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Do New Construction Homes Come With A Warranty?

new construction home warranty

Do New Construction Homes Come With A Warranty?

One of the biggest advantages of a new construction home is that pretty much everything from top to bottom is brand new.  Being brand new does not mean picture perfect though as there still can be problems/issues lurking in a new construction home.  Buyers of new construction home have the option to have a home inspection performed and the inspection usually is done in multiple stages as the progress of the home is completed.  In this article new construction home buyers can learn what sorts of warranties and guarantees they may get after they close on the home.

New Construction Home Warranty

The warranty coverage and warranty time frames will vary builder by builder and buyers need to understand what type of warranty they are getting before they sign on the dotted line.  By working with a real estate agent or real estate attorney the buyer can have someone in their corner representing their best interests.  Warranties for things like appliances installed in the house will be passed onto the buyer by the builder after closing on the house.  So if for example the refrigerator goes bad the buyer will need to contact the refrigerator manufacturer to get service for it.  On the other hand, if the issue is related to the warrantyinstallation of the appliance then the builder should be taking care of any defects related to the appliance installation.

Many builders offer a one-year general warranty on the home which covers defects outside of normal wear and tear.  Some things like minor settling cracks might be addressed with an application of paint and/or filling depending on the size of the crack.  If the settling is more major then the builder may have to do more to make the repair.

Builders can give warranties that last longer on things like the roof, siding, brick work and more.  Ultimately what the builder offers should be fully understood by the buyer before committing to a new construction home purchase.  The buyer should be asking the builder about any questions beforehand.  If working with a real estate agent or real estate attorney they should also be consulted to get answers to questions about the builder warranty. 

New Construction Home Inspection

New construction home buyers should be getting a home inspection and many builders will allow an inspection.  The typical new construction inspection involves inspecting the home at multiple stages as the home goes from empty land to completed home.  The buyer should ask their inspector what stages they will inspect the home and what do are they looking for.  Buyers should also ask for sample inspection reports so they know what to expect when they get the report.  

While builders will work with inspectors and accept correction request during the build process, time is of the essence.  If the buyer delays making a request that needs to be addressed prior to drywall going up and the drywall has been put up the buyer may have to spend the extra money it costs the builder to make essential repairs and replace the drywall.  So the buyer needs to be on top of everything time wise to get the best results out of the inspection.

The home inspector should also be performing an inspection of the home one to two months prior to the ending of the home warranty.  By getting an inspection at this time the buyer can notify the builder of any potential issues they will need to take care of within the warranty period.  As the home buyer paid for the new construction home warranty when they purchased the home they should be making sure they take full advantage of it to ensure their home is in good condition.

Real estate expert Bill Gassett of Maximum Real Estate Exposure says a new construction home inspection is a wise investment in the home-buying process.
Many people wonder whether a new construction home inspection wastes money. By no means is that true. While homes typically undergo an inspection process through the city or town, it is not nearly as detailed as a professional home inspector.
Most of the time, no glaring deficiencies will be found; however, an inspection is more than finding severe issues. It can be an excellent learning experience. Most excellent inspectors will explain the operation of major systems in a house and cover all the aspects of maintenance some owners may not know about.
For example, if you own other homes with public sewers and purchase a property with a septic tank, they will explain what's needed for upkeep.
The bottom line is for the cost involved, it's well worth the money.

Dealing with New Construction Home Issues Before Closing

Prior to closing, the biggest tool a new construction home buyer has it the ability not to close if there are major issues with the house.  The buyer simply saying there are major issues without proper documentation or proof will likely be a losing battle for the buyer as the builder contracts are heavily stacked in favor for the builder.  Builders usually include mandatory arbitration clauses, closing delay penalties which raises the costs for the buyer and more.

If there are major defects in the home the buyer needs to document them through an independent inspection report or written opinions from licensed contractors.  If the defects prevent the buyers from living in the home then they have a very strong case problemto delay closing and may be able to avoid closing until those defects are addressed.  If problems do arise prior to closing and the builder is less than cooperative about dealing with the issues then the buyer needs to get in touch with a local real estate attorney to help them navigate the contract terms.

In the situation where the defects do not prevent the buyer form moving into the home on closing the builder should provide the buyer with a timeline of when they will make the repairs.  Sometimes the builder may not have contractors available to handle the repairs prior to closing and might have to address it after closing.  Where the builder offers a one-year home warranty if the defects are not major then they may address all those defects towards the end of the warranty period.  For major defects during the warranty period it is usually in the builders best interest to address it as soon as possible as sometimes those defects can get worse over time and/or cause larger more expensive repairs the longer they are left unaddressed.

Builder Won’t Make Repairs?

What options does the buyer have when the builder won’t make repairs under the home warranty terms?  If prior to closing the buyer can always refuse to close until the repairs are made.  The builder will likely have terms in the contract that say the buyer will have to pay extra for any delay in closing.  Sometimes builders will not be able to complete repairs prior to closing due to lack of contractor availability.  If the issues are not major and the home buyer can move into the house and live in it, then refusing to close could be a lost cause.

If the builder is refusing to make repairs under the warranty terms after closing the buyer needs to make sure the repair requests are something that are covered under the warranty.  As noted above, normal wear and tear are typically not covered under a new construction warranty.  If the buyer is not getting anywhere with repair requests with the builder they should consult with a real estate attorney to get input as to whether the issues in question are things covered under the warranty and what would be the next steps in order to get the builder to honor the warranty if that is determined to be the case.

Final Thoughts

Buying a new construction home can be an exciting time but the buyers need to keep an eye on the building process and having an inspection can be a great help.  Making sure to report timely to the builder any inspection issues discovered is also important too to make sure the builders can address the issues at the right time.  Where the buyer and builder can’t reach agreement then involving a real estate attorney would be in the best interest for the buyer.

Addtional Resources

About the author: The above article “Do New Construction Homes Come With A Warranty?” was provided by Paul Sian. Paul can be reached at paul@CinciNKYRealEstate.com or by phone at 513-560-8002. If you’re thinking of selling or buying your investment or commercial business property I would love to share my marketing knowledge and expertise to help you.  Contact me today!

I service the following Greater Cincinnati, OH and Northern KY areas: Alexandria, Amberly, Amelia, Anderson Township, Cincinnati, Batavia, Blue Ash, Covington, Edgewood, Florence, Fort Mitchell, Fort Thomas, Hebron, Hyde ParkIndian Hill, Kenwood, Madeira, Mariemont, Milford, Montgomery, Mt. Washington, Newport, Newtown, Norwood, Taylor Mill, Terrace Park, Union Township, and Villa Hills.

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