Episode 38: David Cox on Why Every Homebuyer Needs a Home Warranty for Peace of Mind & Protection

00:00:00:00 - 00:00:43:09
Nate Carver
What if you buy a home and two weeks in, your air conditioning goes out? What next? Hey, everyone, it's Nate Carver, your favorite mortgage guy. And this is, between two doors. We are talking to a home warranty guru, David Cox, out of North Texas. Quick backstory on David. He's been in the real estate industry for since 2004, and he has earned multiple titles in real estate, multiple awards through real estate and has moved into the home warranty field and, is thriving there.

00:00:43:11 - 00:00:48:00
Nate Carver
Loves Tex-Mex, ice tea and, Broadway musicals. We're going to plenty to

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Nate Carver
talk about. And,

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Nate Carver
we will

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Nate Carver
soon find out.

00:00:50:15 - 00:01:11:19
Nate Carver
Hey, I'm Nate Carver and welcome to Between Two Doors.

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Nate Carver
out. Hey, David. How are you doing, sir?

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David Alan Cox
I'm amazing. Happy Friday.

00:01:15:11 - 00:01:28:08
Nate Carver
Nate, happy Friday. Hey, tell me. So tell me a little bit about your story we talked about in your bio, kind of where you started and what got you into the home warranty. What was the driving factor there?

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David Alan Cox
Absolutely. You know, I started as a real estate agent and quickly became a realtor, working with buyers and sellers and doing a lot of coaching and mentoring to new agents, which was probably my favorite thing to do was to to grow the new agents and watch them succeed. And I was in it for 18 years, and during the 18 years on my transactions, I always used a home warranty.

00:01:50:22 - 00:02:18:09
David Alan Cox
I saw the value in a home warranty. It's a big risk management tool for agents. And so I always believed that if you put a home warranty there for everyone, you're always going to have happy clients. You know, 25. Excuse me? 85% of Americans have a malfunction on their systems or their appliances in the first month that they buy a home, and most of them don't have $1,000 saved up after closing to put into that repair.

00:02:18:14 - 00:02:37:19
David Alan Cox
So I believe in home warranties. And so after 18 years and all of the serving at the National in this state and the local levels, I decided, you know what? If I believe in home warranties, it's time to go ahead and go into that field. And so, you know, as a realtor, I helped people every day. But in home warranty, I feel like I get to help more people every day.

00:02:37:19 - 00:02:41:21
David Alan Cox
And so I that's what I love about this job. It's people helping people.

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Nate Carver
You just going to you just answer my, my, my question there I was like, what is it you most enjoy most about serving, the community? And there you have it.

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David Alan Cox
Absolutely.

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Nate Carver
So tell me on what is a home warranty, let's assume we got a first time homebuyers listening in. Maybe even seasoned homebuyers, and they just don't know. Why would they? They got their own priorities in life. So what is a home warranty? And why should homeowners care?

00:03:11:04 - 00:03:34:01
David Alan Cox
Absolutely. So a home warranty covers systems, major systems and appliances within your home that malfunction due to normal wear and use. And so everybody assumes when they buy a new home or a previously owned home, everything's going to work. You have your inspection, you know, everything's on the seller's disclosure. But we all know things happen after you move in.

00:03:34:03 - 00:03:56:08
David Alan Cox
And so, like I mentioned, that 85% of homeowners experience a malfunction on those major systems or appliances in the first 30 days. And so after closing, you've pretty pretty much pinched all your pennies. And so you need to be asking your realtor, hey, can I get a home warranty? Who's the best home warranty? And shop those home warranties and make sure it's the coverage that's right for you?

00:03:56:10 - 00:04:13:06
David Alan Cox
There's 1 or 2 ways that it can go that you know that that AC stops in the middle of the night and it's blowing hot air. You're going to probably call your realtor, and the realtor is going to tell you that I'm sorry you're responsible for that. You bought it as is or your realtor is going to say, don't worry about it.

00:04:13:06 - 00:04:22:04
David Alan Cox
Remember, we got you a home warranty, so call it in and go ahead and get some service providers out there to fix it. That's always a better scenario.

