Tyler:                     Hello everyone. This is Tyler Ford, eXp Realty here in Tucson, Arizona, and I am with Heather Chumbler-Rich again with 2-10 Home Warranty, and she is the senior account rep for Southern Arizona. She does a great job, and today we’ll be talking about a subject matter that kind of correlates to the last one that we just did about Freon and R22 and HVAC systems, and that’s why we’re doing these two back to back. But that is what is called the HVAC certification, and that is getting prior to a buyer…

Heather:              Or a seller.

Tyler:                     During the inspection period getting the HVAC inspected and certified and or a seller could do it up front as well, which would actually save a lot. It would make things so much easier going into a home warranty, especially if they have seller’s coverage. And I learned this lesson the hard way, and now I’m just, especially when I’m on the buyer’s side, I always do this because it gives you a ton of leverage to negotiate the BINSR, because as Heather is going to explain that if there’s a preexisting condition and you don’t know about it, the home warranty may or may not kick in within a period of time in order to fix something that would go wrong right out of the gate. And that’s why it’s so important. So with that, I’m going to turn it over to Heather, and we’re going to talk about proper steps and things that you can do to assure that the home warranty will cover the HVAC from day one. And so why somebody would want to do an HVAC certification?

Heather:              Okay, thank you so much. So the reason why we came up with this optional HVAC certification or inspection, if you will, is because we need our home inspectors, they’re so important for the transaction. But if they’re not a licensed HVAC provider, they can’t open up the system and look at the evap coil or the heat exchanger or the fan blower to really know the true intricate workings of the inside of the HVAC system. So we decided to create this 2-10 Home Buyers Warranty. My company decided to create this as a 100% guarantee of coverage. Currently right now with other home warranty companies, we all have the same type of verbiage that says that we do not cover any kind of a preexisting condition that would be determined either through a mechanical test or a visual inspection before the effective date of the warranty.

Heather:              So we all have that verbiage in our home service agreement, in the terms and conditions, but 2-10 Home Buyers Warranty is taking it one step further by offering an optional program. So what we do is, and it’s designed to be done during the inspection period, or if the seller just wants to have a really impressive listing, they can absolutely do it before the buyer comes to the table. But it is a 59 point inspection. It’s $85 for the main unit, $35 for each additional. And what we do is we send out our service provider, who will then go in and do just a thorough exam of the system. At that moment, they’ll be able to tell you if it passed or if it did not pass. If it passes and we’re going to give a certificate that goes with it, it’s going to come from a HVAC certification department. If it does not pass, and if, let’s say for example, the coils are more than 60% clogged, or perhaps there is a small pin hole leak in the coil, or the portion of the HVAC system is rusted out because it’s not functioning properly, they’re going to give a recommendation as to what needs to be done to bring it in a good and safe working order.

Heather:              They’re looking at the mechanical functionality of the system. So with that, it is recommended that whatever is presented, if it does need repair, that it’s done within our service provider, under their network, because we require them to warrant their work. They have to do it right, and we want them to do it right the first time. Sometimes it comes up where people want to use their own HVAC company, and that’s wonderful. We’ll take an invoice of a certification from another company. It won’t be certified through our 2-10 umbrella, but at least that point we’ll have another eye that went and looked at the HVAC system. The only challenge that we run into with that, Tyler, is sometimes if there is an issue that fails right after closing, then we ask that other company that was not in our network to go back out, if that was who the parties of the transaction hired, and nine times out of 10 they’re not going to go back out and warrant their work, because they were already at the property and they’ve already left. So that’s why I really love our program, because our service providers, they’re required to warrant what they do.

Tyler:                     Yeah. And I love it too, because as the buyer’s agent, especially during the inspection period, it’s so much easier when you’re negotiating the BINSR, to say, hey, if these things are not done, even though you’re providing a home warranty, and a lot of times they’ll come back and say, well, we’re getting a home warranty. That’s why we’re not going to do it. Well, if they do not fix these things, then the home warranty really doesn’t matter. So it gives you great leverage as the buyer’s agent to go in and negotiate a BINSR if you do the HVAC certification upfront.

Tyler:                     And I’ve had a couple situations where during the inspection, we just do it. We pay for it, because it’s worth it, because it can be some expensive things that need to be done and they literally, they can’t come back at you and say, well, we’re providing a home warranty. Well again, great, but it’s not going to be covered, because there’s a preexisting, so I’d love to hire whoever you guys recommend to do the certifications, and it just, it’s so worth the money.

Heather:              I agree.

Tyler:                     I learned this lesson the hard way, because one time I had a preexisting, you guys didn’t cover it. And then on another time, we did everything upfront. The unit was an older unit, and it was during the middle of the summer and something went wrong. And I can’t remember the specifics, but it was an older unit, and they could not find a replacement part, and you guys, no questions asked, put a brand new unit within 30 days on the property, and it’s because we did the HVAC certification.

