Protecting Your Biggest Asset: Home Warranties with Rosie Poole!

What's up everybody? Welcome back to the New and Experienced Investor Podcast, a podcast that brings investors, real estate investors from all walks of life together. I'm one of your hosts. I'm Alex Barnett. I'm the new guy.

And I'm Joe Homs. So I guess that makes me either the experienced guy or the old guy.

That's right.

One of the two.

It's just part— it is what it is, as they say. And, uh, We're super excited. We have another guest in studio, a wealth of knowledge. We have with us today Rosie Poole. And we're— before we bring her on, we're, we're really excited to hear her story and to ask her a bunch of hard-hitting questions about the real estate industry. But before we get to that, let's tell them about the meetup we have coming up this month.

Is it last Monday of the month?

It's the 4th Monday. 4th Monday.

Oh, there's another Monday after that. Okay. Well, 4th Monday of the month. Hangar 24. Uh, my son-in-law Ryan will be there to speak on how he purchased last year 85 homes in Alabama, sight unseen.

And that's how you get the nickname Big Time.

Big Time. Yes. Yeah. Big Time.

Um, Young Alabama.

Yeah. That's average, average purchase price. 'Cause yeah, I mean, people always ask, you bought that many homes? You know, it's like, if you're from California, You know, average purchase price I think was around $35,000.

Mr. Montgomery.

Yeah, around there. I don't know if they're in Montgomery or not.

Ah, okay. I'm just coming up with different nicknames. Oh, look. Yeah, see, Mr. Montgomery.

His assistant's in the back saying.

Young Bama.

Shaking her head.

Yeah.

Yeah.

I'm coming up with different nicknames. But yeah, we'd love to have you guys there. It's a great place to meet other investors. Not only investors. There's a bunch of people that show up.

Everybody shows up.

All different types.

Rosie, I haven't seen you. Oh no, I did see you once, didn't I?

Yes, once I did.

Yes, yes, yeah. She came to one of my meetups.

Oh, of course. Rosie does all the meetups. Yeah, she's, she's out there. Um, and, uh, lenders, uh, contractors even show up. So whatever your need is, there's gonna be somebody there that you can connect with and start a relationship, which it's the whole thing in real estate, which we're going to find out. So with that, let's go ahead and, uh, bring Rosie onto the show. Rosie, thanks so much for being here.

Absolutely. Thanks for having me.

Yeah, awesome. Why don't you go ahead and, you know, kind of give us your bio and how you got into real estate and what you do?

Okay, so I was fresh out of college back in the dinosaur age, and I had a life-changing event, and I didn't know what I wanted to do. And a friend of mine just said, you know, my, my sister works for this great company called First American Title. And I go, okay, so what do they do? I had no clue about title, escrow, real estate. I was young. And she goes, oh, it's a great company. You should go and interview. So I did. And I ended up getting a job with First American in their escrow company back in the day at their old location on 5th and Main in Santa Ana. Now they're at the Taj Mahal off the 55 in Santa Ana. But so it's been many years, but I did escrow and I ended up working for Prudential Escrow as their Orange County rep. And then later on, I was like, okay, I've been in escrow for 20 years. I need a change. And back home, First American had an opening. for home warranty. And so I decided, oh, you know what? I think I need to go back home to First American. And so I got into the home warranty side of things, which is completely different.

Wow.

Yeah.

I never knew you were in escrow.

I was.

Never knew that.

A long time.

Wow.

That's where most people know me, actually.

Really?

Yeah.

And so you don't do that at all anymore?

No, no. Strictly home warranty. It's a big job.

Is it, is it, um, More stressful to be an escrow officer or what you do now?

So I was never an officer. I sat at a desk and I worked on a unit, but I was— I went off to sales right away because I knew I couldn't sit behind a desk and I would talk too much. So I was like, I went to the managers and I was like, you know what, I'm way too ADD and I can't sit behind a desk and be focused. So, and I'm always off, like, Rosie, get back to your desk and work. So I was like, I need to go into sales. And they're like, oh, we have an opening for an escrow rep. They actually bought 2 big escrow companies back in the day, and they needed a rep. And that's how I transitioned in from working on a desk going into sales.

Wow.

Yeah.

Wow. That's great. Tell us, home warranty. It's not like the greatest thing in real estate, but it can be.

Oh, it's not.

I'm talking about the product, not you, but the product. It's like, so tell me, what is home warranty for those of you out there who have no clue what it is?

Okay, so first and foremost, Joe is right. There's a lot of confusion.

Okay.

Onto what the product is, what it covers, and how it functions. And so where the confusion lies is first and foremost, home warranty companies get confused with homeowners insurance companies. So homeowners insurance, you typically pay along with your mortgage, right? And it protects the structure of the home and any catastrophic events. In home warranty, we are much more simpler, and we repair and protect, help protect your home for failures due to normal wear and tear, which is extremely important on your appliances and systems. Things that you're using three or four times a day. Like if you really think of you take a shower, how much time you're using for plumbing, how many times you turn on the light, your garbage disposal, your dishwasher. So your appliances are pretty simple and straightforward. And then your systems consist of your air conditioning, your heater, your garbage disposal, and like your pool equipment, things like that.

Okay. What Is it easier to ask you what you cover or what you don't cover?

So it's easier to ask what we cover, but it's extremely important to know that we never, ever, ever in home warranty world cover preexisting items. So what ends up happening is when you're in a real estate transaction, you're getting an inspection report prior to the close of escrow. Right?

Mm-hmm.

And in that inspection report, the inspector is notating all the failures to the home. The biggest misnomer is that after the close of escrow, the First American Home Warranty policy is going to take effect, right? But if the inspection report notates that the air conditioner wasn't working, you're not going to have it covered on the back end after the close. And that's the biggest confusion with homeowners and agents alike. They think that we should be covering things that were broken prior to the policy going into effect. So you have to think of it kind of like car insurance, right?

