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New home warranty
"Art Begun" wrote in message ... I thought I would post, for the benefit of people buying a new home, some information on those 3rd party warranties builders often supply. Usually the builder raves about them but you never get a copy until closing day and they ask you to sign the front page at closing. Don't do it. You are signing away most of your normal consumer rights and the terms of the warranty are so bad it is highly unlikely that you would ever collect a cent under it. For the most part it frees the builder of liability for meeting code which would otherwise be required by law. So if a code violation is found after closing you would not be able to do anything about it. Big name builders and small builders use these things. Refuse to sign. Tell them at closing that you don't sign anything with out reading it and you will take it home and sign it after studying it. After a careful reading you can decide what is right for you. These warranties are a way for builders to unbundle their warranty costs which are of course rolled into the price of the home. This inflates the warranty cost substantially and removes the incentive for the builder to do it right the first time. The buyer winds up paying 20 or 30 years for the warranty which has long since expired. As far as collecting any money under the warranty--not a chance. At best you get a "fixer" of their choice to try and remediate the problem. Unfortunately you don't have much choice when the builder includes the warranty of his choice in the deal. By not signing you get nothing but the right to sue--not a good way to homeowner satisfaction. The time to think about warranties is up front, not at closing. If you want to buy from a big name builder then you are stuck with his deal. Small contractors are more likely to be open to negotiation. But you will probably pay more anyway since the smaller builders don't have the economies of scale. The other day I accidentally trespassed into a new development area (KB) and noticed that on virtually every house the exterior was spray painted with several instructions and corrections for the workers such as: Add insulation here -- Extend wrap around side etc etc. Obviously they are using warm bodies who don't know what they are doing and can't read drawings. No wonder there are so many defects in a new house. Regards, John |
#2
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New home warranty
One thing to keep in mind is the right to sue does not mean you will
have to sue. If you buy from a big builder and sign on to the worthless warranty you lose the right to sue. But if you refuse to sign it at closing until you can take it home and read it (and file it in the circular file) you will keep your right to sue. Which may be all you need to get the guy to fix stuff. "JTM" wrote in message ... "Art Begun" wrote in message ... I thought I would post, for the benefit of people buying a new home, some information on those 3rd party warranties builders often supply. Usually the builder raves about them but you never get a copy until closing day and they ask you to sign the front page at closing. Don't do it. You are signing away most of your normal consumer rights and the terms of the warranty are so bad it is highly unlikely that you would ever collect a cent under it. For the most part it frees the builder of liability for meeting code which would otherwise be required by law. So if a code violation is found after closing you would not be able to do anything about it. Big name builders and small builders use these things. Refuse to sign. Tell them at closing that you don't sign anything with out reading it and you will take it home and sign it after studying it. After a careful reading you can decide what is right for you. These warranties are a way for builders to unbundle their warranty costs which are of course rolled into the price of the home. This inflates the warranty cost substantially and removes the incentive for the builder to do it right the first time. The buyer winds up paying 20 or 30 years for the warranty which has long since expired. As far as collecting any money under the warranty--not a chance. At best you get a "fixer" of their choice to try and remediate the problem. Unfortunately you don't have much choice when the builder includes the warranty of his choice in the deal. By not signing you get nothing but the right to sue--not a good way to homeowner satisfaction. The time to think about warranties is up front, not at closing. If you want to buy from a big name builder then you are stuck with his deal. Small contractors are more likely to be open to negotiation. But you will probably pay more anyway since the smaller builders don't have the economies of scale. The other day I accidentally trespassed into a new development area (KB) and noticed that on virtually every house the exterior was spray painted with several instructions and corrections for the workers such as: Add insulation here -- Extend wrap around side etc etc. Obviously they are using warm bodies who don't know what they are doing and can't read drawings. No wonder there are so many defects in a new house. Regards, John |
#3
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New home warranty
"Art Begun" wrote in message ... One thing to keep in mind is the right to sue does not mean you will have to sue. If you buy from a big builder and sign on to the worthless warranty you lose the right to sue. But if you refuse to sign it at closing until you can take it home and read it (and file it in the circular file) you will keep your right to sue. Which may be all you need to get the guy to fix stuff. If you want to go with a big builder who uses third party warranties then refusing to agree to the remedies in the warranty by not signing it will still leave you paying for an over priced warranty which will not be in effect. These companies have full time lawyers skilled in getting complaints dismissed because the buyer failed to avail himself of remedies that were included in the sale. They know the courts will look unkindly on any action until you have availed yourself of the warranty that you paid for, regardless of whether you signed it. The time to deal with third party warranties is before you get caught up in the excitement of buying a new house. The only real choice you have is to use an independent builder who does his own warranties--with all the risks and higher costs that entails. Regards, John |
