HomeTool is a membership service that connects homeowners with quality contractors for repairs, maintenance and improvements.

The Houston-based startup is determined to improve the way homeowners manage their homes and how they choose contractors for their projects with an emphasis on quality, convenience and cost-effectiveness.

In this article, we explore the market problems in the home improvement and repair industry and how HomeTool will play a critical role within the larger market trend of proactive home maintenance.

Table of Contents

 

HomeTool Overview Video by Purgula

HomeTool Overview Video by Purgula

 

The Market Problems that HomeTool is Addressing

Though there are countless websites touting vetted, pre-screened service professionals available to hire for your home projects, these service marketplaces are still prone to connecting homeowners with contractors that deliver low customer satisfaction experiences. In parallel, there are a myriad of home warranty companies that are also prone to a high volume of customer complaints and dissatisfaction.

HomeTool’s mission is to rectify these market deficiencies that can be categorized as:

 

Unreliable Contractors

 

The Costly Problem of Disreputable Home Contractors

Finding reputable contractors for repairs, maintenance and home improvement projects is a difficult and frustrating task. Just ask the Moody Family of suburban Chicago who hired a contractor from Home Advisor, a subsidiary of Angi, who proceeded to smash up their backyard.

Sadly, Home Advisor promises homeowners that their platform will help “find trusted local pros for any home project.” What Home Advisor does not tell you is that they are a lead generation or “lead-gen” site that sells your contact and project information to multiple bidding contractors, thereby creating a conflict of interest with the hiring homeowner.

In the Moody’s case, they learned that the contractor hired through Home Advisor had a felony conviction, despite Home Advisor’s claim that they have an “extensive screening process to ensure every business in our network is reputable.” 

 

How to Find Competent, Reliable Contractors

The Moody’s saga begs the question, how can homeowners find reputable, competent contractors for their home repairs, maintenance and improvement projects?

HomeTool, founded by Andrew White, a former home warranty company executive, offers a national, member-based home services platform that helps owners manage their homes and properties.

By remaining diligent and proactive on large system maintenance, such as HVAC, plumbing and electrical, members can save thousands of dollars in catastrophic failures, loss and system downtime by utilizing the HomeTool app to schedule repairs, improvements or maintenance requests at their convenience.

 

Conflicts of Interest

Why HomeTool is Not a Lead-Gen Marketplace or Home Warranty Company

Unlike sites such as Home Advisor, Angi, and Houzz, which are all lead-gen sites that sell customer contact and project information to paying contractors, HomeTool is a membership service.

The key difference of these two distinct approaches to home improvement and repairs is their underlying financial incentives:

  • HomeTool is beholden to providing reputable and reliable contractors to their paying members
  • Lead-gen sites are beholden to providing quality, in-market job leads to their paying contractors
  • In order to grow in both network-size and profitability, lead-gen sites must attract more contractors into their networks, eventually diluting the overall quality of the contractors
  • Conversely, HomeTool’s business model depends on growing their homeowner or member network, thereby keeping the quality of its contractor network high

Furthermore, unlike Home Warranty companies, HomeTool does not have financial incentive to approve or recommend contractors that only adhere to rates well below market averages. The practice of instituting aggressively low labor rates leads to having a network of lower-quality and less-experienced contractors.

With the goal of having a large network of high-quality contractors, HomeTool has taken a different approach to recruiting reliable tradespeople:

  • Unlike lead-gen sites, HomeTool does not charge contractors for customer information or project referrals
  • Unlike home warranty companies, HomeTool does not mandate artificially low labor rates

 

Shortcomings of Home Warranty Plans

The bottom line with warranty plans is that there is a high probability that consumers will pay far more in plan premiums, service fees and uncovered or exclusion items than the savings these plans purport to provide.

Downside Risks of Home Warranties  

  • Denied Claims
  • Long List of Exclusions
  • Covers Only “Normal Wear and Tear” Issues
  • Lower Quality Contractors
  • Low Replacement Values
  • Lower Quality Replacement Parts
  • Reactive Approach to Home Care
  • Does Not Cover Preventative Maintenance Items

 

How HomeTool Differs from Home Warranty Plans 

Home Warranty plans are often a bad deal for homeowners for a number of reasons. For example, most standard plans do not cover common issues such as light fixtures, ceiling fans or damage as a result of a power surge!