00:04:22:06 - 00:04:44:02
Nate Carver
Oh, absolutely. And I can tell you from the lender side, I try to protect their, their income, their savings, their you know, the cash reserves, in, in getting in, into the home sometimes it's, you know, it's really a lot of skin in their teeth and, you know, they're celebrating that they got a home. And I'm like, please get a warranty, please.

00:04:44:07 - 00:04:59:09
Nate Carver
Absolutely. Because I know they don't have any any resources to give up. Right? I certainly don't want them to be in that position. So, as a home warranty. Okay. Tell me, what's the difference between a home warranty and homeowner's insurance?

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David Alan Cox
Right. So actually, I just had that happen to one of my clients. She works in Longview and also works here in the Denton area. And so her hot water heaters upstairs and it started leaking and malfunctioned on a Friday night. Of course, at 630 on a Friday night, that's when things always happen. So we were able to go in and fix her water heater.

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David Alan Cox
However, the water heater did overflow from the pan and flowed down the stairs into the walls. They were able to turn the water off, but that caused a lot of secondary damage. And so the secondary damage would be handled by their insurance company, their homeowners insurance. We handle the water heater will come in and repair, and if we can't repair will replace.

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David Alan Cox
And then the secondary damage would be the insurance company. So we kind of work in tandem together.

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Nate Carver
Right. Are there things that you see there kind of typical like on average what would you say? You know, looking at at any given selection of homes, you kind of know what's going to break or.

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David Alan Cox
You know, typically our biggest in Texas is going to be the Hvac system, the water heaters. You know, during the winter, we have a lot of water heaters that we service, in the summer, which we the first day of summer today. So for the next three months, you know, most of the claims are going to be Hvac.

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David Alan Cox
And again, they always happen on a Friday night, when you're having a party or when you're having company over, those are the most ones we see. Probably the the biggest one I see after that would be ovens and stoves, near Thanksgiving and Christmas. Of course, they always want to go out when it's the most inopportune time.

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David Alan Cox
But those are the most ones we see in Texas. I would say in these areas.

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Nate Carver
Okay. How does that, how do you, current warranties on appliances and home warranty? Do they conflict, or is there, or do they not have any any conflict there at all? Let's say you buy a home and it's got a brand new hot water heater that's got a warranty, presumably, or or kitchen appliances, any of that.

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David Alan Cox
Right. So if it has a manufacturer's warranty, we're going to ask you to go to your manufacturer first. To get that. But there are levels of our of our plans because we have a silver, a gold and a platinum because we know that it's not a one size fits all. And so we have our plans built in there, and you can get a plan that has coverage for, stuff that's already under a manufacturer's warranty.

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David Alan Cox
So you can get that extra coverage.

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Nate Carver
Oh, nice. Okay. Yeah. So a home that's been built, maybe it's only a year old. It's going to have different dynamics or or it's going to have a different nature than a home that was built. That's craftsman home for example. Correct. Yeah. Okay. Nice.

00:07:48:22 - 00:08:05:24
David Alan Cox
You know what's really cool, neat is, you know, we offer the one or the two year home warranty for a residential, but also for new construction. And so a lot of realtors are selling new construction, and they don't really get the value of getting a home warranty because they've already got a home warranty. So most builders are going to pay that 1 to 10.

00:08:06:01 - 00:08:26:06
David Alan Cox
And so that one is that covers your systems and appliances for the first year. Yeah. You know, you can get a new construction home warranty for us. And we can start a year two through five. And that way when theirs goes up you have four years on your assistance appliance. It's covered by us. And so it's a real smooth transition.

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Nate Carver
Right? I was going to ask the terms, how long to the warranties are you do you offer or are on the market available to homeowners right on the 1 to 2.

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David Alan Cox
So we do one. We'll do a one year. We'll also do a two year home warranty if you want. A lot of people are worried about renewals. You know, if I use my home warranty in the first year, is it going to go up the second year? Probably. So I mean, it's a lot like insurance and I'm fully transparent.

