Warranty Woes for Frustrated Builders


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Today, the homebuyer/homebuilder relationship is akin to that of a parent and child. While builders will typically provide a workmanship warranty for one year, the relationship often lasts much longer unless builders adopt tough-love parenting strategies and push their buyers into accepting responsibility for their own homes. Sound familiar?

Unlike parenting, builders have options for dealing with these “kids.”

Option 1: As a builder, you can self-perform your warranty in house—think biological parents. In this option you need to have staff in place to answer the phone, including 24-hour emergency service; schedule trades; perform walkthroughs; have a warranty that is in compliance with approved standards; and document everything.

Typically, in this scenario your project manager or superintendent is the lucky guy doing all these tasks. The best super, or parent in this analogy, is usually someone who is good at setting a fire under subs and getting things done, though maybe not an  awesome  people-person.  If you’re asking your not-so-good people-person to be friendly with your buyers as they criticize everything he has done for a year, that sounds like the precarious teen-parent relationship to me.

RELATED: Managing Warranty Costs After Closing

Option 2: Outsource it to a third party—think Mary Poppins. As in the movie, Mary Poppins wasn’t all about yes, yes, yes. She made the kids take their medicine, albeit with a spoonful of sugar. Mary is a third-party parent, and in this case, the kids will behave differently than they will for their own parents. She can set expectations for them and manage them for the year. Mary will handle all the trade scheduling and, of course, we know her people skills are outstanding. I mean, who doesn’t love supercalifragilisticexpialidocious?

Option 3: Totally ignore and neglect your children. This will certainly involve social services and attorney’s fees. Parents who go this route don’t typically have more kids or the best reputation. Builders who use the same approach with their buyers can expect a similar fate.

Consider your options wisely and all the costs involved in those options. That includes hard costs, like materials, studs and screws, as well as soft costs, like lost production while the superintendent attends to warranty concerns, or the office staff’s time spent answering phone calls and scheduling trades. Soft costs are hard to put a number on, but they add up—often faster than the hard costs.

Bill Armstrong
Bill Armstrong
Bill Armstrong owns ProHome Colorado, a third-party warranty administration provider. He serves single-family and multi-family builders and developers for new construction and turnover services in the for-rent sector. He can be reached at [email protected].


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