Erik Gabrielson, HousingZone.com Editor
April 20, 2001
HousingZone

Giant homebuilder Pulte Homes fell under scrutiny this week from an NBC Dateline report of a South Carolina couple's dissatisfaction with the terms of their home warranty. Robert K. Burgess, chairman and CEO of Pulte Homes, acknowledged in a written statement that although the featured Pulte home did not meet the company's expectations, the NBC story was biased and did not reflect the values of the company.

The couple profiled in the story purchased a Pulte home in Greenville, S.C., and were unsatisfied with the quality of construction and the warranty Pulte offered. The couple described their house as a "lemon" and listed complaints including faulty wiring, leaks, frozen pipes and structural problems.

Dateline also reported that three other families in Greenville went through similar mediation with Pulte as a result of their homes' construction and warranties, and "dozens of unhappy Pulte owners from across the country" had also come forward.

"Among some of the important facts presented to Dateline, but omitted from their story, is that Pulte Homes has one of, if not the best, warranties in the industry," Burgess said. "In addition, the company has been recognized as a leader for having the lowest warranty claims in the industry."

The Dateline story did mention that Pulte was ranked No. 1 in two markets by the 2000 New-Home Builder Customer Satisfaction Study performed by J.D. Power and Associates, an independent firm that conducts quality and satisfaction measurements based on actual responses from consumers.

The study questioned 25,500 buyers of newly constructed homes across six major U.S. markets: Chicago, Dallas/Fort Worth, Houston, Las Vegas, Phoenix and Washington, D.C. To be included in the study, a builder had to close a minumum of 250 homes in each market during 1999, according to J.D. Power.

Pulte ranked above average in five of the six markets, including first-place rankings in the Chicago and Las Vegas markets. The company ranked below the market average in Washington, D.C. (View the entire J.D. Power 2000 New-Home Builders Study.)

"No company is perfect and even the top performers can receive poor ratings from a few customers," according to a statement on the J.D. Power Web site. "But when the responses from thousands of consumers are added together, the industry leaders simply have higher overall ratings than their competitors. The expectation is that you are more likely to be satisfied with an industry leader than with those that receive lower overall ratings."

In February, Pulte Homes was awarded the 2001 Summit Award for exceptional quality in construction and outstanding customer service to new-home buyers. The award was presented to Pulte by the Professional Warranty Service Corporation (PWC) and Zurich Insurance.

Pulte received the award because of its low percentage of repairs performed under warranty. According to the PWC, about .1 percent of the 37,000 Pulte homes enrolled in the warranty program since 1998 have required warranty repairs. Results of PWC's findings were not reported by Dateline. (Read Pulte's 2001 Summit Award press release.)

According to Pulte, the top three service-related issues that customers request Pulte to repair are problems with paint, interior trim and carpet.

The following graph from Professional Builder Magazine's 2000 consumer survey, a nine-page questionnaire that 997 new-home buyers completed, indicates the industry average of warranty-related service by product category:

Representatives question all new homeowners about their level of satisfaction with all aspects of the home-building and home-buying experience, according to Pulte. This data is formed into Pulte's Internal Customer Satisfaction Measurement Surveys (CSMS).

According to Pulte, CSMS results showed an 8% increase in customer satisfaction in the "Overall Experience Rating," which is the most comprehensive measure in the survey.

Pulte data also shows 31 percent of their 2000 business came from repeat or referred buyers, which accounted for more than $1 billion in revenues.

"Pulte Homes has grown to be among the nation's largest homebuilders based on our reputation for delivering quality homes and superior customer service," Burgess said. "We will continue to work hard every day to satisfy and delight each Pulte homebuyer."

The BBB's complaint statistics for 1999 ranked home building contractors as No. 19, with 3,996 complaints nationwide. Sixty-six percent of these cases were settled.

An e-mail sent by HousingZone.com to Dateline requesting an interview about the fairness of their report has yet to be answered, but the contents of Dateline's reply will be posted if it becomes available.