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David Alan Cox
So, you know, if the renewal is something you're concerned about, take the discount and get the two year plan. That way you don't have to renew for two years. And then on the construction's it's of course four years.

00:09:04:17 - 00:09:26:11
Nate Carver
Right. Okay, great. So first time homebuyers, new homeowners, they're excited to get the keys. And I know there's a little bit of stress somewhere in the back of their minds. How does having a home warranty help reduce or mitigate their stress? The things that they're not telling, they're telling you about at closing.

00:09:26:13 - 00:09:50:21
David Alan Cox
Right. Our motto is we are people helping people. And then what it is, is we are there for budget protection and peace of mind. And so we're going to make sure that those systems and appliances are up and running, and we're going to make sure that you have peace of mind. The last thing you need after you have spent a week moving in and getting everything going, is for your dishwasher to stop and flood all over that wood in your kitchen.

00:09:50:23 - 00:10:16:21
David Alan Cox
And so we're going to make sure you've got that warranty, you've got that declaration sheet. And I always tell the realtor, call them and remind them they have a warranty. I just had a situation today that I had to take care of. They spent $350 because they forgot they had a home warranty. We would have covered that minus the minus the trade coffee and they had a trade coffee from me, so they would have been out zero had they remembered they had a home warranty.

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Nate Carver
Nice. That. That's awesome. Hey, tell me, let's talk about some myths about home warranties. Are you seeing any misunderstandings about home warranties?

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David Alan Cox
I think there is. You know, during Covid, I think all home warranties took the major hit and we're back now. But we did take a big hit in Covid. And two things happen. It was the perfect storm, Nate. Number one, everybody was home. So they were using their appliances more which means they were breaking down more.

00:10:43:22 - 00:11:03:01
David Alan Cox
Number two, nobody was working. So nobody was out for technicians. Nobody had parts, nobody were making parts. And so the big warranty companies took a real big hit because nobody could get service. It was taking you for a month to get a part for an AC in the middle of the summer. And so the big myth is that we don't pay claims.

00:11:03:01 - 00:11:28:12
David Alan Cox
And I got to tell you, it was over 500 million in claims that home warranties paid just last year, just last year on all the companies. So they do pay. I think one of the myths is that, oh, call your claim in there finding every reason not to, approve it. We're finding every reason to approve it because we don't want to sell you a home warranty and then deny your claim.

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David Alan Cox
That's the last thing we want to do.

00:11:30:21 - 00:11:55:01
Nate Carver
Wow, wow. Tell me when, in the buying process online of a home. When when is it best to introduce the home warranty or get the home warranty? Is it something the realtor needs to introduce you? Or would you like to see the lender introduce that to the buyer? Future homeowners? Or is it after closing is too late?

00:11:55:03 - 00:11:58:05
Nate Carver
What's was the right term? Ideal?

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David Alan Cox
I mean, the perfect scenario. Absolutely. Lender can work with the lender, work with the title, work with the realtor. I can order it. I can have my home office order it. You can set up a toolbox. An ordered perfect scenario is when you list a home, contact me for $75. Let me put listing coverage on there. That way you've got a home warranty on your listing product and then we stick a buyer's product on there.

00:12:24:04 - 00:12:43:07
David Alan Cox
So when it closes and nothing's due to a closing, it transfers over into the buyer's warranty. You get to market that property is already having a home warranty. And of course I've got the routers and everything you need to to class that up. That is the perfect scenario, to get that seller's covered so that it automatically. But that doesn't always happen.

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David Alan Cox
You know, some sellers think they're okay without it and they get the buyers, but you always have 30 days after a closing to be able to get your coverage with no interruption in coverage.

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Nate Carver
Okay. Cool. So how do you so once you once a homeowner has their home warranty lined up, is there a is that a long term relationship with you? Or. Like in the lending world, I stay in touch with those clients for life. The loan may get sold to a servicer. I'm just curious. In in the home warranty world, what what sets you apart?

00:13:26:02 - 00:13:30:11
Nate Carver
And how do you take care of those customers or clients that you.

