Home Warranty vs. Home Maintenance Plan

Today we’re going to talk about a few things that may help you guys sort out some of the differences in the marketplace. You probably hear a lot about home warranty plans and especially if you’re buying a new home, warranty plans are top of mind.

 That’s often thrown into a deal to help give some comfort level when you’re moving into a new house, which is understandable. Some people buy those on their own as well. But what is the difference? What does a home warranty plan do? What’s the difference between that and the whole maintenance or repair plan? We’ll talk about that.

So let’s get down to it. A home maintenance plan. A home maintenance plan is something that will actually do maintenance on your home or make repairs. I’m kind of using that word interchangeably. Maintenance and repair kind of go hand in hand, but that actually gets work done on your home and makes improvements. I’ll talk a little bit more about that in a few minutes, but a home warranty, on the other hand, covers things like an insurance policy in case of a loss, like maybe you have an AC or a furnace or something that just goes bad and it’s shot, needs to be replaced. That would be a good candidate for a home warranty plan.

Home warranty plan is like an insurance policy that covers certain things, and they vary a little bit. They sometimes have deductibles as well. Sometimes they have a cost that you have to pay for a service call. So let’s say for instance your air conditioner quits working on you, and you want to get looked at, you would call a home warranty company and usually, I don’t want to speak for every one of them out there but this is a common way that they work, they have a charge that they make you pay, which is usually fairly reasonable, $60-$75, and they send out a service person to make that repair.

If they can make that repair they do that for free. There’s no additional, other than that service charge that you pay, or if they have to replace it, they’ll actually replace it for free. If you’re one of those kinds of people, you’re way ahead. You got a $4000 new AC or furnace for the cost of your home warranty. That’s great.

One of the downsides of home warranty plans is that there’s a lot of things they don’t cover, like they don’t cover … well again, I don’t want to get into the specifics too much because there’s such a variance from company to company, but there are lots of things that they don’t cover. It’s more for that catastrophic event that you would have something break down that you want to try to minimize your risk and maybe the first year when you had that home warranty plan, and you can even go further with those, but the further you go, the more expensive they can get. There’s a lot of questions you need to have answered with a home warranty plan, but they only cover things that break down on you or need to be replaced usually.

Now, the difference between that home warranty plan and a home maintenance or repair plan is the home maintenance plan is something that gets used no matter what. The home warranty plan over here just gets used if there’s a breakdown. So you’re paying that money in case there’s a breakdown. Over here on the repair plan or maintenance plan side you’re actually getting work done on those plans in your house. Let’s give a scenario, let’s say you have a room in your house to where your daughter used to live and now she’s away at college and in fact she has an apartment, and she’s not going to be moving back into her room.

Let’s say you go in there, and she has those little reflector stars all over the ceiling, and maybe she painted this room with pink stripes, this wall pink stripes over here or something, whatever. She made it personal, and it suited her very well for the time she was there. But, now it’s time for you to turn that into your office to do work. Okay? So you might say, “Okay, well we’re going to look for some new office furniture, and I’m sure you can handle all that. Most folks can, but you might need some work done.

Maybe you need the ceiling to be stripped down, and it needs to be repainted. Maybe the room needs to be repainted. Maybe you need new trim in the room. Maybe there’s a place, maybe you want to convert a closet, take out the doors and you want to have like a nook for the desk, install some shelving. Maybe you want to put up some new light fixtures. Maybe you don’t have an electrical box in the ceiling at all. Maybe it’s just a lamp over here that’s always been working for her, but now you need wiring put into the ceiling. You need to put a ceiling fan or a light up there. Maybe need extra lighting, any number of things. This is obviously a hypothetical scenario, but all those things can be done on maintenance and repair plans. They can be scheduled. That to do list can be put on the next visit for this maintenance repair plan.

Another example might be, let’s say you have some exterior caulking that’s failing on the outside of your house, and you’re noticing that the trim work around your door on the front of your house is starting to flake or crack and there’s cocking at the top that’s failing and water is getting down behind there. That’d be really good example of something you could do on a maintenance and repair plan, but that’s not going to be covered at a home warranty.

