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Ancient HVAC Systems | Home Warranty?

1,636 Views | 24 Replies | Last: 3 yr ago by ATM9000
El Hombre Mas Guapo
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5:24p, 12/2/20
AG
Hey TexAgs -

Buying a home in San Antonio that has (2) 22-year old Trane HVAC systems. The "run" but had one frozen up bad during the inspection (repaired by seller - the on/off toggle was broken and replaced) so I've been wary ever since and we had (5) HVAC companies out to inspect the unit. All say that they have to get replaced, and that they won't last the next summer.

With that said, we're trying to negotiate a haircut ($400k home - $16k price redux) and the seller's wouldn't entertain the idea. Trying to go back at $10k to get some relief for the dated systems, but not feeling optimistic. I'd be happy with $7,500 - the latest quote to replace both system (single stage, 16 SEER RUUD units) is about $12k.

The seller's agent, my former agent, the people I work with who have spouses that are realtors, pretty much everyone I ask, say to just buy the house and have the home warranty replace the units.

I always thought they were BS. Am I taking crazy pills? I know it's not easy and you have to fight them - but is it realistic that I close on a house, get a $700 home warranty, and have them just replace $12k worth of systems?

What are the odds they replace the systems?

Need to make a decision to stay or walk in the next 48 hrs or so...

What Home Warranty companies are respectable (if any) in SA?

Thanks TexAgs!

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Martin Q. Blank
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In reply to El Hombre Mas Guapo • 5:29p, 12/2/20
El Hombre Mas Guapo said:
Am I taking crazy pills?
The realtors are.
Quote:
I know it's not easy and you have to fight them - but is it realistic that I close on a house, get a $700 home warranty, and have them just replace $12k worth of systems?
No.
Quote:
What are the odds they replace the systems?
zero
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El Hombre Mas Guapo
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In reply to Martin Q. Blank • 5:43p, 12/2/20
AG
Martin Q. Blank said:
El Hombre Mas Guapo said:
Am I taking crazy pills?
The realtors are.
Quote:
I know it's not easy and you have to fight them - but is it realistic that I close on a house, get a $700 home warranty, and have them just replace $12k worth of systems?
No.
Quote:
What are the odds they replace the systems?
zero


Damn. I figured there's no way it's a "don't worry, the Home Warranty has your back" type of thing.

IDK why these people (who I trust) are so adamant that it's a good option
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The Fife
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5:47p, 12/2/20
I'd give you slim odds on replacement and if so it would be the absolute cheapest one, done by the lowest bidder, and you'll pay out the nose for endless "code updates" that are never covered and at a price premium because that's how the contractor comes out ahead on those kind of jobs.

I could also see them limping it along for as long as possible by throwing parts at it and making you pay for it through the deductable or possibly again with the code changes thing. Often times you'll get to wait a good long while for someone to come out and have a look as well.
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The Fife
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In reply to El Hombre Mas Guapo • 5:48p, 12/2/20
El Hombre Mas Guapo said:
Martin Q. Blank said:
El Hombre Mas Guapo said:
Am I taking crazy pills?
The realtors are.
Quote:
I know it's not easy and you have to fight them - but is it realistic that I close on a house, get a $700 home warranty, and have them just replace $12k worth of systems?
No.
Quote:
What are the odds they replace the systems?
zero


Damn. I figured there's no way it's a "don't worry, the Home Warranty has your back" type of thing.

IDK why these people (who I trust) are so adamant that it's a good option


Because 3% x 400K is a good chunk of change!
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Diggity
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5:48p, 12/2/20
AG
Find a new agent
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aggiepaintrain
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5:52p, 12/2/20
AG
I think $7500 is very reasonable depending on the comps, if you love the house I would not lose it over $7500 though

Interest rates are low, won't be forever.