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David Alan Cox
So in the home warranty world, my client is the realtor. And so the realtor, I am taking care of the realtor and taking care of their buyers and their sellers. And so I will absolutely talk to sellers and talk to buyers all day long about which plan is best for them after they become a plan holder. I don't necessarily have contact with them because it's the Realtors client.

00:13:53:20 - 00:14:15:23
David Alan Cox
The only reason I would have contact with a buyer afterwards if maybe they called me on accident because, yeah, you call in their claim or do their claim online. The reason I say that is I'm in sales. I am not in in the service department. I can expedite a claim if I need to. I can help work a claim if for some reason the realtor or the home owner doesn't think it's going well.

00:14:16:00 - 00:14:31:06
David Alan Cox
But for the most part, 99.9% of my claims I don't even know about because our service department handles them so well. And so typically, after a plan is purchased, I don't usually talk to the client after that. But I will talk to my realtor client.

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Nate Carver
Oh, gotcha. Okay. Yeah. All right. What what should a new homeowner do in the first 30 days of, moving in?

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David Alan Cox
Well, the first 30 days, and I don't know what they should do. I would say the first thing they need to do is make sure they get an inspection. So if inspection before that, our rule of thumb is that everything has to work on the day of closing. And so, you know, I do understand that things stop working that night or they do stop working the next morning.

00:15:06:16 - 00:15:22:02
David Alan Cox
And so sometimes we might have a claim in the same day, you know, they may close at 8:00 in the morning. They test it, everything. They've walked it through, everything worked. And now boom, they're moving stuff in, in the AC stop. So, you know, we're not going to deny that claim. We're going to do everything we can to try to make that claim.

00:15:22:02 - 00:15:45:01
David Alan Cox
But during the first 30 days is temporary. Typically the the if period, you know, that that preexisting type of stuff, but that's what the technicians do best. And, we're, we're really, really good at paying our claims. I think we paid just a little over 138 million last year in claims. And so we had a lot of, happy, happy plan.

00:15:45:03 - 00:16:06:08
David Alan Cox
And it was 90, I think it was 93%. And that sounds a little bit low. But some of the claims that we gain in are like, I have a cracked window. Well, we don't cover windows, you know, or you know, the roof. We need to replace the roof, but we don't replace roofs, you know. So, a lot of those claims that got denied were things that aren't even in our plans.

00:16:06:10 - 00:16:23:18
Nate Carver
Right. Let me ask you, this is your is a home warranty for you, or are you restricted or limited to a region, a state, a counties? Are you able to work outside of Texas or how what's your your service area.

00:16:23:20 - 00:16:47:08
David Alan Cox
Right. So we've got about I'd say 75 reps all over the country. And there are some states that we don't work. I don't know the geographic with that. Looking at it, some states we don't work, but most of them we do. And so in Texas we have 11 or 10, I want to say. And so the way that we assign an account executive like myself to an office is by zip code.

00:16:47:10 - 00:17:02:02
David Alan Cox
And so I have a Dallas, Collin County, Hunt County, Rockwall County, Fannin County, Grayson County, and part of Denton County. And so if your offices are in those areas, I'm your guy.

00:17:02:04 - 00:17:03:14
Nate Carver
I'm your. Well, yeah.

00:17:03:15 - 00:17:18:22
David Alan Cox
And I'm even if I get a call from somebody who's not my not my realtor, I'm going to go ahead and put the order in, and then I'm going to send them over to that account, executive them, let them know, hey, then they ordered something. You need to call and follow up with them, but I'm just going to put the order in anyway.

00:17:18:24 - 00:17:24:21
Nate Carver
Wow. And two of those counties are in the top ten fastest growing counties in the country.

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David Alan Cox
Yes. Yeah, yeah, it's a.

00:17:27:22 - 00:17:32:08
Nate Carver
Lot of areas, hon. So, yeah.

00:17:32:09 - 00:17:34:16
David Alan Cox
And it's different, you know.

00:17:34:17 - 00:17:51:19
Nate Carver
Yeah. That that's fantastic. All right. I'm going to I'm going to shift gears because we teased it a little bit on the front end. I've got some, my cheat notes say that you have a connection to Mr. Peppermint.