Mm-hmm.

You can't get in an accident and then go to your car insurance company and say, hey, can I have that insured now? It's never going to happen. So that's kind of a big thing. So it's very extremely important that you look at your inspection report, notice the red-noted items, and then ask either for them to be repaired. And if they are repaired prior to the close of escrow, you really need to ask for receipts from the seller side in order for them to be covered on the back end. once the home warranty policy goes into effect. So in my original example of, say, like the inspector says the air conditioner isn't working, right?

Mm-hmm.

So you hire a contractor to go out there. He makes the repairs on the air conditioning. Now you get that receipt. Now, if it breaks after the close of escrow, 3 days after the close of escrow, First American will honor that. that it was working at the time of coverage. And then the homeowner is good to go. And we will do the repair.

Okay, so let's back up a little. Why do we even want home warranty? What's the reason?

Because the cost is extremely low for things that you're using a minimum of 3 times a day. The thing that the Home Warranty is, it has contractors that are assigned. The price to have someone come to your home today, on average, on a retail bid, is typically about $150, where under Home Warranty, it's $85. The hard part, though, for consumers to acknowledge is that It does take time because we're a home warranty process and we are governed by the state of California. So we have to show why we're paying out on certain repairs. So there's documentation that has to go through, like if we're repairing a garbage disposal, what ends up happening is the contractor, the plumber, is licensed and bonded and insured. And they go out and they diagnosed the garbage disposal. They notice, yes, it needs to be replaced. They then give the report to First American Home Warranty. They look at that report and they say, yes, the failure was due to normal wear and tear, extremely important. Not, we put a can in the garbage disposal.

Yeah.

Okay, because it would be denied.

Mm-hmm.

And as long as it's normal wear and tear, then First American is then looking for a garbage disposal of similar features and functions, and then they're purchasing it from their suppliers. And when that garbage disposal comes in, then it moves to the homeowner's home for installation. So it's saving the homeowner a lot of money.

Okay, so I guess what I was trying to ask, in the transaction, the home warranty is usually provided to the buyer of the property. And I always looked at it as to like a peace of mind that the buyer was buying this property. And if something failed, there was somebody there to help them out.

Yes.

Instead of calling the seller or the seller's agent or even their agent, You know, to complain that, okay, like, we moved in 2 days ago and the garbage disposal's not working, you know? So that's why I always provide a home warranty, you know, a product when I'm selling a property, is really for that peace of mind. And hopefully my phone doesn't ring with complaints.

Right.

You know, because if it does, guess who I call?

Me.

Yeah.

But it is, that is true, Joe. Like, it is because, The seller in good faith, right, is telling the buyer in their disclosures, this is what has gone wrong with the house and we've corrected these items. But at the end of the day, you're still buying a used product. Typically, it's not a brand new tract home. So these homes have been on the market for years. Like my home's 40 years old, right? If I go to sell it, I need to disclose all the failures that I've repaired and what I know to exist. But if you bought my and you move in, it's a possibility that a flood could occur, a break in the pipes. And with the home warranty, for $85, a tech would go out, diagnose it, and then if it was due to normal wear and tear, we would go out and fix it.

Nice.

Okay, so does it go all the way to the plumbing and electrical and all that kind of?

Yeah, so those are our typical systems. What I like to call systems is the plumbing, the electrical, the air conditioner, furnace, garbage disposal.

Okay. And yeah, I guess I am kind of picturing, when I think of home warranty, I'm obviously picturing new builds. Is that a different policy than what you would get on, you know, let's say like one of Joe's flips?

So if the home is going through an escrow transaction, the home warranty companies, we know that the agent is going to get an inspection. So our Risk factor is lower. So the lowest price for a home warranty is always for homes going through a real estate transaction. But you as a homeowner could obtain a home warranty at any time. Again, you just— and let me state, because I definitely need to state this, because a lot of consumers think, oh, I'm just going to get a home warranty because typically it'll be like $600, which is dirt cheap. for things you're using all the time, right? Well, the contractor, again, goes out and say you have, let me back up a little bit. Sorry about that.

Yes.

If you have, like you're thinking, oh, my dishwasher doesn't work, I need to replace it. I'm gonna get a home warranty for that. And you know that is not working. The contractor could go in and say, you know what? Dishwasher hasn't been working, as I can see that through the water lines, the calcification of the water has been there for a long time. So there's no way they use this, this dishwasher. And so there's indications to the contractors, and they have been doing their jobs for a long time, they could tell when something's been broken.

Mm-hmm.

So if you own your home, that's harder to prove. If they come out and they tell us that it's a preexisting condition, which is never covered because it was prior to the policy going into effect.

Gotcha. So as you're saying, that's why the inspection's so important.

Yes.

Because then you have that like starting line. This is preexisting. Everything off of this list is kind of fair game as far as, you know, calling the warranty.

Yes. As long, so like, I always like to give these examples. So like children, a lot of times, I know my daughter, she took my telephone when she was little and she tried to flush it down the toilet.

Mm-hmm, of course.

That's not normal wear and tear. So if that clogged up my plumbing and I called my home warranty company, it wouldn't be covered. So it has to be regular debris going down the toilet. And then if it clogs or backs up, yes, it is covered. And something else, like, really important is to always ask for the contract and refer to the contract. Because on the contract, like, Joe, you said this previously, you have to know what is covered, but more importantly, what's not covered.

Mm-hmm.

