Today we talk with American Home Shield Warranty expert Kristee Golan about home warranties, coverage & how they can be beneficial. Can having this warranty help offset the cost of a major furnace repair? Yes. Listen for more details.

Jon Lafferty:
Hey everybody. Welcome to Avoiding Real Estate Turbulence podcast. This is your pilot, Jon Lafferty with Century 21 Town & Country.

Tony Abate:
And this is Tony Abate with Ross Mortgage and we are your real estate pilots. Our job is to be a real estate advocate and also to make sure you’re educated about the buying and selling process. We’ll keep you informed throughout until we get you safely closed.

Jon Lafferty:
Today we are going to talk home warranties with local expert Kristee Golan of American Home Shield. Welcome Kristee.

Kristee Golan:
Thank you. Thanks for having me.

Tony Abate:
Hi Kristee.

Jon Lafferty:
Glad to have you. So tell us a little bit about home warranties. How they work and how they can be of a benefit to somebody who may be purchasing a home or thinking about selling a home.

Kristee Golan:
Absolutely. Well, a home warranty is a one year service agreement that clients can sign up for, which protects their major systems and appliances in their home for normal breakdowns that’ll happen due to normal wear and tear. With us, we really talk about warranty as a benefit to the client in terms of that budget protection and really ensuring that they have that peace of mind down the road. Especially with first time home buyers really looking at the amount of money that they’re putting into the home upfront and not having that expense down the line and having that peace of mind with a home warranty. So that’s really the budget and the peace of mind is the number one.

Jon Lafferty:
Well, Tony didn’t we talk about that back, I want to say maybe a five or six podcasts ago, we were talking about one of the major things that buyers didn’t anticipate when they purchased their home or maintenance and repair costs. They were way more than they anticipated. I think this goes exactly to that. It’s peace of mind so that you don’t have to worry if the furnace quits on you, you’re not going to spend $500 or a $1,000 to get it back up and running.

Kristee Golan:
Right. Absolutely. Home warranty doesn’t cover everything out there. I mean, really gives that, that buffer for those large expenses that’ll happen down the road when you’re talking about your HVAC giving out or your water heater giving out. Really giving that peace of mind to know that they’re protected to have that coverage.

Tony Abate:
Yeah, we did talk about that. I’m sorry. Our industry is partially blamed. One of the things we do is we get folks so laser focused on the money needed for a down payment, money needed for closing costs and that check that they’re bringing to the closing that all those other very real things they kind of lose focus on that. And next thing you know that home buyer is purchasing that unexpected water heater or furnace repair or whatever.

Jon Lafferty:
Mm-hmm (affirmative).

Kristee Golan:
Mm-hmm (affirmative) With us, I always say to my clients when I’m dealing with the homeowners, when I’m dealing with the realtors, I always talk about it’s not if it’s going to happen, it’s when going to happen. And while we don’t know that variable, an average of two claims happen within that first year of home ownership. And I know I think back to when I purchased my first home 15 years ago with my husband, we put all of our savings, everything that we had built up into that down payment for our home. The home that we purchased, there was a home warranty offered on it. And having that peace of mind, I believe we had three or four service claims the first year of homeownership.

Kristee Golan:
The funny thing about that is looking back at that story now, working for American Home Shield, I had an American Home Shield warranty 15 years ago on my home. So kind of crazy how it all comes back into play. Mm-hmm (affirmative)

Jon Lafferty:
Yeah. Really interesting. Question for you, Tony, just as an aside. How many times have you had buyers where they basically emptied their bank account and had almost nothing left when they were purchasing their first home and maybe didn’t have a home warranty?

Tony Abate:
Yeah, far too often. I have to tell you that there’s situations where we have to time the closing based on payroll deposits and then it’s just running way too skinny. Boy, if anybody needs a home warranty it’s that because if they have any expense after closing, they’re really going to… There’s no landlord to call. You got to take care of it and hopefully that warranty is in place.