Heather:              Yeah, it works. It really works. And the other thing that I really love about it too, because I have this flyer that is what I present to real estate agents. It is a flyer that on the bottom it has a waiver that says after being advised of the benefits and costs of the optional HVAC inspection, we declined to certify the HVAC unit. We agree to hold the broker and or agent harmless if there is later a failure that would have been covered had an HVAC inspection occurred. So I really love this flyer. I can send it out in an electronic version, because what I love about my job is I love to protect my agents, and this is just risk management right there.

Tyler:                     And we’ll put that in this blog post at the bottom, in terms of a resource link.

Heather:              Thank you.

Tyler:                     If somebody wants to, so a lot of times as agents, the challenge of the inspection period, whether it’s 10 days, 12 days, how easy is it to call up, order that HVAC cert, and try to get them there at the same time that the inspections are being done? Is it pretty easy to coordinate?

Heather:              So right now as we’re filming this video, we’re in the winter time and so turnaround time is pretty good. But in the summertime, I know typically people usually use a 10 day inspection period, but I advise that maybe increase that a few days, because quite honestly, this program is becoming in such high demand that it can take four days or three days before a service provider can get out there to certify it. So just definitely being more proactive, giving extra time to be able to order it, have the visit from the service provider come out there is recommended. It doesn’t always happen, and sometimes we’re jumping through hoops at the last minute, but more time available is helpful, especially in the summer.

Tyler:                     Yeah, and if you can’t get it done within the 10 days, it’s so worth trying to get a slight extension in the inspection period to get it done, because again, I’ve learned the lesson the hard way. Doing it up front makes your clients so much happier, because if something goes wrong, I mean, the majority of time when people are disappointed in a home warranty is when they figure out that something may not be covered. And this is an example that it’s worst been in the 80 bucks, 100 bucks, whatever it may be upfront to do the inspection, basically knowing that if something goes wrong, it’s covered.

Heather:              And you know what, I like what you had mentioned, because it comes up all the time where I hear that other people, meaning that maybe the seller side, is saying, oh I’m going to get you a home warranty for that. They’re going to cover that home warranty for that. Well, the thing is is that home warranty companies are not a home rehab company. We want to pay those claims and take care of the homeowners for the legitimate claims that are a true breakdown of normal wear and tear. And so I like just the fact of being able to fully communication to just let the agents know that the way to talk about a home warranty is that it’s not going to cover everything. It’s going to cover more than most. But we do absolutely want to rule out any kind of an existing issue in order for this to work proper the way that it’s designed to work. And so the more conversations that I can have around this category, the better, because obviously I want to be able to protect the sellers’ and buyers’ pockets.

Tyler:                     And I think for newer agents, a lot of agents who have been around understand that the certification, and it’s important to get done. But I think a lot of the newer agents don’t really realize that getting it certified upfront is a good thing to do to protect everybody. So again, I had to learn this lesson the hard way and now I’m a fanatic about doing the HVAC inspection upfront during the inspection process, and that way everything’s covered.

Heather:              Yeah, and when people say, so what if we did get it certified? So what do you cover? Do you have a dollar limit? And I have a specific email template if it’s helpful for real estate agents where I specify what we cover, especially in the air conditioning category, because the home service agreement with 2-10 Home Buyers Warranty will cover up to two systems per year, per contract of the eligible repairs. We try to repair first, and if we can’t repair then we replace. There are a few dollar limits that’s listed for geothermal, which is heating and cooling in the concrete. We also have a dollar limit for evaporate coolers, concrete, and case and refrigerant lines. But those dollar limits listed are the only dollar limits for us to repair or replace two systems per year per contract. So sometimes the public doesn’t fully know how to read this dollar limit category area, but it’s very robust. And then of course that we’re covering unlimited refrigerant is such a big deal. So we want to make sure it’s working proper before, and that’s why we have this inspection certification.

Tyler:                     Well, perfect. Did we cover it all? Did we miss anything?

Heather:              I think so. I think we got it. I think we’ve got it all. Also, we’ve got matching included in our plan too, so we match and retrofitting, especially if we can’t get a hold of the R22 anymore, moving into alternative refrigerants. We already covered that before, but it all comes together.

Tyler:                     Perfect. Well again, I had to learn this lesson the hard way, and the moral of this video that we’re doing is make sure you get the HVAC certified up front so the home warranty will kick in and cover anything and everything, so there’s no questions or uncertainty as to what it’ll cover. This assures that if the unit breaks it will be covered. Correct?

Heather:              Eligible for coverage. Yep. Absolutely. Thank you.

Tyler:                     Appreciate your time and look forward to the next video. What’s next on the list is to give the listeners, we’re going through, once a month we’re doing a subject matter in regards to home warranty.

Heather:              It could change depending on where we’re at in the month or the year. But we’ve got a happy home lock and hardware coming up and we also have preseason HVAC tune up coming up, where we’ll talk about what those are.

Tyler:                     Great. Well, I appreciate your time. We’re going to go ahead and post this, and look forward to doing the next one with you.

Heather:              Thank you. I appreciate you.

Tyler:                     Have a good day.

Heather:              Thank you.