#4
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New home warranty
That's nothin'. Some friends of mine were having a house built. THe
contractor kept making "mistakes" such as not framing the walls and windows in the right places per the plans. So, my friend decide to drop by once in a while after work to keep an eye on things. One day he finds the last side of the house being sided - but there's no Tyvek on it. When he confronted the builder about he, he claimed "the guys doing the siding didn't notice. (In case you're wondering, they eventually backed out of the deal around "mistake" #157. It ended up in legal channels. Your friend had the right idea about dropping by periodically, but a better idea is to find a retired contractor or master carpenter and pay him just to be on site daily to avoid these problems in the first place. I have a friend with contracting experience and he said that he would do this if he was having a house built for himself. It would be money well spent just for the peace of mind of knowing that hidden defects weren't concealed. Regards, John |
#5
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New home warranty
"Art Begun" wrote in message ... I thought I would post, for the benefit of people buying a new home, some information on those 3rd party warranties builders often supply. Usually the builder raves about them but you never get a copy until closing day and they ask you to sign the front page at closing. Don't do it. You are signing away most of your normal consumer rights and the terms of the warranty are so bad it is highly unlikely that you would ever collect a cent under it. For the most part it frees the builder of liability for meeting code which would otherwise be required by law. So if a code violation is found after closing you would not be able to do anything about it. Big name builders and small builders use these things. Refuse to sign. Tell them at closing that you don't sign anything with out reading it and you will take it home and sign it after studying it. After a careful reading you can decide what is right for you. This is Turtle. Arty , Them home builders are going to not like you for telling on them about their gimmicks to sell homes with. I know the warrenty is worthless in most cases but they are not going to send you a Christmas card if you tell on them. I wanted to warn you here if you was expecting a christmas card this year. TURTLE |
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New home warranty
"A contract requires a meeting of the minds. The anti consumer language will not go in" to effect? "unless you sign it..." "...or it is otherwise thoroughly integrated into the document." How could its being integrated into the document (warranty) supercede your signature. "Just like all the verbal promises the builder made..... it won't be included." You mean to imply that all the verbal promises sales types have made to me over the years are meaningless? I am shocked. This has nothing to do do with whether you sign the third party warranty or not at closing. If you don't sign it you get nothing for your money but the pleasure of taking a legal course of action which is not likely to be successful. It is too late at closing to try to change the terms of the warranty--which was almost certainly touted at the start of the buying process as one of the selling points. Don't you remember the sale type saying "This home comes with a no hassle warranty which covers the material and labor cost of repair for any defects in construction for some number of years". Regards John |
#7
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New home warranty
It is too late at closing to try to change the terms of the
warranty--which was almost certainly touted at the start of the buying process as one of the selling points. Don't you remember the sale type saying "This home comes with a no hassle warranty which covers the material and labor cost of repair for any defects in construction for some number of years". Exactly.... they said the house comes with a terrific warranty but they don't show it to you and in fact you cannot get a copy until closing. So the terms are, if you don't sign, that you get a terrific warranty assuming the verbal promise comes in.... which it may or may not. If you sign the non-terrific warranty at the end you are stuck with it. If you refuse to sign then you avoid the anti-consumer terms included in the written warranty and you get what is provided under law: Possibly the verbal promise of a great warranty (which would not include anti consumer language) but at the minimum, in general the legal standard would be that the house has to be built to code and generally accepted standards of workmanship. That is far better than what it says in the 3rd party warranties. Bottom line don't sign unless you want to forgo your right to sue the builder and are satisfied with the pathetic promises in the written 3rd party warranties. Your house basically has to fall down to collect. "JTM" wrote in message .. . "A contract requires a meeting of the minds. The anti consumer language will not go in" to effect? "unless you sign it..." "...or it is otherwise thoroughly integrated into the document." How could its being integrated into the document (warranty) supercede your signature. "Just like all the verbal promises the builder made..... it won't be included." You mean to imply that all the verbal promises sales types have made to me over the years are meaningless? I am shocked. This has nothing to do do with whether you sign the third party warranty or not at closing. If you don't sign it you get nothing for your money but the pleasure of taking a legal course of action which is not likely to be successful. It is too late at closing to try to change the terms of the warranty--which was almost certainly touted at the start of the buying process as one of the selling points. Don't you remember the sale type saying "This home comes with a no hassle warranty which covers the material and labor cost of repair for any defects in construction for some number of years". Regards John |
#8
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New home warranty
