Solidify Warranty Expectations With a Knowledgeable Staff
By Tracey Gundersen, CEO, Warranty Management Technologies

Expectations and warranties are only as good as the people who present them.

Warranty documents and procedures can confuse even the most savvy builder, staff person, Realtor® or trade contractor. Warranty law changes, and edits such as right to repair, are sure to cause confusion about response times and documentation.

If the builder is confused, then where does this leave the other stakeholders who interact with the buyer?

Customer service expert and author Carol Smith says that everyone in the customer service chain ought to develop complete warranty knowledge. After all, how can a staff establish reasonable expectations without understanding the company warranty document?

A thorough warranty document presented by a knowledgeable staff establishes proper buyer expectations and a solid customer foundation.

What should a builder’s staff know in order to create this solid foundation? Beyond legalese, what should a warranty document include? And how can a builder present the document as an expectation management tool?

Smith offers 20 points to consider:

1. Describe the type and duration of coverage provided by your limited warranty with regard to materials and workmanship, home systems and structural coverage.
   
   
2. What coverage does your state require? If your state has a Notice and Opportunity to Repair (NOR) law, what do you know about NOR documentation requirements and procedures?
   
   
3. Is the warranty insured by a third party or is it self-insured — backed by the builder? If insured, who is the underwriter? What is their current financial status? What fee does the home owner pay to file a claim? What is the builder’s cost for the coverage?
   
   
4. If self-insured, how do you respond to prospects who want to know why you don’t have insured warranty coverage?
   
   
5. What is the difference between full warranty and limited warranty; implied warranty and express warranty; and materials and workmanship coverage, systems coverage and structural coverage?
   
   
6. Is the limited warranty assignable (transferable) to subsequent owners?
   
   
7. What home owner obligations does the limited warranty impose? What choices does the builder have?
   
   
8. What is the limited warranty position on consumer products?
   
   
9. Give examples of exclusions listed in the limited warranty.
   
   
10. Does the warranty include an alternative dispute resolution clause? If so, is it binding?
    
    
11. Does the limited warranty contain a waiver of implied warranty? If so, is it enforceable in your state?
    
    
12. Does the warranty contain the price of the home, date of closing and names and addresses of all parties?
    
    
13. Do the home buyers sign the limited warranty at closing?
    
    
14. How does your limited warranty compare to the warranties of your competitors?
    
    
15. How and when should home owners report emergency items and non-emergency items?
    
    
16. What is the typical response time for your warranty staff to acknowledge receiving a warranty request, inspecting the items reported and doing the needed work?
    
    
17. Which trades provide the best all around warranty service? Which of your trades are the worst at warranty service?
    
    
18. What do you tell customers about your limited warranty?
    
    
19. Are the oral statements you make regarding warranty coverage binding on the builder?
    
    
20. What is the most frequently heard complaint about warranty service? What is the most frequently heard compliment?

In the end, practice and drill the basics of a warranty document to establish a solid foundation for a winning service program.

Tracey Gundersen is the founder and CEO of Warranty Management Technologies, LLC, of Burnsville, Minn. The firm provides warranty process management software, consulting services and fully outsourced customer service to new home builders. For more information, e-mail Gundersen, call her at 952-707-0725, or visit www.homsoft.com.

NAHB Has Nearly 300 Resources to Help You Run Your Business More Profitably

Go to NAHB's Business Management Tools Web pages (available to members only) for instant access to nearly 300 timesaving, moneymaking and cost-cutting business resources to help you run your business more profitably. Get guidance on accounting and financial management, business strategy, computers and information technology, customer service, human resources and more.

Resources are added weekly, so bookmark www.nahb.org/biztools to go directly to these vital business management resources.

Local and state home builders associations can link directly to www.nahb.org/biztools from their Web site and give their members instant access to these resources. It will make your HBA's Web site the place to go for the information and guidance that members need to succeed.

Learn How to Maintain Positive Customer Relationships With ‘Beyond Warranty’

“Beyond Warranty: Building Your Referral Business” by Carol Smith, available at BuilderBooks.com, provides practical tips and tools for builders and their sales and warranty staffs to understand and plan for the customer service that follows the sale of a house, especially warranty service.

“Beyond Warranty” takes builders step-by-step through the complicated but essential process of creating a home warranty program that can improve housing quality and earn satisfied customers and referral business.

To view or order this publication online, click here, or call 800-223-2665.

NBN Tools Print This Article Subscribe to NBN E-mail Editor Print ALL Articles Manage Your Subscription