Home Warranty

[StevenT]

Although I didn't intend to, I'm considering offering Home Warranties with inspections. I got in touch with HWA... through TIJ (I let them know that it was a TIJ referral).

Anyway, I'm wondering if any of you guys are offering this service and if you do, how do you market it?

The way I see it, there are three possibilities.

1. Include it in my existing price as a "lost leader" and hope to get more business. I really don't like this idea, as I will make less money per inspection. I work very hard when I do an inspection and already feel home inspections are underpriced. If I can't make a decent profit for my work, I would rather go fishing.

2. Charge more and include it with every inspection.

3. Offer it as an option and charge more for it.

My other question is, for those that do offer it and charge additional for it, do you offer it at cost or do you add something on for yourself? If yes, how much?

[sepefrio]

I offer the service through a different company. I have the cost included in the price and just present it to the client. It cost me about $17 per so i just add $20 to my inspection fee's. Only been using this service now for maybe a month, but all my clients have liked it. Some RE's have raised an eyebrow though. I guess if we offer the service "for free", then they can't sell them to clients. I also like the promotional stuff that comes with it. I use that to reduce my marketing costs.

[StevenT]

Hey John,

How are you tonight? Thanks for the response. Which company do you use? Is there a sign up fee?

[Scottpat]

I see a few issues with home inspectors and home warranty programs:

1. One, you might need to have an insurance salesperson license depending on your states requirements.

2. By issuing a home warranty the inspector might become complacent in their inspections, knowing that they will have a warranty to help if a problem arises.

3. Warranty companies have a poor history of turning down claims, guess who your client will be calling next!

4. You need to disclose that you might be getting a commission on the sale of the warranty, if it is allowed in your state.

[sepefrio]

Scott good points.

Not sure about the sales thing as I don't sell it to them. One could say i do as it's included in the price of the inspection but the inspection will cost the same regardless if they take the warranty or not.

As for being complacent, I don't think that applies to this. If a HI is going to be complacent, they will do it regardless of this. You could also say those that buy E&O insurance would become complacent.

All insurance companies turn down claims. They don't make money paying claims. But you are right, if they do turn it down, the Hi will be getting called next.

Some offer commissions others don't.

[sixgun95]

Don't listen to all the negativity, it s a great idea to think out of the box. I started using AHW and my business is thriving because of it. Those who are shopping for an inspector, stop shopping as they see the added value. Bottom line is that it "bridges the gap" between the inspecton and when and if the realtor warranty starts, it by no means supplements what the realtors sell. And it by no means implies complacency, it does imply IMO a good business decision...one up on the other guy for sure. I buy 30 at a time, cost is $13 EA. Good luck & go for it. What do you have to lose!

[Scottpat]

Originally posted by sixgun95

Don't listen to all the negativity, it s a great idea to think out of the box. I started using AHW and my business is thriving because of it. Those who are shopping for an inspector, stop shopping as they see the added value. Bottom line is that it "bridges the gap" between the inspecton and when and if the realtor warranty starts, it by no means supplements what the realtors sell. And it by no means implies complacency, it does imply IMO a good business decision...one up on the other guy for sure. I buy 30 at a time, cost is $13 EA. Good luck & go for it. What do you have to lose!

Hi Nick,

I did not realize you were inspecting yet. Great to hear that your business is doing good. I happened to check out the state home inspector board website and I did not see a listing for anyone with your name. Nick Tucci is not listed, is this your name or are you not using your real name on this board?