Exactly.... they said the house comes with a terrific warranty but they don't show it to you and in fact you cannot get a copy until closing. That should have been a clear warning to the buyer--no copy no deal. Time to take a walk. So the terms are, if you don't sign, that you get a terrific warranty assuming the verbal promise comes in.... which it may or may not. Verbal promises from a sales type aren't worth a bucket of warm spit. If you sign the non-terrific warranty at the end you are stuck with it. This usually means that they get to choose how, when and by whom it gets attended to. And for this you agree not to litigate and to choose arbitration instead. If you refuse to sign then you avoid the anti-consumer terms included in the written warranty and you get what is provided under law: These so called "anti-consumer terms" are carefully crafted legal terms designed to avoid costly legal action by the new home owner when the new wears off of the house and reality sets in. Possibly the verbal promise of a great warranty (which would not include anti consumer language) but at the minimum, in general the legal standard would be that the house has to be built to code and generally accepted standards of workmanship. That is far better than what it says in the 3rd party warranties. But to have any hope of enforcing this alleged verbal promise will require some evidence and that is sadly lacking. If by some good fortune it gets into court, the sales person will probably have moved on and no one will know what you're talking about. Case dismissed. Bottom line don't sign unless you want to forgo your right to sue the builder and are satisfied with the pathetic promises in the written 3rd party warranties. Your house basically has to fall down to collect. Lawyers will love you for this. Just try to get one on a contingency basis for a case like this. It sounds like you got a rude awakening. Hint: Any extra cost extended warranty is a bad deal. The provider knows statistically exactly what the costs will be and inflates the costs so that it becomes a profit center. It's the great free interprise system at work. I think the whole economy would collapse if everyone was immune to sales hype and only made rational purchases. Regards, John |
#9
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New home warranty
What kills me is that in many states the buyer pays for the attorney
and he will not open his mouth and say anything because he wants to get the closing over with. In other states the builder may supply the attorney. If you let them you are letting yourself be screwed. Some other states don't involve attorney's any more. In those cases you pay less for the closing and you get what you pay for. If you are paying for the closing attorney, if he is any good he will tell you not to sign it until you have read it. (And he might tell you not to bother doing either because it is crap.) Here is a true story of a 3rd party warranty. Warranty says homeowner must maintain house to collect. Sounds reasonable. Builder builds house very close to creak and promises to put in a structural retaining wall. Never does. Builder promises to do it and says don't worry there is a great warranty any way. Homeowner stupidly agrees to close. Builder never builds wall and creak is getting closer to foundation. Homeowner calls warranty company. They come and say that there is no damage yet so there is nothing to fix. So won't pay to put in wall. Plus they say that the homeowner is obligated to maintain the house. Therefore if he doesn't put in a retaining wall and foundation collapses he STILL will not be able to collect. That is a true story. Read your warranty before signing it. "TURTLE" wrote in message ... "Art Begun" wrote in message ... I thought I would post, for the benefit of people buying a new home, some information on those 3rd party warranties builders often supply. Usually the builder raves about them but you never get a copy until closing day and they ask you to sign the front page at closing. Don't do it. You are signing away most of your normal consumer rights and the terms of the warranty are so bad it is highly unlikely that you would ever collect a cent under it. For the most part it frees the builder of liability for meeting code which would otherwise be required by law. So if a code violation is found after closing you would not be able to do anything about it. Big name builders and small builders use these things. Refuse to sign. Tell them at closing that you don't sign anything with out reading it and you will take it home and sign it after studying it. After a careful reading you can decide what is right for you. This is Turtle. Arty , Them home builders are going to not like you for telling on them about their gimmicks to sell homes with. I know the warrenty is worthless in most cases but they are not going to send you a Christmas card if you tell on them. I wanted to warn you here if you was expecting a christmas card this year. TURTLE |
#10
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New home warranty
It actually varies by state. In NY, everyone including the bank, gets
their own attorney. "'nuther Bob" wrote in message ... On Fri, 18 Jul 2003 17:39:36 -0400, "Art Begun" wrote: What kills me is that in many states the buyer pays for the attorney and he will not open his mouth and say anything because he wants to get the closing over with. In other states the builder may supply the attorney. If you let them you are letting yourself be screwed. Some other states don't involve attorney's any more. In those cases you pay less for the closing and you get what you pay for. Here's the deal: the bank will use an attorney for the closing. The bank does not pay for the lawyer, you do as part of the closing costs. The bank's attorney is there only to make sure that the bank is legally protected, not you. If the seller has an attorney there, his job is to look out for the seller, not you or the bank. If you want an attorney looking out for you, hire one and have him present. One trick you can sometimes do is to ask the bank to let _your_ attorney do the work for them (Both attorneys will essentially do the same tasks anyway). Banks will often agree to this, since they don't really care who the attorney is as long as he is qualified. The attorney will bill the bank, the bank will bill you, the usual thing. The big difference is that *you* hired *your own* attorney and he looks out for you - the billing just goes through the bank. Bob |