Kristee Golan:
Yeah, absolutely. I deal with realtors all day long and homeowners and when you’re really looking at who should have a home warranty, sometimes agents and realtors are selective as to who they’re offering that home warranty to. That home warranty is just as important to that home that’s five years old as the home that’s 50 years old with protecting those appliances regardless of the age. Like I said, it’s not if it’s going to happen, it’s when that breakdown is going to occur.

Jon Lafferty:
Let’s talk about types of coverage that are offered and things that are typically covered items in the house that are typically covered with a home warranty and maybe some things that aren’t.

Kristee Golan:
Yeah, absolutely. So we offer three different real estate packages with American Home Shield. The base package is our shield essential plan. It covers the major systems in the home. So your HVAC system, water heater, electrical, plumbing. The systems that are the most expensive to repair in your home.

Kristee Golan:
We also offer a mid package shield plus that adds on all the appliances. So it covers all of your appliances in your home, washer, dryer, refrigerator, oven, cooktop, range, dishwasher, garbage disposal, microwave oven.

Kristee Golan:
And then our top package shield complete adds on the bells and whistles of the warranties. So your garage door opener, your ceiling fans, doorbells, all those additional home items as completing the package.

Jon Lafferty:
Correct me if I’m wrong, I thought one of them offered, if there was any work that was done that wasn’t permitted or up to code and something went wrong that it would be covered.

Kristee Golan:
Absolutely. That’s part of our comprehensive coverage we offer on all of our plans. We offer up to $250 per contract year for permits and for code violations. If something breaks down and we need to bring it up to code or we need to pull a permit, we will pay up to $250 per each on that contract.

Jon Lafferty:
That’s pretty good.

Tony Abate:
Okay. There is this scenario just so I’m understanding because I’m kind of one step removed. So somebody does a bathroom addition and it’s done by their uncle because the guy just knows what he’s doing really good and they put that bathroom in. Now they go to sell the home and there’s a plumbing failure in that bathroom. The fact that that person did not pull permits does not prevent coverage. Is this correct?

Kristee Golan:
Correct.

Tony Abate:
Okay, good.

Kristee Golan:
Correct. But if there was a plumbing fail, if there was an issue with the plumbing that failed, we needed to repair that plumbing issue and we needed to bring it up to code or we needed a pull a permit to do so that would be covered under our warranty correct.

Tony Abate:
Okay.

Jon Lafferty:
That’s interesting.

Tony Abate:
Yeah. Yeah. That’s a huge list of things that are covered even on just the first couple of tiers and there’s no cheap service calls. It can’t take very much to offset the cost of the home warranty. One or two service costs I would have to think would easily offset the cost of what the home warranty… If the buyer choose to pay for it themselves.

Kristee Golan:
Right. Absolutely. Our service fee is $75 on any level of warranty with us. So anytime that client needs to place a work order and get a technician out to their home, they would pay that $75 for us to get that technician out to diagnose.

Jon Lafferty:
Mm-hmm (affirmative) Can you talk a little bit about what separates American Home Shield from other home warranty companies and maybe some of the local utilities that offer coverage as well to homeowners?

Kristee Golan:
Absolutely. I’m biased. I work for American Home Shield and while I don’t want to talk about the competition, I always talk about what we do really well as a company.

Kristee Golan:
One of the great things about American Home Shield is that we have a network of over 15,000 contractors that work with us. So there are other home warranty companies out there that you work with your own contractors. For us, we make it very simple for our clients. They call us, they place the work order, we send the technician straight to their homes. So they don’t have to take time out of their day to find a contractor. While hiring your own contractor is great if you know somebody. If you don’t know anyone… That’s the great thing about us. You call the 800 number, you log in online and place that work order that service call and we will get someone to your home within 48 hours.

Jon Lafferty:
What’s the biggest complaint right now that you hear from everybody, Tony? Especially people who want to do things with their house.

Jon Lafferty:
Can’t get a contractor. They’re booked out for six weeks before they can even come to your house and take a look at something. Or you want something upgraded or repaired. Good luck. Because they’re all busy, they’re all slammed. You can’t find anybody.

