Talking structural warranty benefits with Marc Jacocks of 2-10 Home Buyers Warranty

Tom Houghton:

You’re listening to “The Building Code,” your guide for a better way to run your business. I’m Tom Houghton.

Paul Wurth:

Hey Tom, Paul Wurth. Happy to be here.

Tom Houghton:

Hey, Paul. Great to be here with you in person.

Paul Wurth:

Energetic.

Tom Houghton:

Oh, I love it.

Paul Wurth:

This is how we should start every one.

Tom Houghton:

Wait, I think we try.

Paul Wurth:

Okay. Some days are better than others.

Tom Houghton:

Some days are better than … we’ve got a good day.

Paul Wurth:

Yeah.

Tom Houghton:

So, on the up and up.

Paul Wurth:

We’re just like everybody else. Some good days. Some bad days. Just cause we’re up here on our pedestal hosting this …

Tom Houghton:

Our podcast pedestal.

Paul Wurth:

… wildly successful podcast.

Tom Houghton:

Yeah, it’s amazing.

Paul Wurth:

You know, we’re just like you listeners.

Tom Houghton:

Just like you listeners. Hey, thanks listeners for tuning in. We appreciate it. You know, don’t forget to rate and subscribe to our podcast. Don’t forget to join The Building Code Crew Facebook fan page.

Paul Wurth:

Oh.

Tom Houghton:

Yep. And don’t forget if you want a new place to engage with the podcast, you can find it on YouTube.

Paul Wurth:

Hold on a second. So, how do they find the one on Facebook? Just search Building Code? In Groups?

Tom Houghton:

Yeah. If you just search The Building Code Crew …

Paul Wurth:

Producer Danielle’s nodding.

Tom Houghton:

Yep. Yep.

Paul Wurth:

You manage that one don’t you, Danielle? Okay.

Tom Houghton:

Thumbs up from Danielle. Yep.

Paul Wurth:

And then we’re now on YouTube.

Tom Houghton:

We’re now on YouTube.

Paul Wurth:

Can they see our beautiful faces?

Tom Houghton:

No. Yeah. It’s probably better for them though. Probably a better experience. They can listen to it while they work, just pull up YouTube in the background, listen to podcasts, learn something.

Paul Wurth:

You know what they say? Got a face for podcasts.

Tom Houghton:

Exactly. That is the new 2020 saying. Speaking of learning, let’s talk about learning about our guest. So, we’ve got Marc Jacocks joining us today. Director of Marketing at 2-10 Home Buyers Warranty. Super excited to talk about his role there, about what this is and how it integrates with Buildertrend. So, let’s bring Marc on. He’s joining us via Zoom, Marc. How’s it going?

Marc Jacocks:

Going very well. Thanks for having me. How are you guys doing today?

Paul Wurth:

Doing good.

Tom Houghton:

I think we’re pretty great.

Paul Wurth:

We’re having a good day.

Tom Houghton:

Off of that intro.

Paul Wurth:

Yeah.

Tom Houghton:

Yeah.

Paul Wurth:

Where are you out of Marc? Where are you coming from?

Marc Jacocks:

So, I’m based out of Denver, Colo. 2-10 HBW is headquartered here in Denver, and we’ve got about 500 folks out here enjoying the Rocky Mountain sunshine.

Paul Wurth:

Wow. That was surprising. 500.

Tom Houghton:

Yeah. I know another company. That’s got 500 people on it.

Paul Wurth:

Yeah. 500-ish.

Tom Houghton:

500. Yeah, it’s around-ish figure. Yeah. Good old Buildertrend.

Paul Wurth:

Yeah.

Tom Houghton:

Yeah.

Paul Wurth:

Alright. We’re starting on the right foot.

Tom Houghton:

That’s good. So, Marc, tell us a little bit about 2-10 Home Buyers Warranty. I think let’s start … I mean, we typically start with all of our guests asking about the name of the company and we’ve been sitting here scratching our heads going, there’s got to be something with this name. So, tell us the background on the 2-10 name.

Marc Jacocks:

Sure. So, 2-10 Home Buyers Warranty was an industry leading provider of structural warranties and that’s where our name actually comes from. So, when you think about a structural warranty, it involves the workmanship, the distribution systems and the structural coverage. And that’s usually one year of workmanship, two years of distribution systems insert the two and 10 years of structural. So, the 2-10 in the name actually comes from the flagship coverage that we provide for home builders. So, I don’t know if I mentioned this or not, but we’ve been in business for about 40 years. I’m excited to work with builders across the country. One in seven new construction homes comes with a structural warranty from 2-10. Love working with our builders to protect their profits, help them promote their quality and plan for the future.

