When you are building a new home, one important thing to consider before selecting a builder is their home warranty. For many families, a new home is the biggest investment they will make, so it follows that knowing how your investment is protected should be a consideration up front.

Before you sign with a contractor to build your new home, consider the following pieces of information about their home warranty:

Who Guarantees It?
Many home warranties, especially when you are going with an independent, locally-based builder, are backed by the builder themselves. However, it is also possible that a builder will works with an independent home warranty company for their coverage. Be sure to ask how claims are handled and who is responsible for the warranty work.

What Does It Cover?
Not every issue will be covered by a home warranty. For example, the appliances, small cracks in cement or drywall, or things otherwise covered under a manufacturer’s warranty are not usually covered. Be sure you know what is excluded, and what the length of coverage is for categories of repairs that are covered.

What Do I Do In Case of a Dispute?
In the circumstance that there is a dispute with the builder (a highly unlikely case, but not unheard of), be upfront in asking what your recourse is. Many builders have a predefined process written into their warranties regarding how to dispute a refusal of service, sometimes it will go through mediation and arbitration before going through court, but make sure you know what your rights as a claimant are.

There are a lot of things to consider when choosing a home builder, and sometimes making sure you are asking the right questions can be a challenge. However, protecting your investment with a full understanding of your new home’s warranty should be an important consideration for anyone considering building a home.

There are many benefits to building a new home, but perhaps the most important to homeowners is the money they save during the life of their home. The saying goes that a penny saved is a penny earned, and when it comes to the cost of living it couldn’t be more true.

The National Association of Home Builders recently reported that the majority of new homeowners (about 73% according to the 2009 American Housing Survey) spend less than $25 a month to maintain their home. And a new construction homeowner spend around 13 cents less per square foot for energy usage than the average homeowner-and that lower average cost even includes new homes that aren’t built using leading energy efficient practices. Imagine how much more savings a durable and energy efficient home would be in comparison!

Many of the clients we have built custom homes for in the past have told us how surprised they were to find they were spending less money to live in their new, energy efficient home even with a larger home. We have also had clients come to us who have decided to build a new home because the costs and time associated with maintenance and upgrades to existing homes in their price range really put them off the idea of buying.

While some home buyers are intimidated by the prospect of building, often these worries come from the unknown when it comes to costs. But, as these numbers really show, working with a qualified home builder to purchase a lot and build within your budget can be an rewarding investment that will actually save you money in the long run.

Here is an exterior shot of a Hibbs Homes custom built home showing the Tyvek weatherproofing used to help seal the home.

As a custom home builder, I’m often asked “Why should I build a new home instead of buying an existing home?”

This question is asked as foreclosed homes continue to flood the market, and many are at very low prices. I recently ran across a U.S. News article that answers the question perfectly. So instead of “reinventing the wheel,” here is an edited version of the article, with a few of my own comments, especially in regards to item number four – Healthier indoor environment.

1. Customization: Many home builders allow buyers to participate in the process of designing their home which helps create a living space specifically tailored to the the homeowner’s tastes. For example, new home buyers can often decide where their bathroom might go, choose their favorite type of flooring, or pick the color of the exterior paint. If you build a true custom home, you help design the entire home and make all final selections.

2. Building envelope/energy efficiency: Building codes continue to mandate higher energy efficiency standards. This means homes are built better with a tighter building envelop. New homes are roughly 17% more efficient than homes built only three years ago, and 30% more efficient that homes built a decade ago. This means your monthly utility bills should be lower, much lower in some cases, over existing homes.

3. Green/energy efficient appliances: A new home will often include new energy efficient (Energy Star rated) appliances, water heaters and furnaces/air-conditioners which will also help you save money each month over those in an existing home.

4. Healthier indoor environment: There are several ways a new home promotes comfort through better indoor air quality. A tighter building envelope means fewer pollutants enter the home. And selecting cabinets, flooring, carpeting, paint, etc. that contain low or no VOC’s leads to improved air quality. Strategically placed and sized exhaust fans removed unwanted/unhealthy air from the house, and properly sized heating and cooling systems with upgraded filters and humidifiers also leads to more comfort and cleaner indoor air.

5. Fewer repairs: The features of newly constructed homes should also hold up better than those of existing homes, which may have experienced years of wear and tear. When you buy a new home, EVERTHING is new!

6. Less maintenance: Today’s new homes are engineered specifically to minimize maintenance requirements. For example, most builders use composite materials on the exterior of the home (instead of wood) which eliminates rotting and the need for repainting. Less maintenance means more free time!

7. Warranty: Most builders offer a one year warranty meaning they will take care of most repairs. Many other components in a new home will also carry an extended warranty. Whereas when you buy an existing home even a pre-sale inspection doesn’t turn up all defects, and within a few years aging components may begin to deteriorate rapidly.

8. Fire safety: Newly constructed homes often include fire safety features that may not be present in properties built years ago.

9. Concessions: Especially in today’s sluggish housing market, buyers may be able to squeeze more concessions out of a home building company than an individual seller. That’s because individual sellers often have an emotional attachment to their property that can blind them to its true value.

10. Financing: New home buyers may be able to take advantage of mortgage financing perks, such as Energy Efficient mortgages if your home qualifies.