Jon Lafferty:
If you do it on your own, right? You’re going to pay probably quite a bit of money or you may get a pretty good deal on it, but they may be able to do the work for you over the next six months or eight months.

Tony Abate:
Yeah. It’s a problem. It really is. And then when you finally can find that contractor who is not busy, well, then you’ve got to kind of wonder, well, why isn’t this guy busy and everybody else’s busy? And now you might be getting substandard service. Kristee, I imagine that the contractors that you call, you’re not just Googling somebody. You’ve vetted these places and these are folks that have some reliable track record. Is that safe to say?

Kristee Golan:
Absolutely. Our contractors are all licensed and insured, fully vetted with us. We work on a five star rating. We, obviously, love to give that work to our five star vendors. So we do have a proven track record with the vendors that we work with.

Tony Abate:
Yeah, I just had to have a refrigerator repair and I don’t have a home warranty on my home. A huge part of the anxiety was just who to call. And then gee, can I trust these reviews? Do I know anything about this guy? It was painful. So to know that that’s already been done, that’s a huge advantage.

Kristee Golan:
Right. Absolutely.

Tony Abate:
Yeah.

Jon Lafferty:
Now, if you’re a homeowner and you’ve been in your house for several years, do you have the ability to purchase a home warranty?

Kristee Golan:
Absolutely. The products that I sell is the real estate product, the first year real estate product. However, we do sell a product, a direct to consumer product, that you can purchase through our website at ahs.com and get your prices quoted that way if you are a current homeowner. Mm-hmm (affirmative) Absolutely.

Tony Abate:
Yeah. That’s huge. That’s huge. I didn’t know that.

Kristee Golan:
The packages are still very similar. We have a systems only package and appliance package. A combo package.

Jon Lafferty:
I think you and I talked about this before. It is the consumer package a little bit pricier than if somebody who’s buying on the real estate side or they’re very comparable.

Kristee Golan:
All of our products are very comparable. The coverage is different depending on if you have the real estate product or a few of the direct to consumer product. So the coverage is a little bit different, but we try and keep it pretty consistent across all plans.

Jon Lafferty:
All right. So let’s address the 600 pound gorilla in the room.

Tony Abate:
Yeah. Yeah.

Jon Lafferty:
I have a home warranty on my house. I have, let’s say, the middle plan. Okay? I move into my house and I’ve been in there for five months, so it’s now December, January. My furnace quits. I call up American Home Shield. They send out a technician, he comes out and says, “Your furnace is 35 years old. It’s kaput. Can’t fix it. Parts aren’t made anymore.” And I say, “Okay. Well, the inspector at the time told me it was an 80 efficiency furnace. I want a better efficiency furnace. I want fresh air to be used to heat and blown throughout the house. So I want to 90 plus.” And he says, “All right, no problem.” And I said, “Okay, great. So I’m totally covered on the home warranty, right?”

Kristee Golan:
Well, answer to that is-

Jon Lafferty:
I know the answer.

Kristee Golan:
… kind of. Kind of. Obviously with that furnace that has failed we’re repair company first. So we try and repair and if there’s no parts available, that technician diagnosis that we need to go to replacement. That’s the recommendation. That’s how we’ll move forward.

Kristee Golan:
When we look at what we replace, we’re going to replace like for like. So we’re going to look at things like capacity, efficiency, features of that item and that’s what we’re going to replace it with.

Kristee Golan:
Now as a homeowner you always have that option to upgrade and you can pay that upgrade and that difference straight to our technicians and work with our technician if you want to have a higher efficient furnace. That’s your option at that time. But what American Home Shield will cover is like for like with that unit.

Tony Abate:
Mm-hmm (affirmative)

Kristee Golan:
The other thing, and I think the other misconception with a home warranty as an any insurance out there is that everything is covered. And really how I look at a home warranty is really similar to how I look at health insurance. You’re going to pay your deductible, so we have a $75 deductible or trade service fee. You’re also going to have what the insurance covers, what the warranty covers. And then also you may have some out-of-pocket costs that arise due to that replacement.

