Something to smile about: New construction is popular
A recent study from the National Association of Home Builders found that 60% of buyers would prefer a new construction home to an existing one. In a time when housing can be a flashpoint for buyers, this is news for builders to smile about. Let’s look at some of the reasons why buyers might be gravitating more toward new homes.
New construction could cost less in the mid- and long term
Typically, pre-owned homes cost less to purchase than new construction, at least up front. According to a study by the National Association of Realtors, a new home costs $334,100 on average, while an existing home costs $260,000. (Geography and other factors play significant roles in local costs.)
However, buyers might be thinking that new construction homes can be less expensive in the longer term, especially when they come with a high-quality builders warranty (more on that shortly).
For example, it’s extremely unlikely that buyers will need to upgrade or renovate a home you just built right away. Additionally, they likely won’t need to replace older appliances, since either you’re providing them or the buyer is purchasing them themselves. These facts can help reduce the cost of home ownership in the longer term and give buyers an even bigger incentive to purchase new construction.
It could be easier for buyers to know what they’re getting
The market for pre-owned homes is ruthless for buyers right now. Between all-cash competition and sellers who can flat-out refuse to participate in a home inspection, it’s harder than ever for buyers to know what they’re getting.
With a new construction home, buyers may be able to breathe a little easier and more adequately know what they’re spending such a huge amount of money on. There are two things guiding this mindset.
- Because the home is new, they’re less likely to face devastating issues like defects to load-bearing structural elements.
- If they do face such issues, an industry-leading builders warranty from 2-10 Home Buyers Warranty (2-10 HBW) can help all parties resolve the issue.
Why does a builders warranty matter?
A builders warranty (or structural warranty) is incredibly important to owners of new construction homes for three reasons.
1. A builders warranty provides peace of mind
The average structural defect costs between $42,000 and $113,000 to address. Without a strong, written builders warranty, those liabilities can fall onto you (or even your buyers).
When you provide a written warranty—and it’s important that it’s written—your buyers know exactly who’s responsible for what when things go wrong with a new construction home. For example, if you build somewhere like Texas, where the soil moves around a lot, a warranty can protect you and your buyers against structural issues caused by soil movement.
When your buyers know who’s responsible for what when it comes to defects, it takes much of the mystery out of maintaining their new construction home. That can be extremely valuable, especially in a market as hot as this one.
2. A third-party warranty provides validation
One of the biggest questions homeowners ask is, “How do I know I can trust this builder to do the work right?” A third-party warranty helps answer that question for buyers while providing important third-party validation.
For example, 2-10 HBW is the leading provider of third-party structural warranties. To provide the best, most comprehensive warranty on the market, builders must meet certain criteria. They must have good standing and a proven, established record, for example.
The next question homeowners have when they learn this is, “If my builder has a good track record, why does a warranty matter?” The answer is many structural defects occur due to soil movement, which is out of everyone’s control. So, even the best builders who do everything right can still face risks that are out of their control.
Fortunately, a builders warranty from 2-10 HBW covers structural defects caused by soil movement.
When you provide a third-party warranty from the industry leader, it tells your buyers two things.
- The industry leader in structural coverage trusts me to do it right.
- If something goes wrong, I’ve provided you with a powerful solution.
3. A third-party builders warranty shows a commitment to quality
Buyers want to know that your new construction home is top notch. 2-10 HBW provides the most comprehensive builders warranty on the market. It includes the following coverage:
- 1 year of coverage for defects to materials
- 2 years of coverage for major distribution systems (like venting, ductwork, pipes, and wiring)
- 10 years of structural defect coverage
So, when you provide a third-party builders warranty from 2-10 HBW, you’re showing buyers how committed to quality you are in three ways.
- Because building a quality home matters to you, you’re backing up your commitment to quality with a builders warranty.
- You’re working with and covered by the industry leader in structural coverage. That means the buyer’s home and budget are in the best hands.
- If something goes wrong with the structural integrity of a buyer’s home, you pre-emptively provided an incredible solution.
Learn how you can protect your business and add valuable selling points to your new builds with a 2-10 HBW structural warranty.