Will You Get the Home You are Building?

Builders can change your home as needed; the contract that you signed allows them significant latitude while building your home. Changes ranging from minor to significant are common and it’s best to understand the process so that you get through the build with your sanity intact. If you don’t know what to expect when building a home; what control the builder has and what control you have, it can be a very stressful situation. All too often, the home spec’ed out on paper is not the same home a buyer moves into.

The Builder’s Contract Bites…Hard

Some homeowners claim builders seem to wait them out until their warranties expire. Jerry Howard, CEO of the National Association of Home Builders, said he’s never heard of that happening and generally defended home builders. “I think American consumers expect a perfect home,” he said. “There’s no such thing as a perfect home, and so I think that there are often disputes that arise out of that.”

Some builders and projects allow many options, some a few and others essentially dictate everything you will get. They all have one thing in common; once you sign the contract, the builder controls virtually every aspect of your project. We see many “reoccurring issues” and some of them would be hard to make up. Every contract has a “substitution” clause; you agree that if your selection “A” isn’t available, the builder can substitute what they feel is of comparable grade and design; and in most cases they are not required to get your approval. In fact, many contracts don’t require the builder to even provide notice. We have had builders swap brick, granite, hardware, tile and other things and found out when visiting the site. Obviously the bullets fly the minute that happens but unless the contract says “with buyer consent” there is no legal footing to contest it. Consider just this one aspect of the typical builder’s contract; then understand that this can impact not only finishing materials but site work, mechanicals, appliances…whatever happens to be unavailable for your home.

I Never Saw Tile Like That

Builders are not builders, they are project managers. Bob is not the builder; Bob is a wrangler trying to keep the subcontractors on schedule, on task and have them do acceptable work. You want to bring Bob the occasional case of beer or lunch because you will be back and forth with him at every step of the build. Bob is much much easier to deal with than the suits at the parent company. The single most important thing any new home buyer can do is set expectations; your home is not custom and it’s not built by craftsman. New homes are a combination of thousands of components of different materials built out in the weather by subcontractors on a tight time frame. Corners will be out of square, floors out of level, tile and brick not set correctly, siding that shows ripples…and over the first few years it’ll settle and crack, squeak and groan a bit. Understand what “built to standard” in the contract means because you’ll hear it during the build. You’ll also hear excuses and explanations for things that simply defy logic and common sense.

Relax, it’s up to Code

Are you familiar with the IBC and IRC building codes? Any additional stipulations added by the state, county or city where the home is being built? The builder is and “it’s to code” is a common answer when pushed by a private inspector or someone else. Homes are built for the certificate of occupancy; the “CO”. Codes are the minimum standards; regularly changing but minimum none the less. The framers might have two or three days to finish; they routinely miss bracing, fasteners, nailing or bolt patterns and other things. HVAC guys almost always crush supply and return lines and fail to properly balance air flow. Bob telling you that Eddie will grade the site “so that water stays away from the home” is great, until the basement floods. It pays to have a home inspection before drywall and before closing; a quality inspector knows what to look for. On occasion, specialists like soils and erosion, concrete, ventilation, electrical and others are worth bringing over. Remember Bob’s building several other homes as well. The code inspector? They are most always overloaded and time mandates that they get in and get out.

Your Best Friends During the Build

Your best best friend is your buyer’s agent. Always – ALWAYS – have your interests represented by an experienced agent savvy in new construction. Click here to understand why; it’s far too detailed for this post. Qualify and research your agent; picking one that does a deal a year and works full time at the Delta counter really isn’t a good idea. The agent on site works ONLY for the builder; they are legally bound to represent their interests over yours at every turn. A skilled agent will be your eyes as the home is built, a good one will know inspectors and experts as/if situations develop. A skilled agent knows when to escalate things up the chain and how to leverage their position to ensure that your concerns are addressed. NEVER allow dual agency. Representation costs you nothing; you will not get a “rebate” or a dime not using an agent.

Above we suggested establishing a good relationship with Bob the wrangler. Just like talking the cop into writing you a warning avoids the formality of court, working with Bob to hash out things at his level avoids the corporate suits saying “no”. Use the Golden Rule with Bob; his plate is very full and ultimately he wants a happy future homeowner. This is where an experienced agent is key; knowing how the game is played often solves minor issues from becoming major problems. Good communication between Bob, the agent, the buyer and the builder’s agent is a huge asset. Everyone involved in your build does this for a living, do you? We’ve not met a builder that purposefully deceives a buyer but we also can’t recall a time that a new build went very smoothly without steady and consistent monitoring.

And an update on 02/04/2017 – A $7.2 million unanimous verdict was announced this week against John Wieland Homes and Neighborhoods of the Carolinas Inc. Faulty construction claims including rotting front porches, building code violations and defects in roofing, siding and window installation were levied by a homeowners group in Mount Pleasant, SC – click to read

Questions? Maybe we should talk.

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