Kristee Golan:
So in a furnace replacement that you’re referencing, American Home Shield, if approved, would put in the new furnace for the client, but there may be some modifications that have to be made to the gas line, to the venting, to the flue in order to get that new unit to fit the existing space. That would be an out-of-pocket to the client, but American Home Shield would cover the cost of that new unit.

Kristee Golan:
So the value is definitely still there when you think about the average price of a new furnace. You’re talking probably $2,500 plus for that new unit for the price of, let’s say, a base warranty of $450 for that year.

Jon Lafferty:
Okay, well that makes complete sense. If we were… Well, let me back up. One of the things that, I think, separates your company from some of the others out there are your… I don’t want to call them add on services, but we almost call them concierge services talking about locksmith services and some of the other things that you guys offer in addition to the normal home warranties. Talk a little bit about those things.

Kristee Golan:
As a home warranty company, we’re definitely moving in the direction of adding value to our clients and giving them a reason to use our warranty without a breakdown happening. So a couple of examples of that, last year, we launched the rekey service. We offer rekey on any warranty that is purchased through American Home Shield, through my product. And what the rekey service does is for the price of the service fees, $75 is what the client would pay, we’ll send a technician straight to their home to rekey up to six locks and provide four identical keys to them for that service fee. So this is really a great feature and a great benefit to use, especially, once closing and moving in to get their home rekeyed.

Jon Lafferty:
That’s huge. I mean that’s one of the things that as a realtor we tell all of our buyer clients all the time. When you buy that house, one of the first things you should do is change all the locks in the house for at least a minimum of the front door because how many relatives have been given a key or how many people have come through the house and use their key and you just never know.

Tony Abate:
Yeah. What are you hearing from clients about what does the locksmiths charging for that kind of service?

Jon Lafferty:
I’ll tell you point blank. I met a locksmith at a house about two months ago. The owner mailed me a key from Kentucky and it never showed up and I had to get in there. So I met a locksmith out there and for one key, on the front door, it was $150.

Tony Abate:
Good gravy. And yours would be the cost of the service calls, $75.

Kristee Golan:
$75.

Tony Abate:
Four keys and all the-

Kristee Golan:
And six locks.

Tony Abate:
And six locks.

Kristee Golan:
Yeah. And the great thing about that is that if there’s a client that has more than six locks, they could then work with that vendor, with that technician on, if they had eight locks on those additional two locks.

Tony Abate:
Yeah, yeah. Wow.

Jon Lafferty:
It’s huge.

Tony Abate:
That is.

Jon Lafferty:
It’s a great convenience to be able to have that set up.

Tony Abate:
Yeah. Yeah. Wow.

Kristee Golan:
Right. We really try and tie back that cost to that service fee. So we’re also offering… We’re getting ready to go into, I can’t believe I’m saying this, heating season, right? It’s August. It’s a little chilly out there today. So getting ready to get into heating season and we’re starting our heating system tune ups. Our heating system tune ups will start in September. So for September, October, November we offer that to our clients as a preventative for them to ensure that their systems are in proper working order before they have to turn on that heat. We do the same thing in the springtime for three months prior to AC season. Starting in September, our clients can have that heating system tune up for $75 as well.

Tony Abate:
Nice.

Jon Lafferty:
That’s a great price.

Tony Abate:
It is. It is, yeah. They started at $100 from everything that I see and that’s probably just getting the guy in the door. So yeah. That’s a big deal.

Kristee Golan:
Absolutely.

Tony Abate:
That’s a big deal.

Jon Lafferty:
Are there any other services like that, that the company was maybe beta testing that they’re now approved and moving forward and got to offer, or are they not at that yet?

Kristee Golan:
So we continue to pilot and test all the time. Nothing yet ready to roll out, but there are quite a few things in the works. Some of the other things that we have that have rolled out to our clients, we have a partnership with HelloTech. HelloTech is offering TV mounting services. So right now for our clients, we’re offering a TV mounting service up to 60 inch TV for $99.