FJB
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DannyDuberstein
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6:28p, 12/2/20
AG
Home warranty will patch and patch and patch and will never replace a whole system. Every time you need them, it will be at least 48 hours between when it breaks and when someone can come out. Then you'll pay them $85 per visit. They won't pay when you need refrigerant recharge, which will probably run you another $200. And if by some miracle they do replace something significant, there will be something that isn't "up to code" and they will charge you out the ass for that portion of the job.
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El Hombre Mas Guapo
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In reply to DannyDuberstein • 6:36p, 12/2/20
AG
DannyDuberstein said:
Home warranty will patch and patch and patch and will never replace a whole system. Every time you need them, it will be at least 48 hours between when it breaks and when someone can come out. Then you'll pay them $85 per visit. They won't pay when you need refrigerant recharge, which will probably run you another $200. And if by some miracle they do replace something significant, there will be something that isn't "up to code" and they will charge you out the ass for that portion of the job.


Great insight. This is why I ask you gentlefolks.

Yeah, going to go with the haircut approach vs hope certificate on the Home Warranty.
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DannyDuberstein
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6:50p, 12/2/20
AG
I'd be very happy to get $7500 if I was in your shoes, and would be willing to back down from there. A 20+ year old system is pretty easy to spot without an inspector, so IMO it's a bit like expecting the seller to replace old kitchen appliances or old carpet that you knew was there when you made the offer. I don't begrudge you at all for trying though. They need to get it in working order, but once that has happened, I'm of the opinion that the original offer should have already incorporated a discount for the fact that the ACs are older than dirt. I've also found that many AC companies (who want to sell you a new AC) will tell you "that won't last a year" when that isn't really true.
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Diggity
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6:52p, 12/2/20
AG
You hit the nail on the head with your OP.

These folks wouldn't be in business long if all you had to do when your HVAC was breaking down is buy a $500 policy.

I don't love warranty companies by any stretch but the biggest issue I see is with folks not managing their expectations. Agents are a big part of that problem.

Any listing agent that tells you to rely on a home warranty for these types of repairs is lying and any buyers agent that agrees with them is an idiot.

You'll hear stories about people who somehow got a new system for whatever reason but know that they are the exception to the rule.
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KDubAg
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7:09p, 12/2/20
AG
Pretty much what everybody here has already said.

They won't replace it just because. Our first house many years ago, that's all they did was patch and patch and patch the problems. Eventually they couldn't patch the AC condenser anymore so they finally replaced it but it wasn't top of the line condenser or anything.

Going half isn't a bad idea if you really love the house. Good luck.
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Texasclipper
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In reply to DannyDuberstein • 10:01p, 12/2/20
AG
DannyDuberstein said:
I've also found that many AC companies (who want to sell you a new AC) will tell you "that won't last a year" when that isn't really true.
My house has 2 heatpump units, one of which is almost 22 years old. I was told 5 years ago when the capacitor blew that "it won't make another summer". And yet its made 5 since then with no breakdowns. Its a Bryant builder unit.

Will yours break next summer? It might. Or it might chug on a few more years.
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Rice and Fries
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6:48a, 12/3/20
American Home Shield (AHS) is a decent home warranty, gives you decent coverage and that ability to research contractors before you file a claim with them.

We bought a house with a system installed when Michael Jordan was still playing in the NBA and had the home warranty pay for a few repairs. One was a gas leak in the attic, a broken fuse on the Unit, the other was a broken capacitor on the upstairs unit. No real issues, good work by the companies that came out (I researched them via Google reviews).

Then our AC broke in the beginning of June. Called AHS, the system wasn't working. Had a pregnant wife who was unhappy. Had some AHS yahoo's come out, basically said it needed to be patched up with a new circuit board. They weren't gonna be able to find a new one cause the system was so old, so would have been a used one. All this was gonna cost $1500 and that's all AHS wanted to pay. Refused anything else and so I said F it.

Don't expect the Home warranty to replace anything. But for minor issues, it'd be ok. If you want to ever drop them, be prepared to waste an hour on hold just to get some one who will spend 30 minutes trying to convince you to stay.

