to determine if they're putting any work into what they do and protecting your interest. If they're just using who they were told to use and didn't ask questions, that's a bad sign, even if that warranty is mine!

For Sellers.

Same goes on the litmus test above, but look at the comparison sheet below (particularly as it pertains to price). When you're selling a house, you're looking to maximize what you get out of the deal in any way possible. Here's another great litmus test: 80-90% of homes sold get a warranty, and it was as simple as searching the fewer than a dozen nationwide home warranty companies in order to save you (and all clients) $40-$200 at closing. If they didn't do this, or don't have a great reason for choosing the provider they did, this is a great reason to seek another agent to list your home with.

For Agents.

The two most important lessons here are to do your homework on providers and to make sure to be responsive to your clients and let them know that you can be reached after closing if they have an issue. The agent and office on this deal, both of whom shall remain nameless, were blessed by the News Gods the day that Jill Glavan decided not to dig deeper and to keep the story simple. Imagine if she had focused on the Broker instead of the "F Rated Contractor". "Broker gets huge fees from warranty company that leaves client without heat for 4 months" - that could have been the headline. "Agent who isn't attentive to clients nearly causes pneumonia for young children" - that could have been the headline as well. Reputation is second in importance only to taking care of clients, and neither were any concern for the parties in this case. If that isn't enough reason for you to reevaluate your vendor relationships, you should check out http://www.ZeroDeductibleforBrokers.com or maybe read the free online book http://www.TheSavvyAgent.net



See below: Invoice for the work paid for by RWS, The review China Conner left for us afterwords, and a Comparison Sheet of coverages as noted above.

http://www.ResidentialWarrantyServices.com is where to order the SIMPLE policy noted below.

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This message was edited 2 times. Last update was at 03/27/2018 01:38 PM EDT


P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
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www.RWSwarranty.com
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www.RecallChek.com
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www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
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Dom D'Agostino
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Joined: 12/08/2014 01:25 PM EST
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Location: Orlando, FL
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So the client (a homeowner that should mitigate any damages or defects, even if insured) could have brought in a skilled technician at any time to fix the issue, for the same cost as an annual home warranty, but instead "had no heat" for months.

Pretty sure that's a little there is more to the story.

Dom.
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5244
Location: Carmel, IN
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Dom D'Agostino wrote:So the client (a homeowner that should mitigate any damages or defects, even if insured) could have brought in a skilled technician at any time to fix the issue, for the same cost as an annual home warranty, but instead "had no heat" for months.

Pretty sure that's a little there is more to the story.

Dom.


Incorrect completely.

The homeowner had a warranty provided at closing, they had a heating problem and were told erroneously by the contractor hired by said warranty company (and American Home Shield) that they had to pay $1700 to fix their issue and they had no reason to believe that this wasn't the case. It should be noted that this is a lot of money for some and it wouldn't have corrected the issue anyhow.

Not everyone can mitigate damages like you or I or even understand what that means really. (Some can't afford it either)

This message was edited 2 times. Last update was at 03/27/2018 06:26 PM EDT


P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
[Email] [WWW]
Dom D'Agostino
Wizard

Joined: 12/08/2014 01:25 PM EST
Messages: 161
Location: Orlando, FL
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I think you are reacting defensively.

I wasn't slamming anyone, but people can get 2nd opinions or do some research, even if they have a warranty.
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5244
Location: Carmel, IN
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Dom D'Agostino wrote:I think you are reacting defensively.

I wasn't slamming anyone, but people can get 2nd opinions or do some research, even if they have a warranty.


I totally agree, and not trying to be defensive of myself, but rather of the client as they were presented with a contract that said they couldn’t use a non-authorized contractor.

Of course you or I would have said screw this, we’ll get it done and work it out later- I want to tread lightly here when I say this but I am not sure the financial ability was there and I’m positive the knowledge was not.

P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
[Email] [WWW]
RobertAllen
Alien

Joined: 10/06/2018 05:28 AM EDT
Messages: 2
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I too agree.
 
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