Jon Lafferty:
That’s awesome.

Kristee Golan:
Yeah. And then we also have, right now… This was actually added on, Michigan was a test market, and it’s on our current brochure. We’re offering an electronics protection plan through Asurion. We have a partnership with Asurion, which protects an unlimited amount of electronics in your home. I think about myself, I have myself, my husband and three kids and the amount of electronics that are in our home. We protect everything from televisions to tablets, computers, laptops, all of those systems, smart home system. Unlimited amount for $240 for years. So for $20 a month we’re going to have all of those electronics protected.

Kristee Golan:
The great thing about our protection is we protect against surge failures, which when you buy an extended warranty on a lot of those items, that’s excluded. In our warranty it’s included. So the electronics protection plan is an add on, similar to adding on pool coverage, spa coverage to your existing contract, that rider, and that’s what’s available to our clients. We’re really excited to offer that to them as well as a value add.

Tony Abate:
So can I ask what… That protected against what for when you’re talking about electronics, surge damage and what other things does that…. Or is that predominantly what the coverage is for?

Kristee Golan:
Yeah, it really protects similar to how our warranty protects our systems and appliances against breakdowns that happen due to normal wear and tear. And that’s really how we view the electronics as well.

Tony Abate:
Mm-hmm (affirmative).

Kristee Golan:
Mm-hmm (affirmative).

Tony Abate:
Yeah. Number of devices in homes these days. My goodness. Dozens really, isn’t it?

Kristee Golan:
Dozens.

Tony Abate:
Yeah.

Kristee Golan:
Absolutely.

Jon Lafferty:
We’ve talked a lot about the buyer side and the benefits to the buyer. Can you take a minute and just talk about the benefits on the seller side with somebody who’s selling a home and what having a home warranty in place for them, how that might help them?

Kristee Golan:
Absolutely. It’s twofold with the seller. Really with offering a home warranty on that listing, it’s really marketing your home. You want to market your home and really ensure that that potential buyer sees that as a value add as well. Especially if you’re dealing with buyers who are first time home buyers or buyers that may not be the most handy or really looking at that negotiation tool with using that home warranty and that offering and giving it that peace of mind to that potential buyer down the road.

Kristee Golan:
Also, looking at a home warranty as that peace of mind for the seller. That seller really is moving on to their next step as well. The last thing that they want to think about is an unexpected breakdown that may happen during that listing period too. So we do offer listing coverage for that seller as an add on to the buyer plan that they’re going to offer the buyer, which will really get them through that listing period and get them through that home inspection process.

Jon Lafferty:
You have no idea how many times I’ve had that conversation with a seller where the furnace is the original, the houses 35 years old and we have that discussion about putting a home warranty in place because it just makes sense. Murphy’s law would dictate that you get a buyer, we’re under contract, we’re moving towards closing and the furnace quits. In fact, another agent in my office had that exact same thing happened. The furnace completely went kaput and they were going to offer a credit and just say the furnace isn’t working anymore, but here’s a small credit for you. Or they were going to offer a home warranty for it. That’s what they were going to do. They were out for home warranty first and I said to that agent, “They don’t warranty. If they know it’s failed, they really need to step up and fix that.” But if they had the home warranty in place to begin with, it would’ve been a far different cost for them.

Tony Abate:
Yeah.

Kristee Golan:
Absolutely. We assume when a home warranty is put in place that everything isn’t working order, correct? So it always does give that client that peace of mind for that seller option, absolutely. If they put that seller coverage in place when they list it or prior to that inspection that absolutely could have potential for coverage down the line for them.

Tony Abate:
That’s huge. Yeah. Yeah. You can’t buy car insurance while you’re sitting at the accident scene, right?

Kristee Golan:
You cannot.

Tony Abate:
You got to think ahead for these kinds of things. Yeah.

Kristee Golan:
You cannot.

