How Home Builders Can Benefit From A Home Warranty

Traditionally, a home warranty is an option best suited for new home buyers. It provides coverage for the basic appliances and systems in that new home. This helps to lessen the burden of a system or appliance breaks down shortly after purchase when finances may be tight.

It is also a benefit for those selling their home or even real estate agents. Not only can a home warranty be inviting for those looking to purchase a home, but it can also protect these systems and appliances while the home is on the market.

For those building a home for new homeowners, a home warranty can be very beneficial and protect them from various risks to their livelihood. This particular type of home warranty is often referred to as a home builder’s warranty.

What is a Home Builder’s Warranty?

When a contractor builds a home, they are doing it to make a profit. When an issue arises with the home, due to unexpected problems or structural issues, it can eat away at the builder’s profit. Fortunately, warranties for home builders offer protection from these losses.

A home builder’s warranty provides protection for any damage that occurs to the major structural elements of a newly built home. Issues, such as structural defects or other problems a home buyer may face when moving into a new home are often the responsibility of the builder to repair.

These repairs can be quite costly and problematic for the contractor. One major issue could potentially cost the contractor more than what was made off of the home. A home builder’s warranty protects them from these types of issues.

What Does the Home Builder’s Warranty Cover?

A home builder’s warranty can cover three main aspects of the newly built home. The main aspect is the structural aspects of the home. This provides insurance-backed protection for the framing systems of the roof and floors. It also provides coverage for the foundation and footings, as well as beams and columns.

The builder’s warranty can also provide protection for the distribution systems of the home. These are often the inter-workings found behind the walls. This can include the supply and waste piping. It also covers ductwork and electrical wiring.

A home builder’s warranty can even cover the workmanship of the home. Basically, this is coverage for the quality of the parts that make the home beautiful and practical. This includes things like roof covering, cabinets, flooring, drywall, carpeting, and even the paint on the walls. This coverage provides protection against issues with how well and how complete the finished home comes together.

The structural aspects of this protection cover major defects for up to ten years. For the systems in the home, the warranty offers protection for defects for up to two years. Protection for the quality of the workmanship provides a full year of coverage.

What are the Benefits for the Builders?

There are many benefits that a builder’s warranty can provide for the home builder. Just having a builder’s warranty can create confidence for those purchasing the home being built. This is because it is a third-party validation that the work quality is solid and can help set the company above competitors.

By law, a home builder is responsible for the costs that come from any structural defect in a home that they built for the entire time of repose. This can be anywhere from three to ten years, depending on the state. The more home’s the company builds, the more at-risk of a structural defect they are.

With every single call due to a defect or problem with the workmanship, the home builder loses money. Not only does this diminish profits, but it could potentially cost the builder more than they made. A builder’s warranty offers coverage for these calls to help protect the builder’s bottom line.

What are the Benefits for the Home Buyers?

Many people enjoy the great benefits of having a home built for them as opposed to buying a prebuilt home. The home can be designed any way they wish to create a more comfortable environment that meets their needs instead of making do with what is already there. Newly built homes are also more energy-efficient and can be customized to meet almost any aesthetic.

With the newly built home, however, there come many risks. Serious structural defects could make the home uncomfortable or even unsafe. Issues with workmanship could be very displeasing for an individual trying to own their dream house. Distribution systems that do not work can even diminish any energy-efficiency the home may have had.

A home builder’s warranty protects the homeowner from many of these issues. First, they can feel confident in knowing that their builder is reputable because they are able to get a third-party company to back their work.

They can also feel confident in knowing that if they find any problem, they can get the issue repaired to help meet their personal needs or desires for the home. With a home builder’s warranty, homeowners can be assured that the problem will get repaired, which can be a worry for some homeowners facing problems with their new home.

What are the Cons of a Home Warranty?

As with everything, there are pros and cons to purchasing a home builder’s warranty. The negotiations of the warranty can be long and confusing. A homebuyer may feel too secure in their warranty only to find that they were not covered when they thought they were.

For those unfamiliar with the warranty process, it may be a good idea to have an attorney look over the contract before signing. At the very least, be sure to read everything in it. This ensures that what is covered and for how long is known before signing.

Homebuyers may also face issues when non-covered items were damaged due to a structural problem with the home. Typically, small cracks in bricks, tile, or drywall, even if caused by structural damage, are not covered by the builder’s warranty.

For builders, sometimes the approval process can be lengthy. They require long and detailed applications that require references and contact information from past buyers. They may even require financial statements. This can delay the closing of the house.

A home builder’s warranty, even with the potential drawbacks, is a very important, and in some cases, a necessary part of building or buying a newly built home. It provides affordable coverage to protect the builder and ensure the homeowner has a comfortable and safe home.

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