Everything a Buyer Should Know About Home Warranties for a New Construction Home
A home warranty for a new construction property is a service agreement that helps to cover the cost of specific repairs and replacements. It is common for builders to include a warranty as part of the sale, and sometimes, sellers offer one as an added perk to attract prospective buyers. Homeowners have the option to purchase a home warranty independently for added peace of mind.
In this article, we will take a closer look at everything a buyer should know about home warranties for new construction homes in Frisco, TX.
What a Builder Warranty Covers and What it Doesn’t
A builder’s warranty applies to brand-new construction and major remodels, providing prospective buyers with the confidence they need that the craftsmanship meets professional standards. Most builders guarantee their work for a period of 6 months to 2 years.
Commonly Covered in New Construction:
- Craftsmanship and installation quality.
- Structural elements such as framing and concrete slabs.
- Building materials and finishes, including windows, doors, drywall, and paint.
Commonly Excluded in New Construction:
- Household appliances, such as dishwashers, ovens, and refrigerators.
If you are interested in purchasing protection for appliances or other systems, you can buy a separate home warranty plan.
Pro Tip: Before signing with a builder, request the full warranty terms, including what is covered, what is not, and the duration of protection for each component, so you know exactly where you stand.
Home Builder’s Warranty Vs. Home Warranty Vs. Home Buyer’s Warranty: What’s the Difference?
While these three types of warranties all sound similar, they differ in many ways, mainly in who provides them, what they cover, and how long the coverage lasts.
Builder’s Warranty: Offered typically by the construction company, a builder’s warranty often covers defects in artistry and materials in a newly built home. Coverage generally lasts from six months to two years and is designed to provide homeowners with peace of mind regarding the quality of the build.
Home Warranty: A standard home warranty is a service contract that you purchase separately, typically on an annual or monthly basis. It helps cover the cost of repairs or replacements for specific home systems and appliances due to wear and tear. You’ll usually pay a flat service fee when filing a claim out of pocket.
Home Buyer’s Warranty: Often included as part of a real estate transaction, this type of warranty is offered by the seller or builder as an incentive for prospective buyers. Coverage details and the person responsible for payments are often outlined in the purchase agreement.
Understanding all the key differences can help you choose the right type of warranty for your situation – whether you are building, buying, or protecting your current home.
What to Know About Buying a Home Warranty
Before signing up for a home warranty, take the time to review the contract carefully, especially the coverage details and exclusions, to avoid unexpected costs and frustrating claim denials down the road. Here are some essential things to keep in mind before purchasing a home warranty:
- Exclusions are Part of the Deal. No matter how appealing the sales pitch sounds at first, every home warranty plan has its limitations. Always read the fine print to understand what is not covered. For instance, a plan might include air conditioning systems but exclude specific components, such as coils. Plumbing is also something that may be covered, but only certain types of repairs, not leaks or clogs.
- A Home Warranty is Not Insurance. Some companies will use terms like “deductible,” home warranties are different than homeowners insurance. They often cover repairs or replacements due to wear and tear, not damages from natural disasters or theft.
- Coverage Limits Apply. Most plans cap how much they’ll pay per repair or item. If a fix costs more than the limit stated in your contract, you will be responsible for the difference in price.
- Claims Can be Denied. Your claim may be rejected if you make any unauthorized repairs, alter the appliance or system, or fail to maintain it properly. It is essential to follow the company’s procedures closely.
- Replacement Costs Might Not Be Fully Covered. Many home warranties take depreciation into account, meaning you may be out of pocket when replacing older systems or appliances, even if they are “covered.”
Final Thoughts
A home warranty can offer valuable peace of mind by providing coverage for unexpected repairs or replacement costs, but only if you understand exactly what you are signing up for. Could you take the time to compare different plans, read the fine print, and ask questions about what is covered, what is excluded, and how claims are handled? Whether you are buying a newly constructed home, purchasing an older property, or looking to protect your investment, knowing the differences between builder warranties, standard home warranties, and buyer-incentive warranties will help you to make the best-informed decision. Trust the real estate professionals at Tonya Peek Real Estate Group to guide you in finding and settling down in the home of your dreams in the many beautiful new construction Frisco, TX neighborhoods today!