What Every New Home Sales Team Must Know About Structural Warranties
Enjoy this Guest Blog Post from 2-10 Home Buyers Warranty who partner with thousands of the nation’s finest home builders, service contractors and real estate professionals to provide the industry’s gold standard protection. 2-10 Home Buyers Warranty is a Sponsor of The Jeff Shore Sales Leadership Summit.
WHAT IS A STRUCTURAL WARRANTY?
A structural warranty provides a written agreement between the home builder and the home owner.
It specifies the home builder’s responsibilities, rights and obligations as well as the home owner’s responsibilities, rights and obligations.
Under the agreement, the builder is the insured and the home owner is the beneficiary.
In a typical structural warranty agreement, the home builder warrants that a new home has been built in accordance with national construction guidelines.
Additional coverage is available for workmanship and systems.
For homes that require a HUD-approved warranty, the builder may purchase a structural warranty from a HUD-approved Plan issuer.
A Plan issuer can be a state, Warranty Company, risk-retention group, HUD-approved builder, an insurance company, or any other HUD-approved entity with the required insurance backing.
1.1 billion dollars has been paid out by the insurance-backed warranty industry repairing homes.
WHAT THE SALES PROFESSIONAL CAN TELL A HOME BUYER WHEN PURCHASING FROM A BUILDER WITH AN INSURANCE-BACKED WARRANTY.
A structural warranty, from an established warranty provider such as 2-10 Home Buyers Warranty®(2-10 HBW®), gives builders and home owner’s confidence that, if qualified, major structural damages develop in a home, those repairs will be the obligation of the warranty insurer rather than the responsibility of the builder and homeowners.
Home buyers recognize the benefits of a comprehensive insurance-backed structural warranty.
In fact, 94% of prospective home buyers surveyed think a structural warranty is valuable when purchasing a new home.
This means home buyers are more likely to purchase from a builder who offers an insurance-backed structural warranty.
Finally, a home buyer can breathe a sigh of relief knowing that the construction standards are defined and there is a warranty insurer to stand behind the builder’s promise.
WHAT FEATURES AND BENEFITS ARE IMPORTANT FOR HOMEOWNERS?
1) Home owners are protected on day one of home ownership for a period of 10 years.
2) Repairs to all impacted construction materials are included if a structural defect damages other portions of the home.
3) A warranty administration team may help the home owner determine whether their issue is structural or the result of something else.
NOT ALL warranty companies have a warranty administration department, and warranty administration personnel only tell a home owner what items are covered or not.
To determine whether an issue is structural or not, a claim would have to be filed in order for the discovery process to begin.
Did you know the 10-year structural warranty is fully transferable to the next owner if a home is sold within the warranty period-adding value to the home?
WHAT FEATURES AND BENEFITS ARE IMPORTANT FOR BUILDERS?
1) A structural warranty from a third party may include marketing materials, such as a maintenance manual.
The manual provides education for homeowners to make them aware of the importance of home maintenance.
The structural warranty and maintenance manual should explicitly state that the home owner is responsible for proper maintenance of the home.
2) Getting a claim resolved couldn’t be easier for the builder.
The home owner, builder and insurance company all have clearly defined responsibilities and should know what to expect if an issue arises.
3) Structural warranty documents should include binding arbitration verbiage to compel all parties to participate in the arbitration process to resolve issues quickly and fairly.
Learn more about your state’s statute of repose here.