Just save some extra couple hundred a month into a sinking fund and wait till the AC goes out.

Also. Check the ductwork. Ours was so bad and old that we had to have new duct ran because the old homeowner did such a ****ty hackjob originally.
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Rice and Fries
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6:50a, 12/3/20
Pro tip: use the expected repairs and replacement cost as a reason to drive down your tax assessed value. Bexar county loves them full PUrchase price reassessments on sales. So anything you can use that's issues with the house to drive that down can help.
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drummer0415
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7:14a, 12/3/20
AG
It's absolutely acceptable to ask for a discount on the asking price due to old AC systems. I did it.

My house has two complete systems. When we first toured it I knew the systems were old. Upon inspection I found out they were something like 18 and 20 years old. So I got a quote from a company for two basic systems (I think they quoted Carrier) installed for ~$10k. We made an offer on the house contingent that they either replace both systems before we close, or after closing they cut us a check back for $10k and I would take care of replacing them myself.

At first the seller declined the offer, and we walked. We weren't ready to shell out for new ACs right after buying our first house, and we didn't want the potential of them crapping out hanging over our heads, so we said ok we'll find another house. Well the seller ended up changing their mind, and a few days later we got a call back saying they would accept our offer and cut us the check after closing.

We closed, got a check for $10k, and I put another $2k from my pocket with it to upgrade from the basic level systems to two complete Trane systems installed for $12k. Got the new systems installed that week before we even moved in. (For reference on the pricing, this was in 2014)

Now I'm not saying it's common, or guaranteed to happen, but it's not a completely unreasonable request, and sometimes it can work out. Also, this was a $200k house and they cut me a check back for $10k. If the seller of your $400k house really wanted to sell, $10k out of their portion is nothing.
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one MEEN Ag
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In reply to El Hombre Mas Guapo • 9:46a, 12/3/20
AG
Keep their feet on the fire.

There is no way that home is getting sold without some credit on an AC system. If your deal falls through, the next person up is going to demand the same. The sellers are hoping there's a fool with a 400k loan burning a hole in his pocket thats going to walk in the door.

You really want to see a circus act, that seller is spending 24,000 on real estate commissions. There is no way in hell those real estate agents are doing 24k worth of work.

Recommend the seller find a way to renegotiate the real estate contract. And if your agent starts squirming, call Jamie at Red Pear Realty and get 2% back of his 3% commission.

www.Myredpear.com

Boom, you now have money to fix an AC system.
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fka ftc
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12:15p, 12/3/20
Easy rule to remember on third-party warranties. If they on average were a good deal for the customer, the warranty providers would not be profitable and would not be in business. The fact that they are not only profitable but usually significantly profitable, means that on average they are a BAD deal for customers.

If you want to make a bet that you are one of the few customers it works out for, buy one. Else, setup your rainy day repair fund.

The only reason original manufacturers (whether they be homebuilders, car makers, electronics, etc) provide a warranty on the original purchase is that they are either required by some statute to do so, they know that if something goes wrong with the item purchased they will be legally responsible anyways, or its a value add to the original purchase transaction.

Home warranties, extended warranties and third-party warranties are not for the benefit of the customer.
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Dr. Venkman
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In reply to El Hombre Mas Guapo • 12:49p, 12/3/20
AG

Quote:
I know it's not easy and you have to fight them - but is it realistic that I close on a house, get a $700 home warranty, and have them just replace $12k worth of systems?
I tried this. Called the warranty company and they sent out a tech. Said the condenser was not installed right. That's why it failed 20 years after installation. I had to pay him $80 for the "service call." Warranty company denied claim based on incorrect installation.
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aggie appraiser
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2:52p, 12/3/20
Did the sellers swap out the system AFTER you made the offer?
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Yesterday
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In reply to aggie appraiser • 6:06p, 12/3/20
AG
aggie appraiser said:
Did the sellers swap out the system AFTER you made the offer?


