What’s The Difference Between A Builder’s Warranty & A Home Warranty?

 In Blog, Real Estate Questions

Buying a new construction home comes with a lot of perks. The home is fresh and new, and you’re the first person to put your own mark on the space. In many cases, if you’re working with a builder, you can even customize the home to make it truly yours.

New construction homes are more popular now than ever. Since the recession of 2008, we’ve seen sales of newly built, single-family homes rising rapidly. In 2017, these sales rose by a startling 9.1% in a single year. With such a big push for new homes, home buyers are starting to ask more questions to make sure they’re getting a good deal for their money. 

One of the most confusing parts about buying a new construction home is the builder warranty. These warranties come with most new construction homes, and it’s a way for the builder to assume the financial responsibility if something breaks. However, it’s not as clear-cut as it sounds on paper. Keep reading to understand what exactly this builder warranty is and what it covers.

 

 

Home Warranty or Builder’s Warranty

First, let’s identify what’s different about a home warranty vs a builder warranty. They sound very similar which leads to a lot of confusion, especially for first-time buyers. Despite the name, they’re not the same thing. 

A builder warranty covers only new construction homes or homes that were remodeled recently by a builder. You’ll discover that most newly built homes include some kind of builder warranty with the sale. 

So what’s a home warranty? A home warranty is a type of assurance that covers the property, appliances, and household systems. Everything from the ovens to the electrical system might be included in a home warranty, and these need to be purchased by the buyer with the home. 

 

 

What is Included in a Builder’s Warranty

Now that you understand exactly what a builder warranty is and how it differs from a home warranty, let’s talk about what’s actually covered. This usually depends on the house itself. Not everything in the builder warranty will be covered for the same amount of time. In general, smaller repairs will only last for up to a few months, while “bigger” defects might last up to 10 years. 

You can count on your builder warranty including the following:

  • Roofing
  • Concrete foundations
  • Clapboard and shingles
  • Carpentry
  • Thermal cover
  • Waterproofing
  • Doors and windows
  • Plumbing
  • Electrical
  • Heating and cooling
  • Septic system

As you can see, these are big structural aspects of the home that are costly to replace. If you experience a problem with any of these things above, it’s likely that something went wrong during the building process. New homes don’t usually have unsafe roofs, for example, so that’s why these things are covered under the builder’s warranty. 

 

 

What Isn’t Covered in the Builder’s Warranty

Not everything is covered under your builder warranty. It’s best to think of this warranty as including coverage for things that have to do with the home’s materials or the craftsmanship. Here’s what you shouldn’t expect to be included in your coverage:

  • Appliance repairs
  • Fading paint
  • Minor cracking
  • Weather damage
  • Insect damage
  • Damage from work completed after the builder finished the home

 

 

Basically, your builder warranty won’t include damage that isn’t likely to have resulted from their own craftsmanship. If you damage your home due to poor maintenance or there’s bad weather, this won’t be covered in the warranty. 

It’s a good idea to talk to your real estate agent or a lawyer about what is and what isn’t included in your builder warranty when buying a home. You don’t want to find yourself paying out of pocket later on for something you thought was included. A builder warranty is a great way to feel more secure in your purchase, but it won’t get you out of every type of damage or problem that comes with owning a home. 

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