Tom Houghton:

Those are some impressive stats right there.

Paul Wurth:

I have a question. Although I know the answer to this, but for people who don’t, what would be a distribution system? What would be an example of that?

Tom Houghton:

Asking for a friend.

Paul Wurth:

Yeah, no I got it.

Marc Jacocks:

Asking for a friend, sure. So, distribution systems going to be, you can think of it as anything behind the walls that are in new construction homes. So, the venting, the wiring, electrical, plumbing, anything that goes behind the drywall, that’s the distribution system.

Paul Wurth:

And you’re saying those one, two and 10-year warranties, that is just an industry standard, no matter who you build with or where you build your getting those warranties. Or can you kind of unpack that one?

Marc Jacocks:

Sure. It’s the industry standard for traditional structural warranty, so that’s what we do. We offer third party insurance back structural warranties to home builders. You know, it comes from the mandates that most states have statute of repose that says as a builder, I am required by law to provide a level of quality in the homes that are built. And I’m responsible for the workmanship distribution systems and structural components for a set number of years. And in most states, there is some variance, but most states have a 10-year statute of repose for the structural components.

Paul Wurth:

Got it.

Tom Houghton:

Very good. So, obviously, this affects a lot of home builders. So, just in case there are some homebuilders out there who aren’t using 2-10 or want to know more about warranties. Let’s talk about what warranties do, what do they cover and why builders need it.

Marc Jacocks:

Sure. So, again, traditionally most builders are familiar with the structural warranty of 2-10 Warranty for the risk mitigation aspects that it provides. It does provide that liability transfer for that builder for the statute of repose. So that they’re not on the hook for the structural failure, which can range from $47,000 and up. So, they’re pretty pricey. And so that’s really the cornerstone of traditionally what people think about when they think about a structural warranty, but you know, it’s really one part of the story. And the approach that we take is pretty holistic. And the products and services that we provide are designed to deliver more than, than just this protection against that catastrophic loss.

Paul Wurth:

So, when it comes to 2-10, and obviously you guys market to builders, very similar to what we do at Buildertrend. And you talk about the highest level of your value statement or why you should use 2-10, what does that look like? Let’s just start there.

Marc Jacocks:

Yeah. So, you think about a builder, and you think about the things that builders care about and what keeps the builder up at night. They’re generally not lying around in bed going, oh man, structural defects.

What they’re thinking about is, how do I sell more homes for the best margin possible, right? How do I close on a house and be done with it? What can I do to protect my reputation and make sure that I can stay competitive in the market?

Those are the things that builders worry about. And those are the types of things that we try to help them with. We try to work with the builders to make sure that we can protect their profits so that they’re making as much as they possibly can on every home. We want to help them promote their quality. We want to make sure that we’re helping protect their reputation, so that they can differentiate their offerings in the market. And we want to help them plan for the future, whether their exit strategy is get out now, get out in five years, pass it down to my son, whatever it may be. We want them to have a plan for the future.

Tom Houghton:

That’s great. Planning for the future is very important. So, let’s talk about how the warranty helps with that process and working with 2-10 can do that. So, obviously, we also have an integration now with 2-10, so let’s turn the corner and talk a little bit about that and how we can benefit our listeners there.

Marc Jacocks:

You know, it’s funny, I was actually listening to one of your episodes and you had David Arnold on, who’s the chief strategy officer of Buildertrend. One of the things that I thought was interesting that he said is he was talking about the evolution of Buildertrend and how it’s evolving from just the project management platform into something that’s more encompassing and solving the needs to build a space on an everyday basis. And I like that from a couple of standpoints. One, it provides the opportunity for us to work together and two, it provides a very similar, very aligned philosophy to what our approach is.

Paul Wurth:

It’d be good just to explain how the partnership came to be. And what does that look like for our clients?

Marc Jacocks:

You know, this is a conversation that we’ve been having with Buildertrend for a while. I think it actually started at the International Builders Show a couple of years ago. Started talking to David while he was there. And there’s a lot of synergy around what you guys are doing from a project management in providing this holistic platform for your builders and what we do to make sure that there’s this really critical aspect that can be covered off with the products and services that 2-10 HBW provides.