Because the confusion with homeowners insurance is always structural. Always, I get this call, and we don't cover structure. So, You don't want to incur that $85 service fee for us to come out when we're just going to tell you, oh, we don't cover structures, right? So you want to know what is not covered. The next thing is there's always limits on items. Not everything has a limit, but sometimes there is limits. Also, sometimes there's what we call in the industry non-covered costs. So the home warranty company strictly covers the unit that's failing or the part that is failing and the labor to install it. That's it. The homeowner is responsible to pay for everything attached to the failing item, going from the item to the home and from the home to the item. Or possibly like a water heater. It sits on a pedestal. So say we're coming in with a new water heater, the new water heater may be shorter or taller, and we need it to work with the house. So that pedestal would be called a non-covered cost, and the homeowner would have to pay that. Homeowners also are obligated to pay for codes and permits.

Mm-hmm.

Now, in our coverage, we do have some coverage for codes and mods is what we call it. But it's an additional option that you have to purchase in order to have those items covered. So it would reduce your non-covered costs. And hopefully that made sense because it's a big concept.

Yeah, no.

And I was going to ask you, since we're there, what additions Do you have, like, I know you don't cover washers and dryers.

Oh, we do.

That's in the package. Yeah, but isn't there an additional cost?

Yes.

Okay, that's what I'm talking about. What are the additional cost items that are not in the normal policy?

Okay, so we, this is very archaic for home warranties, but before we didn't have built-in refrigerators and things like that. So homeowners, when they sold a property, they would take their washer, dryer, and refrigerator with them sometimes, and sometimes leave them. And they still do that today. So we consider the washer, dryer, fridge as a movable item. So all the other ones, like your stovetop, your dishwasher, your built-in microwave, those are considered stationary appliances. So those are always included in the home warranty. The movable items of washer, dryer, fridge are an additional item that, as an option, you could have covered. And it's relatively inexpensive to cover all 3. For us to cover those 3 items, it's $120 for the whole year. You can't get that from electronic store, I'll leave out names.

Mm-hmm.

Where their warranties charge you a lot more And you don't have a point person like your real estate agent to call the rep, such as myself, and say, hey, the contractor who serviced this didn't know what they were talking about. So, which is another thing I'd like to talk about because we said home warranty is difficult. And I don't know if you want me to get into that yet. Go ahead.

Go ahead.

Well, so the difficult part in home warranty is we don't have control over individuals. Nobody ever does, right? Think about your spouses. I don't know what you're talking about. So with that being said, First American contracts with companies, the company owner, and that company owner owns his company. So say he does appliance repair, right? He's hiring and firing his own employees. So sometimes employees will come out and they may not be as educated as we'd all like, and this could happen in the retail world as well, and they could misdiagnose or not be the represent— the great representation that we would all hope they would be. So it's a people business, which makes it very difficult. So if the contractor misdiagnoses, You would call your real estate agent, or your agent would just refer you directly to me, and then I would look into, okay, what did the contractor say? And if it didn't make sense on what the failure was, then I'm sending out a second opinion at our cost. The homeowner is not paying the $85 again. And then we put the claim back on track, and then typically One of 3 things will happen after a diagnosis. So one, we're either replacing a part, or 2, we're replacing the entire unit, or 3, we get the denial. Every time we get a denial, people are upset. Nobody wants to hear something's not covered, even when we knowingly know that it probably shouldn't have been, like if our kid did put their rubber ducky down the toilet or their phone.

So, okay.

And, and you also have another way to resolve it because, um, middle of the summer, 120 degrees outside, air conditioning goes wrong. Send out your contractor, he misdiagnoses it. And so isn't there a way for either the homeowner or myself as an agent, uh, to call somebody else, a licensed contractor, and say, can you go out and See what you can do. They went out, they fixed it. Okay, so what's your policy on a situation like that?

So typically we want the opportunity to make sure that we've done everything correctly, 'cause sometimes people have different pain points, meaning patience, and we have to keep in mind what the demand is And if we do come across that crossroads where we're like, our contractor is not diagnosing correctly, then yes, First American needs to give the approval to utilize an outside contractor if you expect the home warranty to pay for it. So we can do that very easily. And I do have that done several times when we're in kind of a crossroads of maybe a unit that's not typical. So there are appliances that are specialized and contractors just don't know how to work on them. And then we need to actually go to the manufacturer and get a contractor directly from that manufacturer. And then as long as it's a failure due to normal wear and tear, we're paying for the parts and the labor, and then the homeowner would pay for anything else.

Got it. Okay. So it's more than one way to resolve an issue.

There's lots of ways to resolve an issue, actually. And it's really, it's, there's so many things that happen that I couldn't begin to start to name all of them. But the big typical ones is if you're not happy, contact your rep, contact the office and tell them you're not happy. If the contractor is not professional and rude, try to get their names. Like that's the biggest, obstacle that I have is because I want to know if XYZ company has a bad apple in their employee system, right? And I can't catch that person if I don't know who went out. And so the most difficult part is just having their name. And then if I get that, then we can then go to the owner of that company and tell them, hey, I'm just going to say Carlos, for example. Carlos is not a good— is not a good technician, and we've had Several complaints, then we will not allow that person to work on our on our policies.

Got it.

Yeah. So you have to yell at contractors too.

So I specifically don't.

Okay.

Our office does.

Oh yeah.

So we're you know like we're in constant communication. It is. It's like if you're young, Alex.

Thank you.

Joe will remember the telephone game where you gave a sentence. And then the next person, you just, you whispered it. Oh, yeah, yeah. Okay, you know that telephone game? So that's kind of how contractors work too.

Yeah, of course.

You know, it's like there's really a lot of miscommunication in home warranty as well, like from the homeowner to the agent or to the agent to the rep. And sometimes we just have to find out where the communication lies and what is actually transpiring on a claim in order to get back on track. And, um, and so, you know, that's just human nature though, and it can be corrected easily.

I think that was a roundabout way of just calling me old. What, don't you think? You remember, it started with you as being young, and then she went to— yeah, Joe will remember this.

He remembers the polio breakout.