Do you think they viewed the house one or two times with an hvac technician?
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aggie appraiser
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In reply to Yesterday • 8:44p, 12/3/20
Yesterday said:
aggie appraiser said:
Did the sellers swap out the system AFTER you made the offer?


Do you think they viewed the house one or two times with an hvac technician?

It doesn't take a licensed technician to look at the unit and know it is old as hell. If you want new stuff, buy a new house.
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Diggity
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9:01p, 12/3/20
AG
Buyer can ask for whatever they want. Seller can tell them to pound sand, or not.

It's the option period
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El Hombre Mas Guapo
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In reply to aggie appraiser • 9:19p, 12/3/20
AG
Yeah, I admit, under normal circumstances, I should have take it into consideration. However, the market is stupid right now in the neighborhoods I'm looking at, especially in my price range, and I took a gamble on a tour after dark.

I let an offer fly that night (I'm basically repenting myself here - and using my companies RE Brokerage License). I saw what looked like old exterior units, but the only manufacturers date I looked up was on the furnaces in the attic and they were mid 05-07 range. I figured the condensers were of the same era - rookie mistake.

Thankfully, literally during the inspection, the main unit froze solid, all the way to the coils in the attic, and when the pipes melted, it left water stains on the ceiling. Our inspector had to emergency call the homeowners and get an AC tech out there. The inspector then got thermal images of the frozen lines and the pools of water from the condensation. Went back to show the wife the house 2 weeks later and it's all stained, right where the circle is.

Anyway, because of that BS - I feel like I have a right to at least ask for a retrade. As an appraiser, I'm assuming you would agree...
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aggie appraiser
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9:38p, 12/3/20
Sure, ask, maybe you'll get it. On the other hand, like you said, the market is stupid right now in places. Maybe they have more offers and they tell you to take a hike.

I sold a house a few years back and I had it priced way to high. An investor bought it, which didn't make sense because there were lots of cheaper places on the market, but it didn't have to be refurbished. Halfway through the process, he wants to reduce his offer by about 2 grand because the kitchen didn't have granite. I told him that it didn't have granite when he put the bid in. Anyhow, I accepted the reduced offer because I was priced too high and didn't have any back up offers that would beat his.

When you're buying an older place, you have to take into consideration that some stuff is old and will need to be repaired. I don't blame you for trying, but keep in mind, it might backfire.
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ATM9000
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In reply to fka ftc • 5:08a, 12/4/20
AG
fka ftc said:
Easy rule to remember on third-party warranties. If they on average were a good deal for the customer, the warranty providers would not be profitable and would not be in business. The fact that they are not only profitable but usually significantly profitable, means that on average they are a BAD deal for customers.

If you want to make a bet that you are one of the few customers it works out for, buy one. Else, setup your rainy day repair fund.

The only reason original manufacturers (whether they be homebuilders, car makers, electronics, etc) provide a warranty on the original purchase is that they are either required by some statute to do so, they know that if something goes wrong with the item purchased they will be legally responsible anyways, or its a value add to the original purchase transaction.

Home warranties, extended warranties and third-party warranties are not for the benefit of the customer.


A while back, my FIL gave me a ton of **** because he had a home warranty and I said they were dumb. At the end of one summer both of our AC's broke down. I paid for a repair and he ended up some how lucking put and the home warranty company agreed to replace his AC unit and he paid less than I did for the repair. He gave me copious amounts of **** for it.

Fast forward to the next summer it was early July and he was complaining about how high his energy bills were and about how his house wasn't staying cool. Go check the unit they gave him and it was like 1.5 tons too small for the size of his house and some **** bird company I never heard of that I Googled and basically everyone said those units are trash.

He did a song and dance again with the home warranty company, paid 2 service visits to fix things then by that August ended up giving up and just buying a new unit himself.

Moral of this story is yes... home warranties are a massive waste of money and time.
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