Real Estate in High Gear

Ep. 02 - The Benefits of Home Warranties Explained - Tara Carter

• Mike Paylian • Season 1 • Episode 2

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Ever wondered how to protect your home from unexpected repair costs? Get ready to unlock the secrets of home warranties with our expert guest, Tara Carter from Old Republic Home Warranty. Tara, who has been making waves in the real estate industry since 2004 and has a rich background in investment property ownership, shares her wealth of knowledge on why every homeowner should consider a home warranty. By tuning in, you'll learn the ins and outs of how home warranties work, the critical differences between home warranties, home insurance, and manufacturer warranties, and why they are essential for covering systems and appliances prone to wear and tear.

You'll also hear real-life stories that demonstrate the tangible benefits of having a home warranty, such as saving $800 on an air conditioner repair. Tara walks us through the typical duration of home warranties, renewal processes, and potential out-of-pocket expenses, giving you a clear picture of what to expect. Whether you're a new homeowner, a seasoned real estate investor, or just curious about how to better protect your home, this episode is packed with actionable insights and practical advice. Don’t miss out on this invaluable conversation that could save you hundreds, if not thousands, of dollars in home repairs!

Speaker 1:

Hey everyone, welcome to another episode of the Clutch Properties Real Estate in High Gear podcast. Today we're happy to welcome Tara Carter with Old Republic Home Warranty. Tara moved to Arizona in 1993 and she's been in the real estate industry since 2004. She owns a few investment properties herself and has been with Old Republic Home Warranty for the past 13 years. The episode has a ton of useful tips when it comes to home warranties and why you should always have one on your home. So let's dive right in. Welcome Tara.

Speaker 2:

Thank you, thanks for having me.

Speaker 1:

Of course it's good to have you, so tell us a little bit about yourself and how you got into the industry, and just about yourself in general.

Speaker 2:

Sure. Well, I moved out to Arizona after Hurricane Andrew in Florida, so that was back in, I believe, 93. And I worked for AT&T Wireless for a very long time and they wanted me to move to Dallas, texas, and, being a Pittsburgh Steelers fan, I can't live in Texas. So I got into real estate and at first I was a title rep for Old Republic and now, 16 years later, I've been in home warranty. So I love the industry.

Speaker 1:

Awesome, awesome. And so you mentioned home warranty. So I love the industry, awesome, awesome. And so you mentioned home warranty. Can you just briefly tell us, tell the audience, what is home warranty? How does it work? Just a little bit about that.

Speaker 2:

Well, everyone should have a home warranty. You can get a home warranty whether you're purchasing a home or whether you already own your home, and we cover the systems and appliances in the home. So air conditioning, plumbing, electrical kitchen appliances, pool equipment and so on.

Speaker 1:

and so on. So how is that different than home insurance, for example?

Speaker 2:

I always say that home insurance covers structural and things that happen from like an act of God you know, and home warranty we cover due to normal wear and tear. Got it.

Speaker 1:

Got it.

Speaker 3:

So you mentioned that. You know it covers appliances and things like that. So how's that different from a manufacturer's warranty that also covers appliances? And what have you in your house?

Speaker 2:

Sure, a manufacturer warranty. When you purchase, let's say, a new refrigerator, you usually get a one-year warranty with it and it's usually for parts only. Okay, and if you have our platinum plan then we cover the labor. Just the other day I saved a guy $800. He had his air conditioner went out and he didn't even know it was under manufacturer warranty. So we sent somebody out. It was under manufacturer warranty, the manufacturer supplied the parts and we picked up the $800 worth of labor.

Speaker 1:

So he was very happy as a homeowner, I'm sure, I'm sure. How long do home warranties usually last?

Speaker 2:

Well, they're one-year agreements and then you usually get a renewal in the mail and you can keep renewing it as many times as you'd like, unless there's too many claims and home warranties do have the right to cancel you, just like car insurance or health insurance. So it doesn't happen very often, but but it happens. It does happen occasionally.

Speaker 3:

Sure. So like, let's say, you've bought your policy and then you have something that needs repair, are there any out of pocket expenses to kind of budget for in case something like that does happen?