00:17:51:21 - 00:17:52:11
David Alan Cox
Yes.

00:17:52:17 - 00:18:01:03
Nate Carver
And, so I want to hear this story. So let's start there, and then I'm going to jump into musicals, and then we'll find out some stuff on food.

00:18:01:03 - 00:18:30:01
David Alan Cox
So yes. What was first name was Jerry. He was a good friend of the family. So my uncle, started out in Chicago. Bill Cox, he started out in Chicago with a new station, and he was in charge of programing. He actually discovered Oprah Winfrey. Chicago back then. And so he moved back to Dallas and became the program coordinator for ABC, channel eight, there in Dallas.

00:18:30:01 - 00:18:44:22
David Alan Cox
And so it was really, really cool because my family got to choose Movie Week. If you're if you remember back then during the afternoons, it was like Elvis week. They'd show Elvis movies in the air, or it was Doris Day week, or it was Rock Hudson week. So we would call and tell him, hey, we want Elvis Week this week.

00:18:44:24 - 00:19:05:15
David Alan Cox
And Jerry being a really good friend of the family with the Mr. Peppermint Show, my uncle got me and my sister on there 2 or 3 times to star on that. You know, he was over at at Thanksgiving and everything, and so he was just like one of the family to us. So, you know, we didn't work with big starry eyes or thinking it was like, oh, here's uncle Jerry, you know, late great uncle Jerry, he's through passed.

00:19:05:15 - 00:19:07:24
David Alan Cox
But yeah, that was a great experience.

00:19:08:01 - 00:19:16:11
Nate Carver
Wow. My my twin sister and I you to we watched this peppermint, like, all the time. It's right. Yeah. That's all some of the.

00:19:16:11 - 00:19:19:09
David Alan Cox
Kids you say, Mr. Pepper, and they're like, oh, you know, like.

00:19:19:11 - 00:19:31:24
Nate Carver
All right. Yeah, I got some millennial. No kidding. So we've dated ourselves for sure. Yeah, it's a that is true. All right. So favorite musical.

00:19:32:01 - 00:19:36:24
David Alan Cox
Oh gosh. Probably favorite musical of all time would be lemons are up.

00:19:37:01 - 00:19:40:10
Nate Carver
Nice. Where have you seen it?

00:19:40:12 - 00:19:46:02
David Alan Cox
I have not seen it live. So I have seen the movie and I've seen white productions on YouTube.

00:19:46:06 - 00:19:47:08
Nate Carver
Sure.

00:19:47:10 - 00:19:48:08
David Alan Cox
I would.

00:19:48:10 - 00:19:49:17
Nate Carver
Love.

00:19:49:17 - 00:19:59:21
David Alan Cox
To star in that. You know, I was an actor in school and so I was like the lead of this and the lead of that and all that. That's a dream, to be on Broadway and be able to sing that, that would be incredible.

00:19:59:23 - 00:20:26:04
Nate Carver
Oh, that. Yeah. I got I'm going to brag a little bit. My best friend is from England, and one summer is like, hey, come to England with me. We're going to stay at my uncle's house for free, so no room and board. We bought a trail. We're in college. So we were broke in. We went and stayed for a couple of weeks and went down to, I think it was the Soho area of, of London.

00:20:26:06 - 00:20:51:23
Nate Carver
And they had llamas. They had Oliver and they had Phantom of the opera. And we went and saw a bunch of movie, a bunch of movies, a bunch of, musicals productions and, like on the college dorm it was free. Well, it went for it was cheap for college students. It was. They had some discounts and,

00:20:52:00 - 00:21:09:06
Nate Carver
Yeah, totally. Just fantastic. Fantastic production. So anyway, love of music, musicals. I've never been up to New York. I'd like to go some day and see some of the stuff there. Of course, we get stuff here in the Dallas and locally in Sherman at the, at the local.