Other things might include maybe some upgrades. Maybe you would like to take your powder room on your main floor and just dress it up a little bit. Just move it up a little bit to the next level. You want to put a new vanity in there, a new faucet, new mirror, new light fixture, maybe replace the toilet. Those are all great things that can be done on a home maintenance or repair plan. You can take that to do list, queue it up for the next visit, and the technician can just tackle that and get that done for you.

A home warranty plan, it’s not going to fit the bill, even if you have a leak in your toilet, unless it causes major damage into your house they’re not going to fix your toilet for you. So just some idea of a way to differentiate between the two is: Home warranty is going to be more catastrophic, bigger items that fail and cause damage to your house. A home maintenance and repair plan is going to cover more of the work that you need to do to your house regularly to keep it up.

How many of you out there know what is the second law of thermodynamics? If you know what that is, you’re probably not going to type all that in the comments. But what’s the key word to the second law of thermodynamics? Everything what? I’ll give you guys a second. Everything what?

Everything degrades. Everything starts to deteriorate. That’s just the law of nature, how it works. So when you’re in your home for 10, 15 years if you don’t put new energy in it’s going to be in less or worse shape when you move out. So we have to put new energy in is what that law says to keep it at the level that it’s at. So that’s what a maintenance plan and repair plan can do for you. It can keep your house in really good shape. Not to mention, it can keep you from being frustrated by your house.

Do any of you out there kind of come home and say like, “I’m home, this is good.” It’s like, “Oh yeah, I got that thing, I got that, I got that problem, forget about all that because I was gone all day,” and it kinda like drains you down. It takes away from your energy. How nice would it be to be able to come home and say, “It was so nice and all that stuff got done last quarter. I’m looking forward to doing these next things next quarter,” and maybe a more hospitable, maybe enjoy inviting friends and family over more because your home is kept up with and in good shape. It’s someplace that you enjoy, someplace that’s peaceful for you. So those are good ways to think about the two different plans that we have. A home warranty, more catastrophic covering things like an insurance policy. Home maintenance, more work being done to help keep your house in really good shape and take that to do list out of your mind and get it done and knocked out.

So let’s talk a little bit about cost. Home warranty plans can vary quite a bit in cost. Sometimes they’re very reasonable though, maybe $500, $600, $700 a year, sometimes even less. Home maintenance plans, now again, remember we’re going to be using this time. So we’re buying time really. Probably going to cost a little bit more than that. For instance, our company offers a whole maintenance plan that starts around $106 a month. We even have one lower than that for condominiums. If you’re in a condo and you don’t have exterior work to do we have one to start at $68 a month. So it’s a very reasonable, but it’s still probably a little bit more than that $500 a year. Those costs, just to let you know, those costs don’t include materials. So if a technician comes in and makes repairs or puts that new faucet in your powder room, you’re going to have to pay for that faucet too, but it covers all the work that’s being done on those visits so it gives you a really good idea of what can be done there.

Now our company also offers a maintenance plan for a larger homes where we come out monthly and do a little bit more work and a little bit more time. That’s about $300 a month. So that kinda gives you an idea of what the cost is of a home maintenance plan. Some of the benefits there, I think I already mentioned, just peace of mind. You enjoying your home a little bit more. You preserve the value of your home, and that’s really important. You go to move out and try to get that agent to come and say, “Hey, what’s my home worth? I pay $310,000 for it 15 years ago. “Well, sorry sir. It hasn’t appreciated much because you’ve got a lot of deferred maintenance here, stuff that didn’t get done.” You kind of avoid that big mess too.

In fact, we had a customer the other day that went to sell her house and she called me and said, “You know, the house is in great shape and the inspector said so when he looked at things just because you’ve been taking care of it all this time. So she let me know that that was a real blessing to her, a real benefit to her and her family. So those are a couple of things that will help you kind of navigate that whole language between warranty and maintenance or repair plan.

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