What you should know about new construction warranties

New construction homes continue to pop up around the Triangle, answering the demand for homes across the region. If you’re one of the many who are considering buying a new home, it’s an exciting time to build a home in the region. Before your home is finished, it’s important that you understand the warranty on your new home so you can approach your purchase with peace of mind and with the right approach to caring for your new home.

Sherri Felton, Executive New Construction Manager for The Jim Allen Group, encourages potential buyers to work with a real estate agent who understands new construction. With an agent on your side, you will fully understand what is covered, how long warranties last, and how to handle any issues that may arise. Here’s what she says you should know before you officially move into a newly built home.

Felton encourages buyers to check with a builder to clarify what their warranties cover. “Each builder is different,” she said. “But every builder in North Carolina is held to a standard. There is a statute written that they have to warranty the home against defects for six years in North Carolina. That’s called a structural warranty.”

North Carolina’s six-year structural warranty follows standards recommended by the state. Felton said she reviews the state’s guidebook with buyers to help them understand what is covered and what isn’t. For instance, she said, “A hairline crack in the driveway is not a warranty item.”

She further explained that builders typically offer a warranty that covers the home “bumper to bumper” within the first year. “The systems like the dishwasher, the microwave, the water heater, the HVAC, also come with their own warranty or a manufacturer’s warranty,” she said, adding that a good agent will go over those warranties with a buyer to ensure they understand their coverage and what the buyer must do to protect their systems. “It’s important for them to fill out those warranties.”

Felton also said North Carolina builders are not required to have a written warranty but that many builders offer an express warranty that covers defects and is also reviewed with the buyer.

Felton said she always recommends a home inspection, even on new construction. “I always recommend they do it because it will find the small stuff up front that, after a year, could become something big,” she said. “After the year, it may not be a warrantied item because it was not handled. It’s important to do those things up front.”

She also said it is standard for most builders throughout the Triangle to do a one-year warranty walk-through and that she recommends buyers contact the builder at the 11-month mark to ask for the walk-through and to be prepared with notes of what, if anything, should be repaired. “That’s a courtesy the builder will do,” she explained. “We tell (buyers) that throughout the first year, if there are things like a nail pop or some crown separation, just keep a list of it. We’ll handle it once.”

Warranty items, however, are related to the home’s ability to function and should be tackled with the builder or vendor if there are issues. “If your front door won’t close and lock anymore, then that’s an item you call the builder for,” she said. “If you have an electrical issue, or plumbing, or anything that is not working correctly, that would be covered that first year. We give them a vendor list at closing. If there are emergencies — plumbing, electrical, things like that— they can call the vendor directly.”

Felton encouraged homeowners to understand the difference between warranty and courtesy repairs and what must be maintained by the home’s owner. “I’ve had, on several occasions, items that have come up that were homeowner maintenance items. They are not warrantied,” she said. “People tend to think that you just hand the inspection report over, and the builder will take care of everything on it. That’s not how that works.”

For example, landscaping is not included under a warranty. “Once you close on a house, your landscaping is yours because we don’t know how you take care of it,” she said, and added that most buyers tend to be aware of what fits under homeowner maintenance, but should be aware regardless. “When you live at home, you’ve got to take care of it. So, if you’re not taking care of those things, you run the risk of something happening that’s not a warranty item.”

If you’ve built your home but are already thinking about making updates, Felton said to either wait altogether or talk to your builder because even simple updates could void your home’s warranties. An example she gave was the popular Nest thermostats, which provide energy savings for homeowners. If a homeowner installs one and issues occur, Felton said it could void the entire electrical warranty for the home.

“I tell people when we’re doing the orientation walk-through before they close, ‘Within that first year if you plan on doing anything to your house, use the vendor that the builder used. That way, you’re not taking the chance of voiding that warranty.’” Her suggestion is to either talk to the builder or call the original vendor to do the work so it remains covered under the warranty. “It may cost a little bit more than you handling it yourself, but at least you’re protected,” she said.

One of the most important things buyers can do, Felton said, is to ensure your agent understands the nuances of new construction.

“A lot of general brokerage REALTORS^® don’t sell a lot of new construction, so they don’t know the process themselves,” she said, adding that your agent should be willing to ask questions of the builder to ensure a transparent process. “If you’re building a home, there are certain inspections that you’re going to go through throughout the building of that home. They need to be at those meetings — the design meetings, the inspection, all of those. That way, they can gain that knowledge and be knowledgeable on the next transaction, too.”

If you’re ready to consider new construction, start by finding a trusted real estate agent who can guide you through the process. New construction real estate agents will be your advocate throughout the process and will keep the project running smoothly so you can build the home of your dreams.

The Jim Allen Group provides access to information on this blog/website as a public service for educational purposes only. Although reasonable efforts have been made to ensure that all of the information made available is current, accurate, and complete…[read more]