Tom Houghton:

Nice. So, let’s talk about how this partnership and how 2-10 helps solve some of the problems that our listeners might be facing. So, one of those, obviously, is bottom line dollars, we’re all concerned about that. How do you continue to make sure money’s coming in the door. So, how does having a home warranty protecting your profit?

Marc Jacocks:

Sure. That’s a great question. So, like I touched a little bit on the intro there about the catastrophic and the $47,000 average price for a structural defect claim, but there’s a lot of opportunity for our programs and services to help our builders protect profit through time, saving money, setting, better expectations and creating a better customer experience.

So, customer experience is a big one. Every builder that you talk to, every builder website you go to, there’s some mention of, and/or devotion to, customer experience, which makes a lot of sense because it’s a critical component for any business to find success. So you think about customer experience and there’s really two factors that come into play and it’s what is your experience as compared to what your expectations are? And then how well were you treated? How did the product or service you received actually perform?

So, you think about that first one, that expectation versus reality. I think it’s probably fair to say that builders may not always do the best job of setting an expectation during the sales process of what the experience of home ownership is going to be like. If you walk into a model home or you’re looking at a builder, prospective buyers walking through a house, I don’t think that the builder or the sales professional are looking around saying, up there is the spot where you’re going to see the nail pops. And over here is where the drywall is going to crash in about six months. And this is where the tile is going to break.

They’re not talking about that. And you know, hard to say that you can blame them for it because that’s not what they’re there for. They’re there to sell the dream of, what my life will be like if I live in this home. But the reality is for a lot of folks, when they’re buying a new construction house, this is the first time they’ve done that. And they don’t understand that a house is going to settle and that’s completely normal and that nail pops are going to happen. They don’t have that expectation. So, six months into living in the new house and they see a drywall crack, it doesn’t provide the best experience for them. So, having a clearly written warranty with performance guidelines that not only set better expectations on the front end, but makes it easier to have those fit and finished conversations with the customer at the time, is a tremendous benefit for builders and that customer experience.

You know that second piece is the customer experience on what they get from, truly, from a customer service perspective. And this can be a challenging one. Builders often find themselves in a tough spot because they want to be good to the customers. They want to make sure that they’re protecting their reputation. And so, they’re going to go above and beyond on nights and weekends, and they’re going to answer the phone and they’re going to take the texts and emails, but every single one of those communications and every single time, they have to go back out to the house, that’s money out of their pocket. And that’s time spent away from building their next home. We definitely talk about the protection against the catastrophic, but does not take a catastrophe to lose money on one of these homes.

So, builders partner with 2-10, so they can leverage our team to take those phone calls, so that they can still provide a great level of service to their customers without actually having to be the one who picks up the phone and devote their time to it.

We’re going to take over 250,000 calls on behalf of our builders this year.

Paul Wurth:

Wow. So, that’s got to be the big selling point, at least as I’ve talked to home builders over the last 14 years, is that … I think you nailed it. So, you build this home for Bill and Julie, you became in a relationship with them. You’ve become friends. You’re hoping for a referral. You’re hoping for a great exit to it, maybe a long standing relationship. Even if you do a good job of setting expectations about, hey, things are going to settle. Things are going to go wrong, but here’s our process. You still will find yourself in a position of having to tell them that, nope, that’s not covered by warranty. Because they’re going to ask anyway, right? It’s like when you get a warranty on your car, for some reason, everything that goes wrong with it, isn’t covered. And I’m not saying that’s true with a home but instead of the builder, who’s created that relationship with the couple who owns a home, you’re the middle person then. A third party that doesn’t have any bias and you’re just going to tell them straight. Right?

Marc Jacocks:

That’s absolutely right. And so, there is tremendous value there from having maybe a difficult conversation because you love that couple. When you want to do everything for them, you still have that right as a builder but you also have us to fall back on to have that difficult conversation. And while we hope that every single one of our homeowners is delightful and reasonable. If you can show me a builder that has never had a difficult homeowner, then I can show you a builder that hasn’t been doing this all that long, because unfortunately, it’s the reality sometimes. So, having a service there that can, that has these great guidelines that clearly articulate what is, and isn’t covered, and then a team there to back up what that coverage is, professionally, is extremely invaluable to a builder.

Paul Wurth:

Yeah, I get that. Tom and I talk on these airwaves.

