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  • Home Warranty Work

    I should have learned my lesson the first time around and although I didn't, I'm pretty sure I've learned it now. I signed up as a contractor for one of the home warranty companies a few months ago. We didn't get very far because we just couldn't get close to each other on pricing. The volume of work they could send had a certain appeal but they wanted me to cable main lines for $60.00 and install water heaters for $495.00(I was to provide the water heater, all necessary parts to install the water heater, and haul the old one off). When I signed up with them their pricing expectations were'nt very clear. When they became clear, we just couldn't reach any middle ground and so I went my way. I was picking up a fair amount of add on business from their customers because there are an awful lot of things that these companies won't cover and all of those items, which the HO had to pay, were charged at regular prices, so I kinda wish it would have worked out but it just wasn't worth it.

    Just over 6 weeks ago another home warranty company named Mutual Warranty, called me to see if I could handle a call for them. I didn't know who they were, hadn't signed up with them, and wasn't sure how they knew me. I think I must have contacted them months ago when I first started looking into doing warranty work. Anyway, I handled four calls for them with their promise to pay in 30 days. It's been 45 days on the first invoice and I have yet to receive anything from them but run around, "We mailed the check on such and such day Mr. XXXXXXX". I'm not sure I'll ever get paid! The 4 invoices totaled less than $1000.00 so it's not going to kill me if I don't get paid. I just can't believe I bought into this! Now I will be more than happy to repost if and when they pay up, clearing their name, but as of this moment Mutual Warranty Co. has not done what they promised they would do.

    So, be advised, if any of you are thinking of taking on any of this kind of work. Be careful, and I would definitely stay away from Mutual Warranty!
    As for me, I'm done with any and all "home warranty work".
    Last edited by ECS; 04-08-2006, 10:40 PM.

  • #2
    One of the plumbers who use to work for me moved out-of-State and started his own business. All he does is home warranty work so he does no advertising. I was shocked to see how well he is doing with just home warranty work.

    Mark
    "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

    I never lost a cent on the jobs I didn't get!

    Comment


    • #3
      Mark wrote: " I was shocked to see how well he is doing with just home warranty work. "

      I'm glad your former employee is doing well Mark, but the scary part of that to me is the original contractor's workmanship and/or materials must have been crap for your friend to be doing so well on warranty work alone. I guess it gets his foot in the door so to speak and he gets called back based on the quality of his work during the warranty job.


      Thinking about the warranty issue from a consumer point of view:
      Consumers (homeowners) for the most part have little knowledge of what is proper or improper by code and even when they are being ripped off if they were watching the work being performed. For them, it is like buying a car and the shoddy contractor is the car salesman. Look at the boiler installed in the Apprentice Mistakes thread for a good example. I can't think of anything more frustrating than to have plunked down a huge chunk of money for a new home, remodeling, or repairs to some major system; then have problem after problem with it and get the run around from the contractor or warranty company. They are at the mercy of the contractor and the inspector(s) who they think is watching out for them.

      To bad that contractors who receive substantiated warranty claims above some lower threshold do not count against them. In other words, claims up to some number, let's say 6 per year for arguments sake, would not count against you. If you get more than the threshold, then these would be counted and too many dings on your license then the Board or whoever issued your license could pull it or fine the licensee just following the same guidelines as if a consumer filed a formal complaint with the Board. That might cause the some of the shoddy contractors to shape up a bit and for those that it didn't they would lose their license and should not be allowed to operate in the State ever again. Might sound harsh but I figure by the time the system catches up with them and pulls their license they have already swindled or cheated way too many people.

      Its also too bad that people who have been wronged do not report the problem more often, instead they take their lumps, pay someone else, and repeat the process until by luck they hit a good one (contractor) who gives them their moneys worth. I think the number of complaints filed is the tip of the iceberg.

      Probably a good number of you will differ with me on this, be that as it may. NJ recently introduced a Home Improvement Contractor licensing law (I call it the Tim Taylor law) which should help protect consumers.
      Last edited by Bob D.; 04-09-2006, 06:45 AM.
      "When we build let us think we build forever. Let it not be for present delight nor for present use alone. Let it be such work that our descendants will thank us for, and let us think, as we lay stone upon stone, that a time is to come when these stones will be held sacred because our hands have touched them, and that men will say, as they look upon the labor and wrought substance of them, "See! This our fathers did for us."
      John Ruskin (1819 - 1900)

      Comment


      • #4
        Bob,

        Here (in the west at least) when we talk about home warranty it is a warranty you purchase on a second hand home. It may be a 40-year old home and they replace the water heater or a faucet if it breaks during the warranty period.

        Mark
        "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

        I never lost a cent on the jobs I didn't get!

        Comment


        • #5
          Originally posted by Bob D.
          Mark wrote: " I was shocked to see how well he is doing with just home warranty work. "

          I'm glad your former employee is doing well Mark, but the scary part of that to me is the original contractor's workmanship and/or materials must have been crap for your friend to be doing so well on warranty work alone. I guess it gets his foot in the door so to speak and he gets called back based on the quality of his work during the warranty job.