Jon Lafferty:
That’s a great analogy.

Tony Abate:
Well, you know what? I can’t imagine. I’m thinking if I’m selling my house and I live in a 100 year old house. So everything on the inspection is going to be sort of, eh, maybe and in a heartbeat I would say, “You know what? You’re covered. You’ve got warranty coverage.” I don’t know why you wouldn’t do that.

Kristee Golan:
Yeah, absolutely.

Jon Lafferty:
Shoot. I was going to ask another question.

Tony Abate:
Oh, I knocked it out of your head. I’m sorry.

Jon Lafferty:
Yeah. Somebody distracted me.

Tony Abate:
Oh, man. I know. I stepped out of my lane.

Jon Lafferty:
No, no, no, no. It wasn’t you, wasn’t you. What was I going to talk about? Shoot.

Tony Abate:
Yeah.

Jon Lafferty:
Oh, I know what I was going to bring up. So every now and then you have these people who think they’re very clever and buy a home warranty and move into a house. And within 30 days you’re getting phone calls for a claim for a new furnace, for a new hot water heater for a failed refrigerator. At what point does the home warranty company say, “Okay.” Or is that what the technicians come out there. They’re out there to diagnose the problem and these guys or and gals are sharp enough to figure out that yeah, this wasn’t functioning for a while.

Kristee Golan:
Absolutely. We rely on our technicians to make that diagnosis for us. Many of these technicians have worked with us and have that relationship with American Home Shield. But one of the great things about our coverage is we don’t offer any age restrictions on our warranty. So you might have something that shows up on the home inspection as limited life expectancy. We cover that appliance or that system, 30 year old system, just like we would a five year old system. We don’t depreciate on the value that we pay out for that repair replacement and we don’t have an obsolescence clause.

Kristee Golan:
So those are really great areas that make us stand out in the industry. I also look at the coverage that we offer to our clients. We offer the same comprehensive coverage across all plans. Our clients just need to determine what components, what systems or appliances they want covered in their home. We offer undetectable, preexisting conditions, which a lot of other home warranty companies out there don’t offer that. For us, when our technician goes out to the home, there’s no mechanical test required, just a visual inspection is required to determine the diagnosis of that item.

Tony Abate:
Wow. That’s a big deal. I have a feeling consumers probably look at that home warranty is a home warranty. You either have it or you don’t. And that is absolutely not the case. They need to dive a little deeper, don’t they? And find out what are the working parts of this home warranty, huh?

Kristee Golan:
Absolutely.

Jon Lafferty:
I will tell you that in the past, I know this for a fact that other home warranty companies have approached the new home owner and said, “We want to see a copy of your inspection report.”

Tony Abate:
Really?

Jon Lafferty:
We want to see what the inspector said about the furnace or whatever. They want to see it and in addition to what they’re doing and that’ll determine what they cover. So having a good home warranty company is important and American Home Shield is a great home warranty company. They don’t cover everything. Nobody does.

Tony Abate:
Nobody does, right.

Jon Lafferty:
But they do a great job of working with people to do that.

Tony Abate:
Yeah.

Jon Lafferty:
Hey Kristee Golan with American Home Shield. I want to thank you for coming by today. This has been great and informative. And I think anybody who doesn’t have any familiarity with home warranties, I think there’s some great information here. If somebody is interested in getting a home warranty, where do they go? What’s the number that they call? How do they go about doing that?

Kristee Golan:
They would absolutely go to our website at ahs.com. And they can get all the information available at that site.

Jon Lafferty:
Oh, real simple.

Kristee Golan:
Absolutely.

Tony Abate:
Perfect. Perfect. Kristee thank you so much.

Kristee Golan:
Thank you. Thanks for having me.

Tony Abate:
This is great information. I learned stuff, that’s for sure. So, hey thanks for listening to Avoiding Real Estate Turbulence. If you’d be so kind to subscribe, review and rate, we would appreciate it. Please share with your friends, family, and coworkers, that they too can find us on Apple podcast, Google podcast and Spotify.