Tips For New Home Buyers
Tips For New Home Buyers
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Using a REALTOR as your buyers agent usually costs you nothing.
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A REALTOR can advise you about contracts written by builders specifically designed to protect the builder and help you prepare a state approved contract for new construction.
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A competent REALTOR will keep you appraised of contract deadlines.
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Your REALTOR may recommend an inspection during various phases of construction. The following letter to the editor of Inman News illustrates the importance of independent inspections.
LETTERS TO THE EDITORRe: 'Do new homes really need a home inspection?' (Dec. 5)Dear Editor:Our organization has always strongly recommended buyers of newly constructed homes get a competent inspector in there before they agree to close. I'd add that new homes really need inspection during construction before serious mistakes can be covered up, unobservable to even the best inspector. Other than that I applaud anyone in the housing industry who openly admits that new homes need quality inspections. There are many in the industry that still tell buyers it isn't necessary, or steer them to inspectors who won't be thorough and who will just make sure the deal goes through.Our organization receives builder complaints every day. What we hear is just the tip of the iceberg. We wish they'd find us before they ever start shopping for a builder, because prevention is always better than trying to pick up the pieces after they close. By then, their legal recourse is slim. The contracts and warranty policies almost always contain an arbitration clause, which may force them into private and even biased dispute resolution procedures. Building codes are not always enforced. Once a builder has the buyer's money, there is little incentive to come back and fix mistakes. Third-party warranty policies have been called "illusory" by some attorneys because of what they do not cover. Many serious defects aren't readily detectable on a finished home until serious damage is done, costing the homeowner tens of thousands of dollars, or more, to repair. Some homeowners sell without disclosure and get sued by the rightfully angry buyers.We've been made aware of how complaint histories and even court records are being made increasingly unavailable to the researching public. I myself know of builders who have no negative public record but who have built some seriously defective homes. I've seen homeowners financially ruined by a construction defect case. A lot of this could be prevented. One of the smartest things home buyers can do is learn to spot common construction shortcuts so they could eliminate many builders from consideration, such as builders who omit window flashing or who don't slope the property away from the foundation to name only two common problems. Then, they can hire professionals to look at builders' homes and decide which one to hire. It makes no sense to spend time and money researching and inspecting if one can quickly eliminate a builder based on defects they can learn to spot from the street as they drive by!Buyers should not even consider buying from a builder who won't strike the arbitration clause, who won't allow independent inspections, who won't allow buyers to take a blank contract to their attorney for review, or who won't agree in writing to correct all defects before closing. We see buyers "forced" into closing on unfinished or defective homes because of builder intimidation, one-sided contracts, and a family having no place else to go unless they close. We don't advise ever closing on a defective or unfinished house, even if it means walking away from a deposit. A construction defect case will cost much more.Buyers need to realize what the traps are and never get into them. Though we offer a lot of helpful information, no one can wave a magic wand and get a homeowner out of a bad situation once they've signed the contract. It is a lot of hard work and expense, and can take years, only to lose or never collect damages if they win. Meanwhile, a bad builder may go on unscathed thanks to laws that builders lobbied for, which protect builders at the expense of consumers.There is a dangerous assumption among consumers that codes and laws are enforced and that one can sue a bad builder if things go wrong. Often, none of those things happen. If buyers knew about these problems before they signed a purchase agreement, they might avoid the entire problem. An inspection is a big part of what they can do to protect themselves though it's not the only thing.
Cindy Schnackel
National secretary
Homeowners Against Deficient Dwellings
Norman, Okla.
