The Standard 10-Year New Home Warranty

basic 10 year new home warranty

As a home builder, you may be used to providing 1-year new home warranties as standard practice when contracting for a new home. The concept of 10-year home warranties may be new to you, but leading home builders across the U.S. increasingly choose this option. If you’re new to 10-year home warranties, you’ll naturally be curious as to what they will cover. The 10-year warranty is covers Warranted Structural Components and protects you from hazards of implied warranty laws.

American eBuilder, uniquely positioned to address the needs of professionals working in the New Home Construction, Sales and Lending industries, is able to help you effectively, because our team members have had real-world experience in those fields. This expertise allows us professionally and affordably to provide 10-year new home warranties.

American eBuilder offers several different warranties tailored to the needs of residential builders and satisfying the various financing situations their customers may present. With a choice of 10-Year Warranties to choose from, you will be able to fulfil requirements for both HUD FHA/VA financing and standard, conventional financing. Remember, because our new home warranties are customizable, we can provide a warranty that meets your specific needs as a home builder, while offering protection for you and confidence for the buyer. Our warranties add value and provide customers with the peace of mind that only an American eBuilder Warranty can deliver.

The standard 10-year new home warranty features three parts. The first is a 1-year written builder’s limited warranty. The second is a 2-year builder’s warranty, also written and limited to designated systems. The third piece is a 10-year written limited warranty, good for designated structural components.

American eBuilder is an accepted 10-year warranty program for HUD financed homes – FHA and VA. Since the HUD loan market is a huge one, being able to provide new home warranties that HUD-financed buyers can take advantage of dramatically increases your range of buyers and can provide a massive boost for your business.

The bottom line: if you work in the New Home Construction, Remodeling, Real Estate or Lending industries and you need a 10-year new home warranty, contact American eBuilder to discuss your needs and options.

Your 10-year home warranties can be structured a number of different ways, as follows:

The “2+8” HUD (FHA/VA) Approved Warranty is available in most states and can be used on HUD financed homes.  This warranty includes:

  1. A 2 year written builder’s limited warranty;
  2. A 10 year written limited warranty on warranted structural components

 

The optional “1+9” warranty is available in most states and can be used on non-HUD (FHA/VA) financed homes.  This warranty includes:

  1.  A 1 year written builder’s limited warranty;
  2. A 10 year written limited warranty on warranted structural components.

 

Standard 5 year Remodelers Warranty

This warranty is patterned after the “1+9” warranty except the structural components are warranted for 5 years.


More Details

In the first year, the builder agrees to correct defects in workmanship and materials as specified in the warranty. Generally, this addresses call back items typical in a new home (often referred to as a 30 day or 11-month punch list).

It is a limited warranty, not a maintenance contract. Homeowner obligations and responsibilities are clearly stated. This means the American eBuilder Warranty provides a level playing field and aids in establishing customer expectations. This can help manage the number of complaints that you, as a builder, must handle.

We suggest that you go over new home warranties with your prospective buyers, so they know what to expect. The following are a few examples of possible first year warranty issues followed with specific standards to establish reasonable expectations.

Floor squeaks Builder will correct if caused by a defective joist or improperly installed or loose subfloor.  An isolated floor squeak is not a Warranted Defect. A squeak-proof floor cannot be guaranteed.  Squeaks can be caused by wood shrinkage, temperature and humidity changes and other factors beyond the Builder’s control.
Condensation or frost on interior window surface Not a warranted condition Condensation can occur on various types of windows. Temperature, humidity and living conditions can cause condensation.
Nail pops, trowel marks, tape blisters Builder will repair nail pops which have broken finished surface.  Marks and blisters must be readily seen by visual inspection at a minimum distance of 6 feet under normal light conditions. Minor depressions and slight mounds at nail heads are not warranted conditions.
Chips, cracks, scratches in countertops, cabinets, fixtures, or appliances Not a warranted condition. These conditions should be identified on a pre-closing walk-through inspection list.

 

In the second year, the warranty covers defects to delivery portions of the major systems.  Major systems include:

  • Pipe system
  • Septic system
  • Electrical Wiring system
  • HVAC ductwork


Warranted Structural Components

One of the advantages of providing the American eBuilder Warranty is its specific application to warranted structural components. This replaces the concept of using a definition to identify major structural defects. Homeowners have a written explanation of clear tolerances of structural components, which the program warrants.

Here is one example:

Cracks in structural poured concrete floor systems. Warrantor will repair cracks greater than ¼ inch in width and ¼ inch vertical displacement and floor covering directly affected by the crack. Warrantor will match finish as closely as possible.

 

The examples provided above are for illustration purposes only. Specific and detailed warranty coverage, terms and conditions, and exclusions are stated in the warranty book assigned to a specific address.

You should review the home warranty you will be providing before delivering it to the client. That way you can address any concerns and point to where they may or may not be covered in the warranty. When you do review the warranty with the client, remember these new home warranties are customizable.

Thanks to American eBuilder’s online, on-demand service, you can have a warranty on hand almost immediately. This way, there is virtually no reason your buyers should not be happy with the 10-year home warranties that you provide to them, meaning a smooth closing and fewer problems down the road.