          Thinking about the warranty issue from a consumer point of view:
          Consumers (homeowners) for the most part have little knowledge of what is proper or improper by code and even when they are being ripped off if they were watching the work being performed. For them, it is like buying a car and the shoddy contractor is the car salesman. Look at the boiler installed in the Apprentice Mistakes thread for a good example. I can't think of anything more frustrating than to have plunked down a huge chunk of money for a new home, remodeling, or repairs to some major system; then have problem after problem with it and get the run around from the contractor or warranty company. They are at the mercy of the contractor and the inspector(s) who they think is watching out for them.

          To bad that contractors who receive substantiated warranty claims above some lower threshold do not count against them. In other words, claims up to some number, let's say 6 per year for arguments sake, would not count against you. If you get more than the threshold, then these would be counted and too many dings on your license then the Board or whoever issued your license could pull it or fine the licensee just following the same guidelines as if a consumer filed a formal complaint with the Board. That might cause the some of the shoddy contractors to shape up a bit and for those that it didn't they would lose their license and should not be allowed to operate in the State ever again. Might sound harsh but I figure by the time the system catches up with them and pulls their license they have already swindled or cheated way too many people.

          Its also too bad that people who have been wronged do not report the problem more often, instead they take their lumps, pay someone else, and repeat the process until by luck they hit a good one (contractor) who gives them their moneys worth. I think the number of complaints filed is the tip of the iceberg.

          Probably a good number of you will differ with me on this, be that as it may. NJ recently introduced a Home Improvement Contractor licensing law (I call it the Tim Taylor law) which should help protect consumers.
          Bob, I'm pretty sure you misunderstand the sort of warranty work I was talking about. I was not referring to warranty on new construction that a builder might offer (typically seems to be about 1 year around here). What I was referring to is more like an extended warranty that a homeowner might purchase or even have provided by the seller as terms of the sale for either new construction or an existing home. In fact, 20 - 50 year old homes, in my experience, are much more likely to have this type of warranty than new homes (I guess people expect new homes to be trouble free and are less likely to purchase this type of warranty "protection". It seems to me to be an awful lot like insurance although every warranty company I've ever talked to denies that it's insurance. It sounds good on the outside to the consumer who is planning on purchasing an older home whose mechanical systems have come farther than they're going. The problem for the consumer, as I saw it, is that their are seemingly a very wide range of things that typically will not be covered, i.e.: any type of faucet problems, any problems caused by sediment or corrosion, galvanized water piping problems, pressure problems, etc.

          The warranty companies want all repairs to be done dirt cheap. Any repair costing over a pre-authorized limit, usually $150 - $250, has to be called in for authorization. This phone call may take anywhere from 10 - 30 minutes and the warranty company seems to expect this to be on the plumbers time. As I stated in previous post, one company expected me to pick up the wh, install it (all code upgrades were on the HO, maybe this is where the warranty company expected me to make up the difference), and haul off the old tank for $495.00! Around here a decent 40 gal. electric (I know they're cheaper at the box store but I've had too many problems with the box store wh and no longer use them) will run $350.00. I think that even you t&m guys would have to agree that this is not worth it!

          It's just not my thing. They can send you a lot of work but you will have to run 6+ calls per day to make a decent living and then you will have to wait 30 days to get paid which will increase your costs to keep track of all of your accounts receivables. It just isn't worth it to me, I've got enough work at my price. It doesn't make any sense for me to work for 1/2 and then have to wait to be paid.

          Comment


          • #6
            ECS, you are correct, I was thinking of new home warranty work. But whatever you call or whenever you purchase it, its still a contract to maintain some portion of the property for X dollars. To the homeowner, it will not matter if that warranty came as part of the purchase of a new or previously-owned home, they get roughly the same treatment and unfortunately (through no fault of yours) the warranty companies (like anyone else) want the repairs done ACAP (As Cheaply As Possible). The person who could and usually gets hurt by this is the homeowner 11 times out of 10.
            "When we build let us think we build forever. Let it not be for present delight nor for present use alone. Let it be such work that our descendants will thank us for, and let us think, as we lay stone upon stone, that a time is to come when these stones will be held sacred because our hands have touched them, and that men will say, as they look upon the labor and wrought substance of them, "See! This our fathers did for us."
            John Ruskin (1819 - 1900)

            Comment


            • #7
              Bob,

              I've been doing Expert Witness work for Construction Litigation for the last 18-years. In the past the Developers have always taken the attitude it was the homeowners and their Attorneys fault for the litigation. Within the last year I have seen a switch to where now the Developers (some not all) are starting to take part of the responsibility for the problems and are trying to make it better.

              Mark
              "Somewhere a Village is Missing Twelve Idiots!" - Casey Anthony

              I never lost a cent on the jobs I didn't get!