Yeah, I'm old too, if that makes you feel better.

Oh man, wow, there's a lot in this that People aren't even seeing going on behind the scenes.

No. And that's a great point because I'd say 90% of what consumers don't see a real estate agent do are behind the scenes.

Yes.

You know, there's a lot of stuff that an agent does that a normal consumer has no idea. And that's honestly, that's great because if you're a good agent, you're not gonna, you know, discuss any of these bad things. You're just going to make sure that the transaction ends up closing at the end of the day. So that's, you know, hallmark of a good agent. But yeah, there's, I mean, when I get a call and it's a home warranty issue, I'm on the phone to Rosie.

Yeah.

Rosie, can you please take care of this for me? You know, I don't want to hear this complaint anymore. Whatever you can do.

Yeah.

You know, and we were talking about, you know, relationship. This is a relationship business.

Yes.

You know, and when I call, Rosie answers the phone. She says, Joe, hey, how can I help you today? You know, not, you know, Alex. Alex who? We just met today. It's like, who are you, Alex? You know?

Yeah.

So I'll get there.

Yeah, you'll get there.

And one of the most important things, like, Joe, you're really good at this, is providing the new buyers coming in and on the policy their phone numbers and email addresses. And that is like critical, because I do have floods happening when they're moving in for the first time.

Ouch.

Yeah, those are the tough ones, because, and that's another reason why people get upset with home warranties, because it's never convenient, or, and it's very emotional. Nobody ever wants repairs in their home.

And quick question, what, what do you cover?

What, in piping?

Yeah, in the plumbing. Yes.

So we cover the leak in the pipe within the foundation of the home. Now, with that being said, if it is encased in concrete, concrete in the footprint of the home, it is limited to $1,500.

Okay. That was going to be my next question.

If it's in drywall, Okay. There's no limit.

Ooh.

And we do a rough dry patch.

Mm.

Now, I see that ooh going on. So with ooh, it's not always ooh because we, no home warranty company will re-pipe your entire house.

Why?

Because what do we repair? The failure, the failed item. So say in this wall, we have 2 pinhole leaks. Yes, covered, not a problem. But if we're encased in cement, it should be a re-pipe. So we're not re-piping your home. The coverage is limited to $1,500.

The 2 pinhole leaks would be covered, create damage to the Wood flooring, is that also covered or no?

So we cover the pinhole leaks and patch to a rough dry finish. No paint, no texturizing, nothing like that, but we'll patch it. The secondary damage goes to home insurance companies. They do the catastrophic, cosmetic, structural. Damages.

Yeah, so you just repair the immediate problem, damage, whatever that is.

Failure to the system only.

Yes.

And failure to the appliance only. That's it.

Same thing like with a roof. I know that's an extra coverage.

Yes.

And it's also limited as well.

Yeah. So for $100, um, we will do a patch due to normal wear and tear. And what's normal wear and tear on a roof? Raindrops coming on it. So not, my son was hanging up Christmas lights and put his foot through the, through the roof. That's not normal wear and tear. You shouldn't be walking on your roof. Okay, so see, we could make it normal. I see you two collaborating.

It's like, no, I normally walk up on the roof. That's normal for me.

Yeah. Okay. So that's a lot clearer.

Yeah, you know, and it's— and there's always like, we don't really think about it, but if you start to break it down, it is very— it's common sense.

Yeah.

But when you're in the heat of having sewage coming up through your showers, things are not so, so logical to the person experiencing that. And so that's typically where home warranties get the bad rap.

Yeah.

And they're like, we can't come out fast enough.

Right.

Because if we do not advocate or do the process correctly through a paper trail, we're audited as a company and we have to show why we paid out. And if any of you out there watch Ozark, money laundering, So that's why we're audited, because we have to show why we're paying out. We're paying out to people, right? And so we have to justify the repairs that are happening through a licensed contractor's diagnosis. You look confused.

No, I, I like the Ozark reference because, yeah, they were doing that there.

You have to buy it.

But I never— honestly, I never thought Even close to that issue around here. I mean, just doesn't make sense. Maybe in the Ozarks, but not around here.

No, I'm just saying that we have to show the process and why we're paying it.

Yeah, I mean, you know, if somebody calls and says, hey, I've got a hotel room, that's, I guess that's another question. What do you do with home warranty? What do you home warranty? Just single family?

Just single family, multifamilies. Meaning like fourplexes, elevenplexes, plexplexes, but we don't do apartments.

Okay.

So the reason, and the biggest differential would be shared systems. So like in an apartment, if they have a plumbing leak or an air conditioning, it's usually a big, you know, air conditioning commercial unit that is running the whole complex. We don't cover those individuals. So like individual water heaters and air conditioning and furnace. And then, and we do ADUs, casitas, guest house, that's an extra.

And so—

See, that's how I know them, casitas. ADU is like, oh, that's just a new name for these millennials in my life.

Yeah, it's like UFO.

Yeah.

Because he's old.

Because he's experienced.

Here we go.

Now, is it similar to insurance policies to where if someone files multiple claims, you're just cutting them off? Or, because there's this thing going around with the insurance where it's like you file a claim and they're like, all right, we're not going to insure you anymore.

Well, the good thing with home warranty companies, we don't document. So, I mean, let me strike that. Striked.

Oh, okay.

Because that came out wrong. What I mean is we don't hold that against a person. Like, say they had 20 claims on their property and then they go to sell the property on the next person, they can— we don't have a history of what the prior person put on their claims.

Gotcha.

Really? So it's— yeah, we don't do that.

But there's a disclosure on the disclosure forms that says if you had ever had any insurance claims with you—

That's homeowners, not us.

Because we're considered—

We're actually not considered an insurance company. We're a warranty company.

Yeah, but it is an insurance company, is it not?

No, it's a warranty company.

It's an insurance company.