00:21:09:08 - 00:21:28:13
David Alan Cox
It's it's true, but let me say there's nothing like being on Manhattan Island. And that was my graduation present. And so yeah, see, like college, our faux real thing. Noises off. Just a guy. Good to go to the David Letterman. I mean, it was eat it. The room. It is gorgeous. And then my partner went there with me several years ago and hated it.

00:21:28:15 - 00:21:37:05
David Alan Cox
It's cold. It's snowing. I'm like, we're in the middle of Rockefeller Center and it's snowing. Do you not see the beauty? But New York City has a vibe like, no, nothing else.

00:21:37:07 - 00:21:50:11
Nate Carver
Right? That's on my list. I have got to get to New York City. Oh, yeah? Yeah. You will not regret it. Yeah. Wow. That's cool. All right. Locally. Favorite Tex-Mex.

00:21:50:13 - 00:22:08:11
David Alan Cox
Wow. Probably here. Local would be. Can't can't Tex-Mex. It's been here for a long time in in, Denison, Texas. And, you know, I just moved up to the, greater Texoma area two years, a little over two years ago, so I'm loving it. I have not eaten at a chain restaurant in over two years.

00:22:08:13 - 00:22:09:13
Nate Carver
Good for you.

00:22:09:15 - 00:22:11:00
David Alan Cox
Yes, I love it.

00:22:11:02 - 00:22:28:13
Nate Carver
I refuse to go to chain restaurants. We're going out to eat. We're going somewhere local or local, but we're going somewhere unique, right? Absolutely. Good. Good. That more of that? Yeah. I mean, you can go to McDonald's everywhere, and I know people that do. Yeah, well.

00:22:28:15 - 00:22:30:08
David Alan Cox
That's true.

00:22:30:10 - 00:22:45:03
Nate Carver
So it'll do the pinch. But I'm not the one for whatever, thieves throwing I guess. All right. So anything I should have asked you that didn't. But I didn't ask. What's next for you?

00:22:45:05 - 00:23:08:02
David Alan Cox
What's next for me? You know, just doing more warranties. You know, I'm just a little over two years in this, in this field. And so I am still learning every day, how to work with, how to work with all the claims and how to work with just just different offices and different personalities. And so, I like it.

00:23:08:02 - 00:23:26:15
David Alan Cox
I'm not going anywhere. I'm going to be retiring from Old Republic, protection. And, you know, a lot of people are like, do you miss real estate? I'm in real estate. It's like real estate offices every day doing events and and teaching and educating. And so, no, I'm not going anywhere. I'm here to stay. Yeah. That's it.

00:23:26:15 - 00:23:43:23
David Alan Cox
I mean, that's, people that know me know that I don't travel anymore because I have four Chihuahuas. I did have three. But, you know, the partner found a senior dog in the middle of the road. So what are you going to do? He lives with us now. And so now I've got four Chihuahuas, and, they're my wife.

00:23:44:00 - 00:23:50:12
Nate Carver
If you, So how how could listeners best contact you or find you.

00:23:50:14 - 00:24:15:08
David Alan Cox
Very, very easy? They can just hit David C at o rhp.com. They can academy at 972814 1843. Or they can just slide into my DMs on Facebook or Instagram any social media I'm there. I'm very active. It takes about five seconds to get a hold of me unless I'm out of town with you. Well, no, that was a little hard for us to get in touch.

00:24:15:10 - 00:24:20:20
David Alan Cox
Yeah, I am the one that answers my phone, and we'll take your questions.

00:24:20:22 - 00:24:42:00
Nate Carver
Awesome. David, thank you for for meeting with me. We are almost out of time. There you have it, folks. There are about 46 people and agencies that are helping you get a home. Home warranty with David Cox is one of those. Reach out to him. And he will help you with the home warranty piece of that.

00:24:42:00 - 00:24:53:09
Nate Carver
And of course, if you're looking for, lending or a refinance or purchasing help with the mortgage or getting a clear mortgage plan built for yourself, please reach out to me. Nate carver, Nate carver.com.

00:24:53:09 - 00:25:00:01
Nate Carver
And I will see you all on the next podcast. This is Nate with, between two doors. Thank you very much.

00:25:09:00 - 00:25:17:02
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