Speaker 2:

You know that's a good question. There is a deductible when. So I'll just give you like a rundown of how it happens. Okay, so let's say my air conditioner is blowing warm air. I would call into the call center, the 800 number. We send out a licensed insured contractor. You pay them $75. That's our what we call a trade call fee or a service fee. And then he that's for his time and his diagnosis. Then he reaches out to us and if he feels like it can be repaired, we'll repair it. If not, we'll replace it. Now there's different plans. So depending on the plan you have, then you may have a little bit of out-of-pocket cost or you could have a lot out-of-pocket cost. So the better plan you purchase, the less or no out-of-pocket you'll have.

Speaker 3:

Sure Like any insurance yeah.

Speaker 1:

Okay, got it, got it. So I mean I know you mentioned that mainly it's like appliances. Are there any exclusions to that? Is there anything that's not covered, or is that? I mean, obviously there's different warranties, different plans, right, but I mean, is there anything that there's no way that that will be covered?

Speaker 2:

Well, and it all depends on the home. It depends on whether it's a condo, it depends on the plan that you choose. So basically, with Old Republic Home Protection you get. You know, like we talked about, we cover all air conditioners but see, all home warranties are not the same. We're very proud that we're number one here in Arizona. We cover more homes than any other home warranty company in Arizona, so proud of that.

Speaker 1:

Wow.

Speaker 2:

Also last year, we've had the longest, hottest summer on record in Arizona, I'm still sweating. I know right, our first 90 day.

Speaker 3:

Everybody went crazy this year, oh no.

Speaker 2:

We spent $22 million in Arizona alone on claims. So it's very important to know the policy you have and make sure you talk to an expert like myself that can help you decide what is best for you. There's some people who like to self-insure, you know, and just have the basic, and then there's people that don't know what a hammer looks like and wants to have full coverage you know, so we try to get the right policy for the right homeowner.

Speaker 3:

Okay, and so, given that you guys are the number one provider of home warranties in Arizona, that must mean you also have a lot of really good relationships with contractors and service providers. As a discerning consumer, I know that I am kind of selective about the contractors that I select to do the work at my home. So how do those people stack up against the folks that you guys hire to do the work?

Speaker 2:

You know we vet every contractor that we have on our list. First of all, if you talk to almost any contractor out there, they like working for us because we pay them.

Speaker 2:

And we go back to old. All home warranties are not the same. You know, when gas prices go up, maybe they don't want to go 100 miles out. So we overlap contractors that way, so contractors come to us. Contractors that way. So contractors come to us. We give them volume and they are very appreciative because there are so many great contractors out there that we've helped them build their business.

Speaker 1:

Awesome and typically, just from what we've seen in transactions throughout the usual transaction you'll have the home warranty ordered and paid for before closing. Can it be bought after closing?

Speaker 2:

Yes, there's a lot of schools of thought on that. So if you are buying a home and some realtors like to order the home warranty as soon as they open escrow, because that helps the escrow company, help get the cost in the right columns and all that kind of thing. Others like to wait until after the inspection period because maybe you found out it's on septic and you didn't know that when you were first looking at the home.

Speaker 2:

And then there's in this crazy market that we're in today. Some like to do no home warranty on there and we give the client up to 30 days after close of escrow to order the home warranty and pay for it and it will still be in effect as if they write at close of escrow. Now if it's your neighbor that wants to have a home warranty If they're coming over from a competitor they heard we were better and they want to come try our service out then if they can give us a renewal notice from the competitor, there's no break in coverage. So we start it right as theirs is ending. If you've been in your home for 10 years and you're just like, oh no, stuff might start breaking, there's a 30-day waiting period. But as long as you, as realtors, give us the referral, they get our brochure pricing, so it's valuable to them. Okay.

Speaker 3:

That's great. And let's say there's a customer that bought your warranty and you know they're renewing it and whatnot, and they decide to sell their home Will that warranty, is it possible to transfer to the new owner of the home?

Speaker 2:

Absolutely so. With Old Republic they have three choices. Okay One the homeowner can get a prorated refund if they want, and usually there's an admin fee added to that. That's the least common thing that happens. They can transfer just the balance to the new homeowner, or we can prorate it and make it for a full year for the new buyer.

Speaker 1:

Okay, gotcha, and typically home warranties are kind of seen as a protection for the new buyer right. But I guess the question here is is there any protection for the sellers right? Is it helpful to a seller anyway?