It's a warranty company.

You know, they charge you a fee and they hope you don't use it. And then this person uses it a little bit. And at the end of the day, they add it all up together and they made money that year.

Sure. If you want to make it that simplified, but it's more complex than that.

Oh no, it's not.

And Alex, kind of to finish up with you. So have we neglected or have we opted to not renew policies? Yes, that can happen. Like if somebody is abusive.

What's the reason?

Usually if somebody's abusive to, the customer service and all things like that. Then, and within reason, because we know people, this is emotional. But if we try to reason with the person and they're just constantly not being human, then they can be dropped. Okay.

So, but now being a rep, are you front-facing to, like, do people have access to your phone? If they have something going on, they can call you.

Say no.

I still won't say no. Oh no, I'm just like, is this happening?

This is just for the agents, okay?

Yeah, don't, gosh, don't put her in that position.

No, say no.

Okay.

It's funny 'cause we had one of our guests here a couple of weeks back and at the end we say, okay, do you have any social media people can contact you? And he says, no, I don't want, I don't like people. I don't want them to call me. Just have them call Alex.

Yeah, actually, yes, I'm very accessible.

Okay, okay.

I get very busy.

No, no, I get that. So I'm just saying you're dealing with these emotional people.

Yeah, but I would rather if I have their policy, then yes, I— and they're not happy, I do want to hear from them.

Wow.

Now I'm not a miracle worker, and I am a sales rep, so, um, you know, I can say listen to what they're telling me, but then on anything there's always two sides the story.

Mm-hmm.

Because this is a warranty company, they are documenting everything. And a lot of times we can have something like the contractor's gone out, tried to install something, and the homeowner wasn't home. And we have to pay every time the contractor goes to the home. And, you know, and the homeowner's not there, you know, and they're complaining, well, why can't they come tomorrow? Well, because we have calendar out, you know, they're, Their workload is calendared out, and we don't keep their calendar because we're working with multiple companies doing the same job. Right? So there's there's a lot of facets that happen, and homeowners can be upset. More than likely, it's because the process isn't understood, and I would. I would want them and encourage them to call me if they have a misunderstanding. And the best thing is for them to make sure they have a copy of their policy.

Mm-hmm.

And when they're putting in a request, they're looking underneath that section, 'cause the way the contractor is— contract is laid out is under sections. So plumbing, water heater, appliances like refrigerator, pool coverage, roof coverage, it's all in a section. And the first part says covered in bullet points, what we cover for that item. And then underneath it says not covered.

Mm-hmm.

So if you call us out and it's in the not covered section, you know, shame on you for not reading the contract, right? And then it'll also say note if there's any limits, like I said, with the slab leak. So.

Nobody's reading that contract.

I know nobody. Does anybody read?

No, they're just, no, something breaks and they're like, hold on, let me call Rosie. Hold up. The tree fell on the house. They're like, just give me a new house. Like, that's how the warranty works. Just send me the new house. It's like when you're on Amazon and then they, they ask you like, do you want this 3-year warranty, you know, to get the new one? That's what they think it is. Yeah. But there's— it's a lot of nuance in there.

Yes.

Yeah.

Yes.

With any warranties, honestly, there's always limits and exceptions and you don't read it until something happens. Then that's when you educate yourself.

Yes.

Yeah. Yeah, no, I'm guilty of it too.

Yeah.

But, you know, like important, like I said, are things that are definitely not covered are preexisting, missing parts. So, you know, something will not work because it's missing a part. I had actually a claim where the garage door spring broke and the homeowner, The guy, he threw it away in the trash. Missing part, not covered.

Oops.

And we cover for springs.

Oops.

So if he had the spring still—

The broken part, you just keep it.

That's when you go over to your neighbor and say, hey, can I borrow a spring?

Yeah, exactly.

Can I borrow your spring for a minute?

Here's your old spring.

Yeah, here it is. Here's the spring. Oh, well, that one looks good. Let's just put this one back on. Oh shoot, that didn't work either.

Yeah. Okay.

Yeah. Misuse, like I said.

A lot of misuse.

Is there, is there like a lot of fraud? Because I mean, in title, there's a lot of fraud, but do you see a lot of fraud going on? I mean, that's a perfect example. Let's go over the neighbor and grab his spring, you know?

Oh yeah, you're trying to get one over every time.

Yeah. Is there, do you see a lot of that or, or do you suspect a lot and can't prove it?

Yeah, well, I can typically, when I'm talking to somebody, I can typically tell what's kind of transpiring, you know. Um, but again, I, you know, I'm not there. I'm, I'm more of the customer advocate compared to the office. The office is more black and white where they're just reading off a contractor and contract and saying nope, you know, or yes, where that's the calls I get. Because when we live in the gray, that's typically where the customer is calling you and then you're calling me and then I'm trying to gather the facts. And sometimes, yeah, I would say some, you know, like homeowners even do that. Like they'll get on the call and they'll try to place a claim and they'll say, Mm-hmm. When I was going through my inspection report, the inspector said the air conditioner wasn't working.

Ugh.

See, they incriminate themselves. That's what it is.

Yeah. And so, or they say, when we were on our walkthrough, the faucet didn't, you know, wasn't producing hot water, you know, wasn't. And then, then right there and then, before the technician even goes to the house, it's denied.

Let me ask you, do you— not you personally, but does your company even go through the effort of— I called and I tell you we didn't do a home warrant. I mean, we didn't do an inspection on this property. Do you like look up that, uh—

Nope.

And then call Alex, who's on the other end, and then Alex says, oh yeah, we did one. You want it? You don't go that route.

I've actually never had that happen, but I've had homes that don't have inspection reports.

Yeah.

And then when they're trying to debate— so the inspection report should only be used on denials, never for anything else. So if there's a denial and I'm trying to prove that it was working prior to the close of escrow, that's the only time I'm asking for that inspection report.

