Why a Home Builder Warranty is Good for Business

For home builders, few things are more important than the quality of the homes they provide. In order to illustrate their commitment to quality, many builders choose to secure coverage through a third-party home builder warranty provider. Builder warranties aren’t just great for offering stronger peace of mind to consumers: They offer many additional benefits that make securing warranty coverage a smart choice for business professionals looking to safeguard long-term success.

What is a Third-Party Builder Warranty?

Builder warranties offer third-party protection provided specifically for newly constructed homes. These warranties are purchased by the builder rather than the homeowner, and coverage is clearly defined by specific building standards for each part of the home, such as:

  • Concrete foundation
  • Roofing and siding
  • Electrical components
  • Landscaping
  • Heating and air conditioning equipment
  • Insulation
  • Plumbing
  • Doors and windows
In most cases, builder warranties aren’t required; unless the prospective buyer is purchasing a home using a VA or FHA loan. However, many states have an implied warranty obligating the builder to provide the homebuyer a dwelling free of major structural defects for 10 years or more. Having a third party builder warranty in place to reduce this liability can provide many advantages for homebuilders.

5 Benefits of Using a Third-Party Builder Warranty

#1 – Avoid Financial Ruin

While general liability insurance might protect your company from injuries and property damage that arise during construction, once the title is transferred to the homeowner, that protection no longer applies. If structural defects and poor workmanship claims creep up later on, the homebuilder that failed to secure a third-party builder warranty will be on the hook for those expenses.

With a builder’s warranty in place, homebuilders have added protection after closing to help reduce financial and legal risks due to structural issues. If a builder doesn’t have a third-party warranty, they could be made financially responsible for any structural components that fail during this period. These costs can be significant: In 2019 alone, U.S. homebuilders paid out $783 million in claims. Without the right protection, it’s easy to see how a building company can succumb to financial devastation.

#2 – Improve Selling Power

Prospective buyers are more likely to purchase homes from builders who are able to offer a warranty. In fact, some studies have shown that an incredible 94% of homebuyers would be more likely to purchase a home from a builder who offered a structural warranty over those that did not.

Not only do homebuyers prefer warranty-backed homes for their higher quality, but structural warranties also offer buyers stronger financial security. By having a warranty, builders will be able to appeal to the emerging market of prospective buyers that demand greater financial stability before making a long-term investment.

#3 – Save Time & Resources

With a third-party builder warranty, homebuilders are able to free up more time to handle operational tasks. That’s because home warranty providers should streamline the logistics of warranty writing, issuing, and recording on their behalf. This way, builders can continue focusing their energy on building quality homes for their customers, marketing their business, and keeping their clients happy.

#4 – Boost Company Marketing

Because builder warranties are such a strong selling point for prospective buyers, they help give companies a needed boost to their marketing efforts. Just by sporting the logo of a trusted home warranty program, builders are able to communicate to customers that they go the extra mile to ensure quality craftsmanship in their homes. After securing a builder warranty, it’s a great idea to weave in new content highlighting the warranty throughout the website so prospective buyers are aware of the protection being offered.

#5 – Help Educate Buyers

While they might live in them day in and day out, there’s a lot that homeowners don’t know about their homes — especially when it comes to structural maintenance and repair needs. Warranties help educate buyers about proper maintenance schedules so they understand where their responsibilities lie when it comes to protecting their investment.

Remember: The more educated homeowners are, the less likely they’ll be to complain about minor concerns and issues. By empowering homeowners with the knowledge they need to maintain their home properly, builders will be able to ensure they remain happy with their purchase for years to come.

Protect Your Homes with Quality Builders Warranty

If you’re a homebuilder looking to improve sales, increase buyer trust, and save time on warranty-related tasks, you need Quality Builders Warranty. For more than 35 years, QBW has proudly served as the nation’s leading provider of 10-year new home warranties for homebuilders. With the most selective home warranty program in the industry, we are confident in our team’s ability to protect the finest builders that the U.S. has to offer.

Get started with QBW by requesting a custom quote today!