Tom Houghton:

The pod waves.

Paul Wurth:

The pod waves. All the time, about how much we love the construction industry, how it’s got a bad rap, I would say just in general and how we really love people who are trying to elevate that reputation. And so, we talk about that in the sales process all the time, things you could do to do that, but I guess,too, would be one of those things you could do in the sales process to say, look, I’m a real homebuilder. I’ve been doing this a long time. I have this reputable company 2-10, it’s going to take care of all of your post construction needs. Is that a value prop for you guys as well to say, look, you should be showing this in the sales process and becoming a reputable, in their eyes, builder?

Marc Jacocks:

Yeah, I think you hit it right on the head there, Paul. You think about a reputation for a homebuilder. It’s that the cornerstone of the success of their business is based on how well they do and the qualities they build, et cetera. Reputation is everything, so how do you validate who you are as a builder and the types of homes that you build? You know, it makes a difference. And there’s a big difference between you as a builder saying, look at me, look how great my house is I build really good homes and a third party coming in saying, you know what? There’s a commitment to quality here. And there is some third-party standard that’s being levied against the home that’s being built.

So, think about it from this standpoint, for me, I don’t know about you guys, but for me and my wife, we can’t go eat at a new restaurant without looking at Yelp to see what other people thought about the experience that they had. The statistics on entrepreneurs say it’s about 78% of folks look for some form of third-party validation for making even a nominal purchase decision, let alone one of the largest decisions in their life. So, having that third-party validation from an industry leader does provide phenomenal peace of mind for prospective buyers because they know that they’re buying from someone that’s going to be around a while that cares about quality and cares enough to make an investment, to ensure that they’re going to have a good home ownership experience.

Tom Houghton:

Yeah. I think what I love about this is, we preach Buildertrend as this way to level up your business. And what I love is 2-10 is also doing that as, hey, there’s a better way to do it. And 2-10’s also doing that to make sure that you’re providing that customer experience all the way through, not only the build, we’re handling that, but then after the build. And that’s where I think this partnership is so great. It not only benefits the builder, but also their customer. And then that cycle can repeat itself over and over and over again, to drive that builder’s business through the roof, to the next level. Love it.

Marc Jacocks:

That’s right.

Tom Houghton:

So, let’s talk about planning for the future and how warranties can help with that. How can 2-10 help with planning for the future?

Paul Wurth:

Yeah, I guess I have a question, ‘cause I know that was one of your … when we just said, hey, what’s the benefit of 2-10? That was your third one. And I guess for me, I didn’t draw a direct line, which is probably really good. Nobody’s maybe thought of this one. So, unpack that one a little bit.

Marc Jacocks:

We touched on the big component, which would be the ten-year tale that you may have, depending on what your statute of repose is in your state. That’s 10 years of liability. If you stop building today, that means the house that you finished today, for the next 10 years, you’re on the hook for the value of that home, for anything that may happen to it. You ask most builders, where are you going to be in 10 years? They may not be able to tell you. I can tell you where your liability is going to be if you don’t do something about it, right?

So, from that standpoint, from the true risk mitigation standpoint, that’s a huge component of planning for your future. But you know, there’s more. You think about all the things that you can do today to protect yourself going forward.

So, think about the things that you can do to build your business. Maybe you’re in a growth mode, and you know that in 10 years, you want to be 10 times the size, and you’re going to step up. You’re going to need additional support resources and things like that. 2-10 is built to be able to grow with you, whether it’s the in-house engineering expertise we have through every facet of the building process, or, like I said, the training of your staff and or sales teams or warranty teams or our dispute resolution team, I’d say that’s probably one of the biggest things that we have as your customer base grows and as you think about where you want to go with your company. Just having the manpower and the resources to help you succeed there.

Paul Wurth:

Yeah. What was the number again? The number of calls?

Tom Houghton:

250,000, right?

Marc Jacocks:

250,000 this year.

Paul Wurth:

And those calls aren’t short. I mean, if you’re the actual builder taking that phone call …

Tom Houghton:

Yeah, that’s your life, you just gave away.

Paul Wurth:

That’s a lot of time.

Tom Houghton:

That’s a lot. Yeah.

Paul Wurth:

That makes a ton of sense. I mean, I think you guys have a really strong set of benefits there. I mean, it’s very, very clear to a builder. I will ask the hard-hitting question. You guys are for-profit, correct? You guys charge for …

Marc Jacocks:

We are a for-profit company as it turns out. Uh-huh.

