#32: Matt Hobbs - Are Third Party Warranty Companies Just Sales Gimmicks?

Hey, folks. This week we’re going to be talking about that necessary evil that all builders face – home warranties. And, let’s face it, warranty claims are no fun. If you don’t keep a close tab on them, they can quickly spiral out of control – and – often, builders use their own administrative staff to handle the warranty calls that come in.

Although that may seem practical on your wallet, it can often cost you more than you think.

You really want to think about warranty as something more than just a cost of doing business (and, quite honestly, a pain in your neck). As much as it might hurt to hear, you really should treat the warranty process with your homeowners in a professional manner that is fair – and even delights your customers.

After all, as a home builder, you can live and die by word of mouth.

Now, I have to admit that when I was building, I was one of those who just used my own staff to handle the majority of the warranty claims. A competitor started offering an extended third party warranty company to their customers, and my sales team thought we needed to offer one, too or we’d lose sales to that competitor.

Begrudgingly, I sought out a third party warranty company so we had something to offer as part of the sales process. And, I can say that I wasn’t impressed. I’d pay a few hundred dollars to this third-party company for every customer to offer “peace of mind” to them. I never met anyone at this company. Most of my customers forgot that this was part of their sale – remarking so when signing the paperwork at closing. And, as far as I know, no one ever contacted that company anyway.

So, I was a skeptic. It seemed like I was just throwing money out the window for no good reason.

Recently, I happened to connect with Matt Hobbs, who is the National Director of Business Development for ProHome – a Third Party Warranty Company with locations in the U.S. and the U.K., and I invited him to talk me out of my skepticism.

So, if – like me – you are skeptical about third-party Warranty Companies, listen in as Matt faces my skepticism and tries to convince me that there is merit to hiring a third-party warranty company to manage your warranty service….