The list of exclusion items for many of the standard home warranty plans is often longer than the list of covered items and can be rather costly.

The problem with most home warranty plans is that the nature of the business model means that you are more likely to have a claim denied than approved. For the $500+ you have already spent, thinking that you are protected against any malfunction, you would have been better served keeping a home repair fund in a money market account, to fix any issues that arise.

 

Warranty Plans Only Cover Inoperability Due to “Normal Wear and Tear”

Homeowners with toddlers, pests or pets that cause damage to a system resulting in a system failure, need not apply.

However, HomeTool members can get maintenance checkups anytime, regardless of whether the system is functioning as expected, or completely inoperable. No matter the cause of the issue, the monthly fee gives members access to HomeTool’s experts to diagnose and repair problems at their convenience.

 

Home Warranty Plans: Replacing “Apples with Oranges”

Should a home warranty company approve your claim, their business model will insure that only “builders’ grade” replacements are authorized, even if it does not match the quality of your original appliance, décor, or aesthetic. Simply stated, they will not match your color, dimensions or brand.

Many plans specifically state that the warranty plan will only replace equipment with comparable features that affect the operation of the system or appliance. If your original appliance had additional features, these will not be replaced. If you want these identical features, it will be an additional cost to you.

In order to receive a comparable replacement for a refrigerator, washer, dryer or any other high-end appliance, the homeowner must pay the difference of the plan’s replacement value or cap on the builder’s grade model and the amount of an appropriate replacement.

Warranty plans are not a good deal for homeowners with quality products in their homes. If you have high-end appliances such as Viking, Sub-Zero, Thermador, or Toto, you could be responsible for paying out thousands of dollars in addition to the home warranty contract price and the trade service fee. Many plans reserve the right to repair your appliances and systems with non-original manufacturer’s parts.

 

Warranty Plans are Reactive Not Proactive

To add insult to injury, home warranty plans will only cover your appliance, electrical or plumbing issues when they fail to work. In other words, you are not permitted to use a home warranty contractor to perform maintenance or checkups on your appliances or systems.

These plans do not believe in prescriptive or proactive maintenance of your home, they will only address your issue if the system has failed to function. Furthermore, they will only address your issue IF the cause of the problem is covered in the contract and not part of the list of NOT COVERED reasons or items.

Conversely, HomeTool members can access trade experts for questions or advice on appliances, projects or general maintenance. The low monthly fee, ensures that questions and concerns can be alleviated, before an incident becomes a larger, more costly, catastrophic event.

 

Home Warranty Lower Quality Contractors

The inferior quality of contractors dispatched by the home warranty company is another reason to forego a home warranty plan. Since home warranty companies choose the contractor for you, you are usually stuck with the lowest cost provider in the trade. This is more than likely someone with lower skills, knowledge and experience, especially for higher-end appliances and more complex systems.

HomeTool members are given a list of contractors from which to choose. The contractor’s respective Better Business Bureau (BBB) business page – all “A” rated – plus Google and Yelp reviews, are readily available on their HomeTool profiles, to allow members to choose the best contractor to handle their specific issue.

 

Reactive vs. Proactive Approaches to Home Maintenance

The best durable goods manufacturers have known of years that prescriptive or proactive maintenance is preferred by homeowners. Taking a page from the automotive industry, home maintenance is evolving to leverage smart technology to detect and repair issues BEFORE serious breakdowns occur.

HomeTool: the AAA for Homeowners

Similar in spirit to AAA for your automobile, HomeTool charges a low fee that gives homeowners the assurance and confidence that a reputable contractor is just a text or call away in the event repairs or home improvement projects, small or large, are needed.

HomeTool’s tradespeople are all professional, certified, licensed contractors with substantial experience in their respective trades. For a low monthly fee of $10, members have the convenience of having an expert “in their pocket”. Fees are paid on a month-by-month basis and members can cancel at any time.

Additionally, HomeTool members have access to a qualified database of tradespeople via text messaging, which is an effective way to obtain:

  • A second opinion on a statement of work by another contractor
  • Advice on options when making a large purchase, such as an HVAC unit or water treatment system
  • Expert opinions on and maintenance experience with various brands, to ensure that you purchase reliable products
  • Maintenance assistance on your DIY projects
  • Expert contractors to maintain rental properties, especially if they are in another geographic region
  • Expert care and support for elderly parents or friends who need assistance with their home maintenance needs and home projects
  • Assurance to alleviate concerns when an appliance or home system fails

In many cases, members can save up to 20% on labor costs (up to a maximum savings of $2,000), when utilizing a HomeTool contractor. Specific rates and savings always need to be confirmed prior to requesting work be performed.

