When purchasing a structural warranty, it’s important to know your chosen warranty provider and understand the warranty agreement’s protection you’re offering your home buyer. A proper understanding saves you time and simplifies the process when a buyer comes to you with a question, and ultimately helps protect your reputation and the trust you’ve established if there’s a claim. Here’s a breakdown of what you need to know.
Get to know your warranty.
Structural warranties follow a 1, 2, 10-year model and include:
• One-year surety coverage–protection against defects in materials and workmanship beginning on closing day.
• Two-year surety coverage–protection against defects in electrical, plumbing and mechanical distribution systems beginning on closing day.
• Ten-year structural warranty–comprehensive coverage for protection against major structural defects beginning on closing day.
Beyond the basics.
Use the following checklist when considering a warranty partner and warranty solution:
- Homeowner education–language within the warranty contract that accurately and clearly defines what is and is not covered under the warranty.
- A platform for quick dispute resolution–arbitration provision and an experienced warranty administration team skilled in quick and efficient conciliation of disputes and resolution of homeowner complaints.
- Residential Construction Performance Guidelines–as defined by the National Association of Home Builders.
- Flexibility and stability–make sure your warranty insurer is financially strong and the warranty is transferable throughout the ten year term.
- Builder advice–for warranty service and risk management –this could come in the form of seminars and educational materials.
- A solid reputation and experience with your business–look for Better Business Bureau ratings of “A,” and favorable recommendations from industry associations.
- Comprehensive coverage–includes coverage for soil movement and qualified structural defects starting day one.
- Adding value–does the warranty provider offer materials to help you market to home buyers.
- Warranty contract language–does the warranty contract accurately and clearly define what is and is not covered.