(Note: Following up on our earlier post McStain Homes Files Bankruptcy, “For purchasers whose homes are still under construction, McStain will be purchasing a 3rd party warranty.“)
As part of its operational reorganization in a lean economy, Colorado home-builder McStain Enterprises Inc. has partnered with ProHome Colorado to decrease costs for warranty service on all their new homes.
“ProHome not only assisted McStain during these lean times, but they will play a vital role in our recovery by saving us money on warranty administration,” David Ware, vice president of community development for McStain neighborhoods said. “McStain has been a self insured warrantor and it became apparent during the market crash facing our industry that we needed to find a way to save and pass those savings along to consumers.”
The bursting housing bubble has been a major factor in pushing the country into the worst recession in 70 years, and builders have responded by sharply cutting back on construction and looking for ways to save money.
“Usually it’s a 30-60 percent savings over having their own warranty department,” Bill Armstrong ProHome Colorado President said. “One of the things our building customers like most is that their phones stop ringing with warranty calls, we handle it for them.”
In its September report, the US Commerce Department showed increasing strength in the construction industry with applications for building permits, considered a gauge of economic strength, up 2.7% in August. Industry experts say that this is partially due to home builders finding ways to cut costs while maintaining high levels of customer service. Construction of multifamily units surged 25.3% and most economists agree the overall recession has likely ended.
According to Armstrong, by saving money on their warranties, builders like McStain can pass savings along to consumers, and this can be an important part of their sales strategy in an economy just reaching recovery stages. This also gives builders more time to focus on business because their phones aren’t ringing with warranty claims and they have reduced liability exposure in dealing with the legalities of home warranties, Armstrong adds.
“Because ProHome Colorado is staffed with professionals who understand warranties, we can take the process, and the headaches that come with it, completely out of the builders’ hands. In the case of McStain, this allows them to focus more on building homes,” Armstrong said. “We’ll be clear with the homeowners about what is and is not covered.”
To contact Bill Armstrong of Pro Home Colorado call 303-679-9090. To contact David Ware from McStain Neighborhoods call 303-591-2937.
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