 

What Types of Services and Benefits Does HomeTool Offer?

HomeTool offers access to a wide range of indoor/outdoor service providers to keep your home fully operational and aesthetically attractive. Members can use the HomeTool app to schedule:

  • HVAC
  • Electrical Services
  • Interior or Exterior Painting
  • Appliance Installations and Repairs
  • Exterior Power Washing
  • Gutter Cleaning and Repairs
  • Drywall Repair and Painting
  • Pest Treatment
  • Garage & Gate Installations and Repairs
  • Pool and Spa Services
  • Moving Services
  • Construction and Remodel Services
  • and much more…

 

What We Like About HomeTool

  • Alternative to Home Warranty Plans
  • Higher-Quality Pros than Home Warranty Plans & Lead-Gen Sites
  • Convenient Contractor Scheduling
  • Low Cost of Membership
  • BBB A Rated Professionals with Links to BBB Business Profile Pages
  • Access to Experts
  • Ease-of-Use
  • Proactive Approach to Home Care
  • Up to 20% Off Labor Costs
  • Potential to Expand Membership Benefits Over Time

 

Opportunities for HomeTool

  • Become known for smart homeownership (e.g. the AAA for homeowners)
  • Establish a leadership role within proactive/prescriptive home maintenance
  • Forge strategic partnerships to expand benefits to members (e.g. home insurance, purchasing power for prescriptive home products, knowledge sharing, etc.)
  • Facilitate a trustworthy community and marketplace for homeowners and contractors
  • Offer higher-tiered pricing for VIP Level Benefits
  • Grow their membership base by offering virtual appliance repair services

 

Challenges for HomeTool

  • As HomeTool introduces new features and services, they will likely be susceptible to “imitation” by competitors
  • HomeTool will need to maintain sufficient benefits to keep homeowners and contractors loyal to the HomeTool marketplace
  • HomeTool is not alone in having to deal with “The Amazon Prime Effect on Homeowner Expectations“
  • HomeTool, as do all contractor networks, needs to take a more proactive approach to vetting contractors, incorporating a wider range of  reliable data, information & services
  • HomeTool will need to meet the challenge of the proliferation of fake reviews and ratings for professional services and invest accordingly

 

The Future of HomeTool & Home Maintenance & Improvement

Neither lead-gen nor home warranty companies work in the best interest of today’s homeowners. In fact, today’s home care model should be one that looks to prevent failure rather than one that waits for an incident to occur.

We believe that HomeTool’s mission is headed in the right direction, correctly anticipating the future trends of home care and improvements. Though they may not currently have all of the features that we can envision in their future, we are confident that their evolution will include some of the following capabilities in some form or fashion:

  • Mentoring homeowners on specific subjects, e.g. via webinars and interactive chats
  • Facilitating a trustworthy, private online community of homeowners, contractors and trade professionals
  • Providing Membership Buying Power, e.g. members-only rates similar in spirit to AAA
  • Forging Strategic Partnerships with other disruptors, such as Hippo Home Insurance for group discounts, and credible third-parties for reliable Energy Efficiency Ratings
  • Encouraging Membership Certifications that foster good home maintenance and signal best-of-breed home maintenance to the local real estate market
  • Incorporating reliable methods to manage properties remotely (e.g. investment properties, aging adults, vacation homes, etc.)
  • Offering Virtual Home & Appliance Repair services for added convenience
  • Investing in technology, services and partnerships to improve the utility and veracity of professional reviews and ratings

 

Closing Thoughts

If HomeTool becomes synonymous with being a helpful, trustworthy community of high-caliber industry professionals and experts, we are confident that they will play a leadership role in the home care industry.

At Purgula, we are always supporters of industry disruptors who understand the needs of homeowners, while pursuing new ways to make homeownership a better experience. In HomeTool’s case, we are rooting for them to become an invaluable and trustworthy resource for homeowners.

 

 

HomeTool Resource Links

 

Additional Resource Links

 

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