How builder's warranty management works: What you need to know.
Updated: Dec 3, 2020
What is home builder’s warranty management?
If you’re like most builders we know, once you’ve finished building a new home, you’re keen to move on to building the next one. But dealing with the details of warranty calls on previous builds is slowing you down. (And giving you a stress headache into the bargain!)
Some homeowners are easy to please, but others make warranty calls for weeks or months after moving in. You want your home buyers to be happy, but you also want your work life to be simpler.
Builders warranty management is the answer.
If you partner with a builder’s warranty management company, your partner answers homeowners’ phone calls, determines which claims are covered by warranty, and takes on the task of scheduling your subs to make repairs. You also don’t have to deal with unpredictable costs — because warranty management is all taken care of with a one-time, upfront fee.
There are some ‘third party warranty management’ companies out there who don’t do much more than answer the phone and re-route a homeowner’s call to you! This article is about how builders warranty management should work. (It’s how we at ProHome do things!) It’s what you should expect when your builders warranty management company is a true partner, helping you take care of your homeowners.
A warranty management partner doesn’t just answer the phone 24/7/365 (so you don’t have to!). We also educate homeowners, answer their questions, visit their homes, arrange for your subs to perform repairs — and keep meticulous records of everything! No more niggling worry that you forgot to respond to a homeowner’s warranty call, or that you’re not sure if the sub completed the repair. We take that all off your mind — so you can focus on building more homes.
So how does builder’s warranty management work, step by step? That’s what this post explains.
1. One-time payment
At closing, you make a one-time payment at escrow. That’s it. You know your cost upfront, unlike if you had to deal with unpredictable warranty calls and repairs yourself. No matter how many warranty calls a buyer makes, no matter how expensive a one- or two-year warranty repair turns out to be, your cost on each home is stable and predictable.
2. New homeowners’ walk through
We understand that the relationship you have with your buyers is important. A happy homeowner is one who refers new customers to you and writes glowing testimonials. Before closing, a trained member of our team — we call them walk agents — will walk through your buyers’ new home with them. Together, we answer the homeowners’ questions, explain how the home’s systems work, and give home maintenance advice. Homeowner education helps reduce unnecessary warranty calls.
3. Dedicated account managers
Your homeowners get to know their builder’s warranty management team — starting with the walk agent who does the walkthroughs for all your homes. Your homeowners will also have dedicated account managers. This means that if they call with a concern, they don’t speak to a random stranger — who might be in a call center on another continent. Your buyers speak with the same small team every time. Our team knows you, your homes, your homeowners, and your subs.
4. Homeowners’ education
To protect their asset, as well as reduce unnecessary warranty calls, it’s important for homeowners to know how to maintain their new homes. We provide that education, starting with the pre-closing walk through and continuing with online how-to videos and maintenance tips. We’re also available to answer their questions and address their concerns. If they call at 3AM because they can’t get the heating to work, we’ll help them out — so you don’t have to!
5. Written builder’s warranty protection
Some states have implied warranties on workmanship, but we make sure everything is explicitly documented. This gives homeowners peace of mind and it also reduces your risk should you ever end up in court. This is because implied warranties can be open to the courts’ interpretation. Our warranty book is based on NAHB’s Residential Construction Performance Guidelines (RCPG) standards. You can choose to use our warranty, your own warranty, your state specific warranty — or some customized combination of those.
6. Homeowner phone calls
We respond to homeowners’ phone calls 24/7/365 — so you don’t have to. We dispatch one of your subcontractors immediately, if necessary.
For non-urgent problems, we use the homeowners’ photos or videos to determine if the issue is covered by warranty. If it is, we schedule an appointment with the homeowner and your subcontractor.
If we can’t make the determination from the homeowners’ photos, the walk agent assigned to your homes will visit the home. They’ll talk with the homeowner, record the details of the problem, take photos, and make the determination. If we determine that the problem is warrantable, we’ll let you know, and we’ll arrange for one of your subs to fix the issue.
If it’s a problem that’s not covered by the warranty, we let the homeowners know. Then we contact you to ask if you’d like to do a good faith repair for them.
If the problem is covered by warranty, we contact your own trusted subcontractors to arrange for them to perform any repairs. There’s no additional fee assessed by us, no matter how complex or time-consuming any warrantable, non-structural repair ends up being.
We maintain careful records of everything: We keep the signed warranty documents on file. We keep records of all homeowner calls. We record if and when a subcontractor goes out to a home. We keep the details about any repairs. These records protect you in the case of a claim against you. If you need to demonstrate in court that you fixed something that a homeowner later claims you didn’t, we’ll have those records to prove it. We store your records for 11 years.
9. Web-based system
Our proprietary software enables you to log in any time to check the records pertaining your customers. Homeowners can also check in to view the status of their warranty claim and repair. (If you don’t have a builder’s warranty management partner, homeowners will call you to find out what’s going on!)
10. 30/60/90 day and Final walk throughs
We offer a first walk through between 30 to 90 days and also a final walk through at 11 months. Homeowners are required to notify us before the walk throughs of any warrantable claims.
11. What happens when there’s a warranty claim?
When homeowners want to make a claim, they use the warranty book we provide to make a list of claims and take photos of the problem. (If it’s an emergency, that gets taken care of right away, of course.) If we can’t determine whether the claim is warrantable from the homeowners’ photos, the walk agent who’s assigned to your builds visits the home. They’ll talk with the homeowner, take photos, and make the determination. We let you know what’s going on in our weekly conversations and you’ll tell us which subcontractor you’d like to address the problem. We schedule the repair with the homeowner and your sub. We keep track of the repair and document everything. Once your sub has finished the repair work, we’ll let you know.
12. Warranties are transferable
Your homeowner can transfer the one-year builder’s warranty on their home to the new owners if they sell the home. If you wish, they may also transfer their second-year warranty to new owners.
If you’d like to learn more about working with ProHome as your builder’s warranty management partner, please contact Matt at (316) 706-0368 or firstname.lastname@example.org today.