That's awesome. That's the way it should be. Yes.

Yeah. So you— so, and then a lot of times people will say, do you want me to send it to you? And typically I say no, because now we have a history of the entire house. Oh, you know. So, uh, oh, she is good. So that's why she's here.

Yeah, yeah, that's why she's here.

I'll probably be fired.

What do you— what do they send you then? Just that page that says AC?

So we do not— in order to get Or if a client wants a home warranty, we do not require anything. Just—

No, no, I understand. But let's say the AC goes out and you deny the claim for whatever reason.

No, no, only if it's because of pre-existing, meaning it wasn't working. Okay, that's—

but how did you figure that out?

The tech did, because—

Okay, okay, so then the tech figures that out. And then I'm the homeowner and I say, well, I had a home inspection and it was fine.

Yep. Then I'm saying send it over.

The whole thing or just that page?

It has to be the whole thing.

Oh, see, now I'm on the hook for—

But then you redact it.

Refrigerator not working, the washer and dryer not working.

You can redact all that.

Got it. Okay.

Yeah, but typically on like big items like air conditioning and stuff like that, You want those covered because that, you hit a home run when you get an air conditioner, furnace, or water heater replacement.

Yeah.

Because even though the policy may have cost, say, $900, out of that $900, only $100 is the air conditioner for the year. So for $100, you're getting a new unit, And you're having that installed, you want that covered because you're saving a lot of money.

Absolutely. Yeah. So yeah, I think it's a good deal. I really do. I think it's a great deal.

And it's a renewable contract.

It's a peace of mind thing too.

Yeah.

You know, you can sleep really good at night knowing that something breaks, you can call Rosie because, you know, you know her personally now. Right. You know, because remember that podcast that those 2 guys did. She gave her phone number.

Yeah, exactly.

Instagram and all that sort of stuff.

Right.

Yeah.

I really don't do social media because I don't have time. But you can Google me. You got my email and my phone number. So yeah.

And I'm sure First American did that for you. I know you're on the website and your high school photo is on there displayed.

Wow, that was like a touché for all those old comments.

Yeah, just, just, well, just like the— it's just a, it's a real estate joke. It's like, yes, you know, everybody who is in the real estate industry has a business card, puts their high school photo on their cards, you know. It's like, oh wow, what's this? Like, is this you really? Yeah, right. Isn't that true?

Well, and then The editing doesn't help.

Oh yeah, now they got all the Photoshop.

Yes, the Photoshop.

That's good. Yeah, it's true. You get catfished is what they call that. You think you're meeting up with one person and it's somebody else.

Wait a second.

So Joe, is that really you?

Is that really me? I don't know. Take a look.

Oh well, I mean, I don't know how old my photo is.

I think it's It's not that old. It's 2017. So that's not that old.

Getting there. But you know, you're gonna need—

you're gonna need—

but once it hits 10 years.

Yeah, as you get older, you look older.

Yeah, usually.

Genius.

What I meant is like, when you're like from 20 to 30, you kind of look the same.

Right.

Yeah.

But then when you get like 60 to 70, yeah, the years like pile on.

Yeah, the aging process.

Yeah, it multiplies big time.

So, yeah.

So what is the—

I'm only 50, by the way, just to let people know.

What is the recycling of your picture then on this debate? Every 5 years? Every 10 years?

Old Joe's at 7 at this point.

I'm at 7? Yeah. Yeah. 7th, 7th. I'm okay. You've seen my picture. Am I okay still? Yeah, you're good. Yeah, I'm okay.

You're good.

Yeah, I mean, no, I'm not 25. I'm, you know, 50.

I'm older than you. A lot older.

I don't think so.

Yes, I am.

No, I am not 50.

Oh, okay.

You missed that part. Yeah, I'm not 50. I am older than you.

Um, okay, wow, this was really enlightening. And, and the title was, you know, Protecting Your Biggest Purchase, which is Kind of the whole deal here. But people, are people opting out of the home warranty? Like, are you seeing that?

They do. When they get discouraged about, you know, like they don't want to wait, you know, they'll opt out, which I think is really, that you should never do that. You should always call your rep and discuss it with them because they can definitely help you in the process. And like, if you're disappointed, You need to know, like, maybe you can have an outside vendor look at it, give us a diagnosis, and we can then turn it in for review. You know, so there's a lot of options that the reps can do to help. And then just having a clear understanding of the coverage is really, communication is really difficult 'cause we're all moving towards the AI stage. And, you know, it's harder and harder to talk to people.

Right.

And that's really what I'm here for is to get a clear understanding and have those questions answered because we do want you to renew your contract. You know, it's usually in the first year, we usually have 3 claims to every contract.

Really?

Yeah, we lose money right off the bat from the first. So we make our money actually on the second year.

Yeah, because you fixed everything.

Yeah.

Yeah, it's nothing else to claim after that. You know, 3 things, what, dishwasher, Leaky faucet, you know, whatever, something else. It's like, okay, well, we fixed those.

Yeah, we're good.

Yeah, we're good. Yeah, just send us your money, please.

Yeah, but we have like rehab, we have rekey service, which is really a great deal where a homeowner can have their locks re— the combination within it. So the tumbler within the hardware can be switched out to a new combination. So that way the old seller doesn't have the key and you get keys for that lock. So we do up to 6 doors that we can change out. And then for each door, you get 4 keys with that. And so that's a really good deal for $85.

Nice. Yeah.

And then we have pest control. So we cover—

Pest control? I didn't know you had pest control.

We do. They cover the The creepy crawlies, no flyers. And so that's a really good one too. So if you see spiders and things like that, ants, you can call that out.

How about pigs?

We don't cover for pigs.

You don't cover pigs?

No.

