Warranties on New Homes Listed for Sale

If you are purchasing a newly constructed home that has been listed for sale by the builder, you should consider requiring the seller to add written warranties to the standard form agreement.  Most houses listed for sale are used homes but a portion of them are houses that have just been built by the seller.  If you were purchasing a typical used home, your agreement would normally indicate that you are purchasing the property as is.   It’s the way almost all standard agreements are written.  It’s analagous to purchasing a new vehicle.  The seller cannot control what problems might be with the home and they don’t want any ties or potential liabilities with the house once it is sold.  Of course they must still fulfill their legal duty to disclose known defects that cannot be reasonably discovered by the purchaser on an inspection of the property.   (See my article on disclosure of defects under the realestate page of my website.)   However, if the house listed for sale is new and the seller is the builder, the situation can be different.

If you are purchasing a newly constructed home from a builder, the builder should be prepared to offer additional warranties to the purchaser.  If the builder does a lot of sales, they may already have a warranty plan if you ask for it.  Otherwise you’ll need to discuss it with them and reduce it to writing.  Have it incorporated as a schedule to your offer to purchase/sale agreement.  Specify what is warranted and what is not.  Ask for a warranty with a long enough life to give the house time to settle and for you to find out if there are construction deficiencies.  Consider asking the builder for a warranty under the National New Home Warranty Plan as well.