Paul Wurth:

I won’t ask how much it is. I don’t even know, but when you’re talking to a builder about, hey, it’s going to cost you X, but you’re going to get Y out of it. Is it basically as simple as like, if you have to handle one of these warranty claims yourself, you’re going to be out X amount of dollars out of your pocket. And our cost is just one of those things. Is it as simple as that for you guys?

Marc Jacocks:

It’s a little bit more complex than that. It’s an insurance product. And so, there’s an underwriting component. The factors that go into it. I think a good general rule of thumb is it’s, on average, probably around 500 bucks for a full 10 years of coverage.

Paul Wurth:

Wow.

Marc Jacocks:

That would be a nationwide median price, which is, that’s …

Tom Houghton:

Which is pretty great.

Paul Wurth:

That’s like one warranty issue that you got to handle yourself that you’re out of pocket, blah, blah, blah. Like that, that seems like …

Marc Jacocks:

And you’re right. And that’s just a callback. That’s not a, oh my god, the foundations are crumbling in this subdivision because the soil is moving sort of situation.

Tom Houghton:

Yeah.

Paul Wurth:

No brainer.

Tom Houghton:

Yeah, absolutely. So, what would be a great next step for people who are interested in learning more about this partnership? I guess they would need to go, I’ll take, I’m asking this question to me really.

If you’re a Buildertrend user, and you’re interested in our partnership with 2-10, you should definitely head up to the cog wheel in Buildertrend on the full site. Buildertrend.net. When you log in, click on the cog wheel and click on the Buildertrend Marketplace. There, you’ll see all of our integrations, all of our partnerships there that we have across. A wide gamut there. So, if you want to learn more about the partnership, that’s one way. Of course, you can always check the show notes. We haven’t done that yet.

Paul Wurth:

The shownotes.

Tom Houghton:

Shownotes. So, buildertrend.com/podcast is a great way to find out some more information. We’ll put some links in the show notes there for you as well to build 2-10, Buildertrend and the Buildertrend Marketplace.

Paul Wurth:

Yeah, that’s great. Buildertrend Marketplace. Some people don’t know that because it’s behind the cog wheel. I think we may need to workshop that a little bit. We’ll talk to the product team.

Tom Houghton:

The gear?

Paul Wurth:

The gear, the cog wheel.

Tom Houghton:

What do you want call it?

Paul Wurth:

Either way …

Tom Houghton:

Cogsworth.

Paul Wurth:

The Marketplace is a great place to find a number of different things, but the aforementioned David Arnold and his team have done a great job of creating partnerships that really help your business outside of Buildertrend. Like the one we’ve done with 2-10. So, shout out.

Tom Houghton:

Yeah.

Paul Wurth:

David. He got a lot of pub this one.

Tom Houghton:

He did.

Paul Wurth:

He’s going to like that.

Tom Houghton:

He did say he was a big fan of the podcast. It’s probably because we talk about him like this.

Paul Wurth:

Yeah, I would be too.

Tom Houghton:

Yeah. Well, awesome, Marc. Thank you so much for coming on the podcast today and sharing your knowledge about warranties and how they benefit our collective clients. If you’re out there listening, I think you should take the next step. ‘Cause I really feel like this is a win-win not only for you, but for your clients. And that just helps make the entire industry better, which is what we’re all about. So, thank you so much for your partnership. Thanks for coming on the podcast and sharing your knowledge today.

Marc Jacocks:

Appreciate the time, guys. Thank you.

Paul Wurth:

Appreciate it.

Tom Houghton:

I just want to make a quick announcement to let our listeners know that this will be my last episode on “The Building Code.” I’ve had such a great adventure starting this podcast from the ground up and to see what it’s become now. I have to thank our great producers that we’ve had helping us out behind the scenes producer Brooke, producer Kaley and producer Danielle. Also, I want to thank all of our amazing guests that we’ve had over the past 94 episodes. It has been an honor and a pleasure to chat with you all. I wish all of our guests and you, the listeners, continued success in your businesses.

Love what you heard? Don’t forget to rate and subscribe to our podcast so you can hear from more guests that will benefit your business. Also, please check out our show notes page for more information on what we discussed on this episode. You can find it at buildertrend.com/podcast. Thanks for listening, and we’ll see you next time on “The Building Code.”