We had a pig on one of our flips recently. It was left in the garage.

He was left there?

Yeah, but the owner finally came back. Oh, but I was like, You know, tossing the idea around of having a luau.

Oh.

You know? Oh, yeah. But that's what Lauren said. It's like, come on.

You guys are highly intelligent, by the way.

They finally came back and picked it up.

How big was it?

It was big. Twice the size of this table.

Oh, wow.

Sleeping in the garage.

Oh, poor things. That's not cool.

Yeah. No, it wasn't cool. No, it was weird. No, we had to evict them as well.

Yeah.

Yeah, the sheriff came over and evicted them. He says, I'm not touching that pig. No way.

Yeah, that makes sense. And bringing this, you know, kind of full circle back to investors, um, how can, you know, people have rentals? Can they— is that, is that harder to get the claims through for the home warranty? Because renters' normal wear and tear Is pretty insane sometimes.

So we do work with property managers.

Okay.

And so the key there is if you own a home and you have a property manager managing your properties, you need to have the property manager on the policy or give them the right to speak on your behalf on your repairs. So a lot of my clients live in other countries. And so they have property managers here, but they have to put them on to be, for us to actually communicate with them and be able to say, like, they get a cash out or something. It always goes to the policyholder, not the property manager. So we need just the, like, an e— simple email telling us that, you know what, I, I would like Joe to manage my properties and I give him right to speak on my behalf. And then Joe's good. Then Joe could place claims.

I'm good.

And, you know, like we could take payment from Joe and do things like that.

I'm good.

Okay. I mean, it's good to know. I don't think— what about mobile homes? Do you cover mobile homes?

Yeah, we do.

Oh my God.

We cover mobile homes.

I've been screwing up this whole time.

You have been.

Yeah.

You're just learning.

I am just learning so much.

Smartie.

Oh, I've done everything wrong. Okay.

But no apartments. No apartments.

No apartments.

Okay.

No.

Gotcha.

Yeah.

Okay. So you guys opt into this, you know, get your home warranty.

And you can get it anytime. It doesn't have to be for a sale.

Right.

I mean, I could have owned this place for 10 years and call you and say, hey, put a home warranty plan on this. Okay. Yeah.

And in fact, I feel like when the properties are older, as they are, our infrastructure is getting older, a home warranty policy will help soften the burden of the repair cost or replacement. So maybe it won't pay 100% of what you expected them to do, but it's still giving you money. And we all would like a discount. I always tell clients it's like getting a big coupon and to go get what you want. So you can always ask for a cash-out option in lieu of repair if it's approved.

Okay.

Like if the repair is approved, you could ask for the cash out. So I get mostly on water heaters, homeowners will say, oh, you know what, we were thinking about getting a tankless water heater. Great, just cash out and go get your tankless and just show us the receipt that you installed a tankless. Now you're insured on the new unit.

Oh, that's cool. That's nice. Yeah, that's very nice. Yeah. Anybody online? Yeah, we got 2 people.

All right, ready?

Yeah.

Okay, we got Liz says hi.

Hi, Liz.

Hi.

She's chatty today, isn't she? Hi, Liz.

Chad says let's go.

Where are we going?

I think he's just, uh, he's pumped.

Okay.

And then we have a question from Stephanie. What is the craziest item you had to get covered by an insurance claim? The craziest item?

Yeah.

So it's pretty vanilla with the items that we cover. So like I said, it's strictly appliances and systems. There's never any like crazy item that we cover.

What's the weirdest claim you ever got? Like where you had to go and do an investigation or something like that? They, they tried to pull one over on you and it never happened. Maybe I'm making it like—

Yeah, you're really putting me on the spot because it is privacy issues I have to be worried about.

No, no, I mean, just be like, this, this old lady called in, or, or this, this, this guy called in and he said this thing broke, and so we had to go out there, and then he tried to, you know, fake, fake the scene and Does that ever happen?

Usually people aren't that malicious, but they know it's broken.

Yeah.

And I know I'm pretty boring. No, no, no, no, no.

It's not, I'm just—

Nothing exciting.

I've been watching too much Cops or something.

I think so.

Yeah.

Sopranos or something, you know?

Okay.

Yeah. Yeah. Like typically when things break, they're pretty sudden, right? And then people just want them repaired right away. I'd have to say water heaters are a tough one because depending on The water heater depends on, you know, like the supply house. And COVID still creates a lot of issues in regards to the backlog of equipment where people are like, oh, we've been out of COVID for, you know, 2 years now. Or, you know, and it's like, it doesn't matter. It's the ripple effect.

Yeah.

Manufacturers also found out that they make more money Making cheap products and having you have to go buy a new one. So you're seeing more replacements than you are seeing things that last forever, like we did in the past.

I have one. I have a Wolf appliance stove. Okay. Your contractor goes over there and says, I can't do it. This is it. Last day. It's, it's done. He sends you back a report, need to replace it. Do you replace it with a Wolf or do you replace it with a Maytag?

So how home warranties, and every home warranty works the same with similar features and functions. So it could be a Maytag. So here's the deal, the caveat. At First American, under our normal policy, we have an aggregate of $5,000. But if you pay $100 more for Appliance Plus, the aggregate goes up to $10,000.

Oh, this is where they get you. She didn't tell us that.

I want to get all the bells and whistles.

Yeah.

My policy is going to be like $15,000.

For another $100, it's like, heck yeah, let's do it.

Let's cover it. Yeah. So that's, you know, it depends on the options. So a lot of times when agents are negotiating contracts, And it's a competitive market, they're putting a lower amount for the home warranty because they want their offer accepted, right? So, but keep in mind, as a consumer, if you are the buyer coming in, you could actually add those additional options and you just pay the difference and then you can get the best coverage.

Especially since we know about it now. Yeah.

I'm going for the plus option for sure.

