What is Included in Builder Warranties and What's Not

Most people would choose to live in a brand new house over one that’s already been lived in. The reasons are simple, it has never been lived in, it has the newest amenities, and the next major repair won’t be for a long time (hopefully).

Builders often times boast their warrant when completing a new home, which is always what homeowners love to hear. It can be tricky when you don’t know what is and is not covered. As confusing as it could be, this is something you absolutely want to know, because they could be a big chunk out of your wallet if you get it wrong.

Here’s what you need to know about builder’s warranties.

Long and short term warranties

Long-term warranties are typically around 10-years, and these cover foundations. God forbid any cracks happen, but if they do within the first ten years, you are covered. Short-term is one to two years, and include stucco and drywall, but don’t include appliances.

Surely you will have more than two warranties

Builders usually offer “bumper to bumper” warranties which are one-year, and is everything but cosmetics. So if you kicked a hole in the wall, this is on you. More than this though, your plumbing and electrical HVAC is covered from 2 to 5 years. Keep in mind; you will also have different manufacturer’s warranties like shingles, windows, and appliances.

There’s such thing as a structural warranty, and the state requires the builder to provide a to-year warranty. This is not in very state though, so make sure you figure out if your state has one.

Covers a list of repairs

Expect to have a meeting with your builder in the first year after closing, but before the one-year warranty expires to go through the house and show him if anything isn’t working properly.  If you get a good builder they will do it twice; once after the 30-day mark, and once at the 11-month mark.

If builder goes under, you’re screwed

During 2008, a lot of builders went out of business, and those home owners who purchased from a builder, were SOL. Warranties become worthless if the builder goes under. Address as many of the issues as you can during the 30-day mark, instead of waiting until the 11-month mark, this way you won’t panic at the news of your builder going under.

It might not be transferable

If you happen to buy a home from the original owner within the first year of its existence, you may or may not be covered. Find out from the builder if these warranties are transferable or not. 

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