Speaker 2:

Oh, absolutely Not only buying a home warranty for the new buyer, they can get a listing coverage and that twofold helps. You know, as a realtor you can say you know, if you list with me, I'll give you a limited warranty for the life of the listing. Okay, so that's you giving value to your client. So then we put the listing coverage on there and the dishwasher breaks, you know, after it's on there and we're going to cover that for them. They'll have the $75 trade call fee. We'll replace the dishwasher or repair it, and for very little out-of-pocket cost for the seller. And then when the buyer comes in to buy the home, the seller can purchase it for them and you know it's just a, it's like a security blanket. You know Buyers like to know that a home warranty was already on the home because they feel like the home's been well taken care of and the seller can feel confident that you know everything's in good working condition for the new buyer and it makes it a much smoother transaction.

Speaker 3:

Well sure, I mean, if you're going to buy a warranty on your phone or your computer or TV or whatever, why wouldn't you buy the same for the biggest asset that you own?

Speaker 2:

Right, exactly.

Speaker 3:

Okay, so I think we've covered buyers, sellers, and there's another group that I want to talk about. A lot of my clients are in this group. They're investors, so you know people who are buying properties to rent them out. So why might a home warranty make sense for someone like that?

Speaker 2:

Well, I have three rentals myself and I have home warranties on every one of them. And I always like to tell the story because, you know, my husband knows what I do for a living but he doesn't really know what I do for a living. You know, oh, my wife sells home warranties. Well, he manages the properties and every time he's gone out and met with the contractor, whoever you know, he comes home and he goes. Do you know how much that home warranty has saved us? Yeah, well, yeah, I kind of do that's what I do for a living. So I have the Platinum and I pay for home warranties, just like everybody else. And not too long ago a compressor went out and for $75, I had the Platinum. Plan I got a new compressor. It saved us over $2,500. Plan I got a new compressor. It saved us over $2,500. So you know, it's a great way to be able to budget for all of your investments, you know, because I mean everybody's investing in real estate right now, right Right, or, if they're not, they should be Exactly.

Speaker 2:

Exactly, and you know you have to have a budget for all of that, and home warranties help do that, because if you have two or three homes and all the air conditioners go bad the same year, that's a big out-of-pocket expense.

Speaker 3:

Yeah, yeah. It definitely makes that more predictable so that you know every month I'm going to pay X amount and at worst I'm going to have this. You know, call fee for $75 or whatever it is for the technician to come out and repair, replace it Exactly.

Speaker 1:

That's great, and have you had any? You know? Here's a bonus question have you had any crazy stories that you can share with the audience, with home warranties?

Speaker 2:

Maybe someone that didn't have one.

Speaker 2:

Well, yes, I mean for those who didn't have them. I always say this that if you see an air conditioning van coming in your neighborhood a couple times, you know that it's time. So that's one thing. If you remember, back when homes were staying on the market for a long time and they were vacant and stuff like that, I had situations where I was very happy I wasn't an air conditioning technician because the homeowner comes in, the place was vacant for a very long time and turns on the air conditioner and breaks right away. And you know there were pack rats in there and they chewed the wires or there was a snake wrapped around the fan. That's crazy, yeah. And back when they were stealing you know, when there was a lot of theft.

Speaker 2:

I had a lady who had two air conditioners. One of them wasn't working and she had us come out and the guy went back there and it was missing Wow.

Speaker 3:

Snake wrapped around the fan and then you turn that thing on. I can't even imagine the snakes of each coming for dinner.

Speaker 2:

I don't think the snake made it, but I was really glad I wasn't an air conditioning tech back then I'll tell you that's funny.

Speaker 1:

Well, I mean, that's all the questions I have. Thank you so much for coming in. Obviously, the listeners that are listening they might want to reach out to you and get a hold of you, ask questions that we may not have covered during the podcast. Is there a way for them to reach out to you that works best?

Speaker 2:

Oh, absolutely. You can call, text or email me anytime. My name is Tara Carter. I'm with Old Republic Home Protection. My cell phone number is 480-707-7779. And then it's Tara C T-A-R-A-C at O-R-H-Pcom. I'm happy to help. Call me anytime.

Speaker 3:

Thanks so much, tara. Awesome, thank you, tara. Thank you. Thanks everyone for tuning into our podcast. We'll be releasing a new episode on the first Wednesday of every month, so be sure to like, subscribe, share and look out for the next episode of Real Estate in High Gear.