May as well. Yeah. Especially if you have a Wolf appliance in the home and all the bells and whistles and you get a Viking then.

So let me tell you another one.

Viking. Yeah. Okay.

Size. Size matters.

Oh, the debate is over, everybody. The debate is over. It's no longer about the motion.

So here's the thing with home warranties. Size, we do not match for size.

No?

No. Has nothing to do with size then.

Why?

Because, because over time, units come in and the manufacturers change the dimensions to the units. It's completely out of our control.

So how do you compare? If I've got a 21 cubic foot refrigerator, You're not going to replace that with a 17.

No, but if you're— what did you say, 20?

21.

21. Like, if we can't find a 21, we're offering one that's similar in that size. So we're trying to come as close as possible.

Okay.

But we may not be able to match it.

Got it.

And it's just because the manufacturers out there Aren't producing it anymore.

Yeah.

So it's out of our hands. So what clients can do is ask for a cash out and then they can do whatever they want. So, but this becomes an issue because now we're dealing with cabinet sizes and things like that where modifications might have to be done to the cabinets, which is what? The homeowner's burden.

Correct.

So they get mad at us because of that as well.

Got it.

Yeah.

Okay. Well, yeah, we settled the size issue there.

Definitely.

So you're talking people off the ledge every day?

Yes.

Oh my gosh.

Yes. I am the goddess of chaos.

Wow.

And so you're just like, I understand. I know you're going through something right now.

And they're like, yeah.

That's a typical day?

Yeah.

Oh my.

She's doing the Lord's work and we have no idea.

She is. Oh, absolutely.

And it's like no one's thanking you.

Is anyone stressing you? Just thinking about this.

Does anyone say thank you?

I thank you.

Thank you.

I thank you. Thank you.

We hear the podcast. Thank you.

Yes, we thank you. Thank you. Yes, we know how it is to get yelled at, right?

Oh yeah, I love it now, but you know, she shouldn't have to go through that. Nobody should have to go through that, especially if they're like standing in sewage or whatever, like you said.

Then they're Yeah, like I don't take it personal, and I understand.

See, that's hard. That's hard to do.

Like yeah, but you have to learn how to.

Oh yeah, you learn. Yeah, it's a skill.

Yeah, it is.

It is.

Boy, if you take it personal, you may as well not.

You can't what you're doing.

Exactly. You can't. Exactly. No.

And so that's why there was a job opening that one day.

Yes.

Someone was finally like, you know what I'm out. They're like Rosie, we have. We have the perfect job for you.

Yes.

We'd like to talk to you.

Rosie, she's been bouncing around the office and like, maybe we'll put her here.

Well, trust me, I had no idea when I got this job. I had no idea the intent of it.

Of course not.

But it is fun.

They didn't tell you. You know, Rosie, yeah, are you gonna get a promotion? You know, you're gonna get all these things. Don't, don't tell her. Don't tell her. Oh yeah, Rosie, it's like really exciting.

Yeah.

Don't tell her.

Don't tell her.

Wowzers. Okay. Well, I mean, what can, what can the audience do to, you know, help you or bring you more business or what, what do you need these days?

Yeah.

If you need a home warranty, I'm here to help. Okay. You know, like if you have multiple properties anywhere within the United States, except for remote areas, we could pretty much cover it.

What about 84 in Alabama?

I have to check the address. I don't know where that is.

No, 84 properties.

84 properties.

In Alabama.

Bring it on.

Oh, okay.

And we even do new construction. So our new construction policy actually can start the first year. So I do a lot of model homes for builders where they're trying to just get out of the track and just finish up the project and move on. And then I also do NewTrac homes. So you can start that policy the first day after close, or you can start it the second year, because sometimes on NewTracs, they, the builder will cover the first year, and then you can have it covered 2 to 4 years. So you get a total of 5 years covered.

Nice.

Yeah.

Wow.

And it's really at a reduced price.

That's amazing.

That's good.

So you guys heard it here. Cancel your current policies and go make new ones with Rosie and make sure she's your rep. Thank you so much.

Thanks for having me.

I learned a ton.

Oh, thank you.

Yeah.

I hope I didn't bore you too much.

No.

Are you kidding?

No, it was exciting. Yeah. Yes.

I mean, home warranty is exciting. So it is exciting.

Yes.

You need it, really. Yeah, I mean, hey, it's exciting!

I'm back, I'm back! That's exciting.

Well, it's just good to know because it's like the stuff no one ever thinks about until you need it, and that's too— then you're too late at that point, and then you're just— yes, you're not doing it right. So, well, we'll have you back on if you'll have us.

Yes, of course.

Thank you for coming. It was Very nice of you to do that.

I appreciate it.

Take an hour out of your life and meet with us. Yeah, that's very much appreciated. Thank you.

How can people get a hold of you?

So my phone number is 949-400-7789. And like I said, I get very busy, so email is always best with the full property address in the subject line and just simply say, hey, I'm having a problem. You know, the contractor didn't show up. Or they're not covering something and I don't understand, that allows me to contact the claims department and then I can get the details and then see if what the outcome was justified or not. And if it wasn't, we will correct it and move it back on course to have a closed transaction.

What was the email address?

Oh, my email is rpool@ So that's R for Rosie, pool like a swimming pool, E for excellent, at our acronym, FAHW for firstamericanhomewarranty.com.

Perfect.

Nailed it.

Yeah. You're going to be getting a lot of phone calls and a lot of emails.

I hope so.

Yeah. Okay.

Bring it on.

Bring it on.

Yeah.

There you go.

Cool. Well, we'll see you guys at the meetup and next Thursday as well. Got another guest coming in. It's going to be awesome. Thanks for joining us, and we'll see you on the next one.

Thank you. See you later.

Thank you.

If you want some more advice on real estate investing, reach out to us one on one.