              Comment


              • #8
                Mark, that is true. Hopefully in your neck of the woods, it is because they are changing for the better on their own.

                Here in NJ it is because the State is getting on their a$$ and finally standing up to the worst offenders on the consumers side where appropriate.

                I have posted over the past fews days a number of links to articles on the State of NJ web site related to just this topic area.
                "When we build let us think we build forever. Let it not be for present delight nor for present use alone. Let it be such work that our descendants will thank us for, and let us think, as we lay stone upon stone, that a time is to come when these stones will be held sacred because our hands have touched them, and that men will say, as they look upon the labor and wrought substance of them, "See! This our fathers did for us."
                John Ruskin (1819 - 1900)

                Comment


                • #9
                  ECS, does your state not allow you to bill the homeowner if you are not paid? How about filing a lein? Out here in NM if a sub does not get paid he can lein the building. This would surely piss off the warranty company but it appears you don't want to work for them again and the homeowner will then be put in the middle, fighting the warranty company.

                  By the way, if it works the same way there as it does here, companies (usually a one man shop) do the home inspection on a resale, then offer the warranty for an additional fee. The warranty applies only to those items not specifically excluded because the inspector felt they were deficient to begin with.

                  Comment


                  • #10
                    Originally posted by BigThom
                    ECS, does your state not allow you to bill the homeowner if you are not paid? How about filing a lein? Out here in NM if a sub does not get paid he can lein the building. This would surely piss off the warranty company but it appears you don't want to work for them again and the homeowner will then be put in the middle, fighting the warranty company.

                    By the way, if it works the same way there as it does here, companies (usually a one man shop) do the home inspection on a resale, then offer the warranty for an additional fee. The warranty applies only to those items not specifically excluded because the inspector felt they were deficient to begin with.
                    Yes, I absolutely could do this but for the amount of money I'm talking about it would hardly be worth the hassle. Plus I kinda feel like most of these home owners are already getting the shaft to begin with. I don't know what the hwc's are telling these people to get them to sign up, but it's clear to me that a lot of these people are getting a rude awakening when they find out what's not covered. Now maybe that's their own fault if they didn't read the contract carefully enough but on the other hand most people don't understand a lot of the plumbing/electrical/hvac language anyway. In any event, I personally would rather just take the loss than to turn around and demand payment from a HO who thinks he's already paid and just wants it fixed, after all its the hwc that's in default not the HO. Something I have begun doing for remodeling work though, is to write my contracts to require the contractor's signature and the property owner's signature so that the property owner clearly understands that if the contractor fails to pay my company for any reason that he/she will be required to pay any outstanding balance in full. I'm not a lawyer so I'm not certain how it stands up legally, but it makes me feel better and it eliminates any potential argument by the property owner that he "didn't know".

                    Having said all that, in order to be true to my word, I am happy to report that in my mail box this afternoon I found a check from Mutual Warranty Co. for all but $150.00 of what they owe. It was 15 days late and not the correct amount but I was really beginning to think that I wasn't going to be paid at all so I'm feeling a lot better about it. I still won't do any more business with them but I just wanted to let everyone know that they have paid about 80%. It's Sunday which means that the check was probably sitting in my mailbox when I posted complaining about them yesterday.

                    Comment


                    • #11
                      i've never directly worked for a home warranty co. i've been brought in to fix the items that the hwc co couldn't or wouldn't do. the biggest scam is that the person coming out is looking for a way out and a way to charge extra. the one that comes to mind about 3 years ago was the customer that needed a 75 gallon gas heater replaced. i went there on a frday night to shut the water off. they said they had a home warranty policy. for $45. they can get the heater replaced. the plumber came out sunday to look at it. on monday they faxed a proposal of what it would cost. the part not covered was about $1500.

                      the gimmic was the hwc was the same parent co. as the plumber. talfk about a conflic of interest.

                      the warranty co paid them off for the heater and basic installation for a total of approx. $650. the job was then compleated for under $1000. so it ended up costing the owner $350. out of their pocket instead of the
                      $45 detuctible and $1500 extras.

                      what a scam. the owner cancelled the policy and now pays me my hourly rate and is thrilled to get the warranty co. out.

                      the majority of plumbing co's that do warranty work are co's with men that need to keep busy and most of them are not qualified to fix it right the first time. i've done lots of repairs for the homeowners to follow up on these co's.

                      the one man shops don't need this type of work. i only work on referrals. no insurance co. work.

                      rick.
                      phoebe it is

                      Comment


                      • #12
                        Home warrantee

                        I’ve done many jobs per week for two home warrantee companies when I lived in Iowa. They are a pain in the @$$ to work with. As previously mentioned, it can take up to a half hour (I had a one hour wait before) to get authorization and then they complain about the cost of the job. I even had one company say that such and such plumber in such and such city that was not even close to me only charged this much. Why are you so expensive? It was half of what we charged. Very frustrating to work with!
                        One of the best lessons I learned from my father is when he did nothing to help me. I then learned to help my self.

                        Comment

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