#11
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New home warranty
On Fri, 18 Jul 2003 17:39:36 -0400, "Art Begun"
wrote: What kills me is that in many states the buyer pays for the attorney and he will not open his mouth and say anything because he wants to get the closing over with. In other states the builder may supply the attorney. If you let them you are letting yourself be screwed. Some other states don't involve attorney's any more. In those cases you pay less for the closing and you get what you pay for. An attorney represents the person who is paying his or her fee, period. If I was involved in any deal where my interests were not being represented, I'd bring my own attorney. Builders and selling real estate agents love to downplay the need for a buyer to hire an attorney, just like they downplay the need for a 3rd party inspector / engineer. A home is usually one of the largest transactions of a person's life. I can't understand why everyone dosen't spend the $300-500 to have their, and only their, interests protected. FWIW, I am not an attorney, and I have nothing to do with any attorney. Barry |
#12
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New home warranty
This is Turtle. If a Builder has a warrrenty written up as a extra cost to warrent his work you can refuse it anytime you like and have them subtract it from the cost of the sale. You have to state cost of the warrenty or your commiting fraud by hiding it from the comsumer. Now in the State Of Louisiana there is a consumer law that says and I quote here. If a Realstate company or Builder in the State of Louisiana sells a home. he / she / it is responisible for any deffects know or unknown for 2 years. No if ,and's , or but's. There is really no warrenty sold here on the new home for builders and realistate brokers all pay insurance if they fail to fix or repair anything under this provission. Now the State will pull their licences to operate in the state along with having to pay the repairs. There has been a case like this where the Builder got the buyer to sign a waver to warrenty and did not explain it to him. The buyer had trouble and called the builder and he pulled out the waver agreement and when the smoke cleared . The builder licences was pulled for doing business in Louisiana for 90 days , paid another contractor to fix the problem, and paid all legal fees. If a builder / realstate dealer want to sell a warrenty to fix it. he is more than welcome to do so and con the buyer out of the cost but if the warrenty do pay all the expence in full. the burden of cost falls back on the Builder / realstate dealer . Here a realstate dealer will pay for the warrenty to put it between the buyer and them to take up most of the cost. Now if cost does rize about warrent. Look out here it comes. Louisiana figured out the fast talking lawyer years ago and put a stop to the whip lash dealing here. Other staste may let you get away with this but Louisiana don't allow it at all. You would be correct if the warranty is an option. And in general all extra cost warranties are a bad idea, better to bank the money and use it if needed. The builder is obligated to meet codes and to produce a merchantable product in any case. But the case in point involves a warranty which was touted up front and was included (hidden) in the sell price. These third party warranties are just a means to avoid having the keep fixers on hand and to let someone else deal with the after market support. The give nervous home buyers a false sense of security. The last home I sold, the buyer wanted a specific homeowners warranty on my nickel. I suspect her agent had put her up to it no doubt for an extra commission. I told the agent it they wanted a warranty then go buy it themselves. The deal went through without a warranty. Regards, John |
#14
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New home warranty
The latest house I bought (the one I'm living in), I demanded a warranty as part of the selling terms. The seller agreed...and it cost him $120. He obviously felt it was a reasonable cost to close the deal. In my area, few homes are sold without a warranty. I don't know if this is a national trend or not. As an aside... I can't image ANYONE going to a closing without an attorney...especially if its a new house. If yer spending $250,000+ on a purchase, how much will an extra $100 or so...for insurance...set you back? If it gives you a warm fuzzy feeling then great, but how much protection do you think you are getting for $50 (there is at least a 50% margin for commissions and profit)? You couldn't be getting much protection--as I recall the warranty I refused to provide was ~$500. And even at that price they are worthless. These warranties are filled with weasel words and exclusions and they get to choose what kind of fix is implemented. They are just an extra profit generator that takes advantage of new home buyers and the loss of clear thinking that seems to affect people when making major purchases. A case in point--my supervisor had a dream house custom built and the contractor left the insulation out from below the windows in several places which caused the windows to fog up in the winter time. He complained numerous times about the problem and all he got was some guy with a caulk gun trying to fix that which couldn't be fixed (at least not with caulking. When he finally found out what the real problem was, the warranty company refused to fix it and he eventually sold the home as is. My uncle bought a fifthwheel trailer and a dual wheeled pickup with dealer installed fifth wheel and towing package. The dealer also sold him an extended warranty on the engine and drive train. It was supposed to be good anywhere in the US. When the transmission died in Phoenix he spent a month fighting to get the local deal to honor the warranty. I think he finally got some satifaction because he was retired and could wait out the excuses. No deal is too good to walk away from and if you don't have that attitude then you will be repeatedly taken advantage of in deals through out your life. One estimate is that the average consumer will lose $20,000 over a life time to fraud and abuse in the market place and this study was 20 years ago, today would probably be twice that. Regards, John |
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