3 Myths About Builders’ Warranty Management

Myth 1: All they do is answer the phone, so it’s not worth it

It’s true that some third party warranty management companies seem to be little more than call centers. Random people hired by the company — perhaps on another continent — answer your homeowners’ phone calls and then re-direct the calls to you. We don’t see the point of that either!

However, when you work with a builders’ warranty management partner, the company functions more like an extension of your own team. Here at ProHome, our team gets to know you. Each builder we work with has a dedicated account manager who knows you and the homes you build. A member of our team will be your local ‘walk agent’ who does all the walkthroughs with your homeowners, starting with the pre-closing walkthrough.

This initial walkthrough is an opportunity for us to begin educating your homeowners on home maintenance and the kinds of issues that are and are not covered by warranty.

When we answer your homeowners’ phone calls — day or night, every day of the year — your account manager talks with the homeowners and ‘triages’ their concern. For example, if their heating isn’t working, we ask them questions to diagnose the problem and hopefully simply get things working again. Yes, we even do this at 3 in the morning, and on weekends and holidays, so you don’t have to!
If something in the new home isn’t as the homeowner thinks it should be, we ask them to send us photos showing the issue. Usually, we can determine from the photos if the problem is warrantable or not. If not, the walk agent assigned to your builds goes out to take a look.

If an issue isn’t warrantable, it can be hard for builders to tell their homeowners that. We take on that task — which helps you maintain a positive relationship with your customers. We also let you know about the issue so, if you wish, you can offer a good faith repair.

If an issue is warrantable, we’ll contact your sub and arrange for them to go out to the home to fix the problem. The finished repair is photographed and documented in writing. We maintain all these records for you. You don’t have to try to keep track of which homeowner called about which issues, and whose defects have been taken care of and whose are outstanding.

We’ll maintain your records for 11 years. This protects you in case of future claims. For example, if a homeowner claims in five years’ time that the black mold in their basement is because you didn’t repair a leak that was covered by warranty, we’ll have the proof that you did in fact make the repair. Our meticulous, long-term record-keeping protects you and gives you valuable peace of mind. A true builders’ warranty partner does much more than answer the phone!

Myth 2: Bringing in a third party would mean I’m not taking care of my customers

If a third party doesn’t treat your customers right, that can certainly spoil your relationship with them! Your homeowners will indeed be unhappy if they only ever get to speak to a stranger — perhaps a different one every time they call with a warranty question. Which means they experience the frustration of having to repeat themselves over and over.

But if your builders’ warranty management company is a true partner, who works as an extension of your team, you’re able to take better care of your homeowners than trying to manage warranty work on your own.

Your dedicated account manager is someone you know and who’s familiar with your homes — and they’re available to your homeowners to answer their questions, any time. This provides your customers with peace of mind and convenience. And you can feel good knowing your customers’ phone calls will be taken care of by your dedicated account manager — not answered by a stranger. Your customers won’t have to repeat themselves every time they call because your dedicated account manager will already be familiar with the homes you’ve built and each homeowner’s history with their home.

Starting from the initial, pre-closing walkthrough, our team develops a relationship with you and your customers. We make sure homeowners understand their home maintenance responsibilities and their warranty rights. If they make a warranty call, we help them through the process of making a claim. We help them document everything properly (which also protects you and your business).

Finally, having a partner take care of your warranty work adds a degree of objectivity in your customers’ eyes. If, instead of you saying that claim isn’t covered by warranty, it carries more weight if a neutral party says that. Customers can continue to think positively of you, even when they learn from us that their issue isn’t covered by warranty.

Working with a builders’ warranty management partner — not an impersonal ‘third party’ — helps you take good care of your customers.

Myth 3: There’s not a good return on investment

It’s a cliché that time is money, but it’s true! If you’re a small builder, think about the time you currently spend doing the following:

• Taking customers’ warranty calls (at night? on the weekend? on holidays?)
• Traveling to look at defects and determining if they’re warrantable
• Scheduling subs or your own team members to fix defects
• Educating customers on what is and isn’t covered by warranty
• Fixing things that aren’t covered by warranty simply because you want to keep your customers happy

The more hours you spend on a build, the lower your own hourly rate for that build. And time you spend on previous builds is time you’re not spending making money on new builds! Spending your time on warranty work is costing your business.

If you spend lots of time managing your own warranty work, a warranty partner can help you save that time. If you’re too busy and spend only a little time on these tasks, a warranty management partner can help you provide better customer service.

If you’re a small builder, you might not really distinguish between what’s covered by warranty and what’s not — you just fix anything and everything homeowners ask you to. (And you know that a handful of them are still not happy, no matter what you do!) Having a written warranty in place, supported by an expert who knows that warranty inside out, can save you the cost of this extra work. It’s also fair to your customers because the coverage is stated in black and white, on a document they signed, backed by a neutral party.

If your company is big enough to have a few employees, you might have them take care of many of these things. But if your construction manager is traveling out to previous builds to make warranty determinations, that means they’re not onsite at your new build. You’re paying them — but your business is not moving forward!

To scale your business, you might be thinking of adding admin staff to manage warranty work. But, as you know, adding employees costs far more than their hourly pay. Think about training expenses, 401K or company benefits, travel-related costs, insurance, IT upgrades and expenses… the list goes on.
Having a builders’ warranty management partner means you don’t have to spend that money on in-house warranty staff. Your partner takes care of it all, and there’s only one cost to you, which is paid at closing.

Finally, warranty management can help you make money. It does this in two ways. First, it can be used as a marketing tool to help you attract new customers. Second, keeping your customers happy means more referrals. We’ll talk more about the marketing and customer-care benefits in a later post. For now, be sure to consider all your current warranty work costs when you consider the ROI of working with a warranty partner.

To learn more about how builders’ warranty management works, see How Builders’ Warranty Management Works: What You Need to Know.

If you’d like to talk about the benefits of working with ProHome as your construction warranty management partner, please contact Matt at (316) 706-0368 or matt@prohome.com today.If you know a builder who might find this information helpful, please share it.

Zena Ryder is a freelance writer who writes about the construction industry. You can find her at Zena, Freelance Writer and on LinkedIn.