Helter Shelter
Well, here it is, spring. The weather’s getting nice, and it’s a good time to go house shopping. If you’ve been thinking about buying a house, I say go ahead and do it. Mortgage interest rates are good, between 6 and 7 percent.
Even so, don’t get all excited, drive into a new development, run into the model house and sign a deal on the spot. That’s what most people do, but it’s just crazy to make a multi-hundred-thousand-dollar deal without attending to some details. For instance, before you go new-house shopping, get your very own real estate agent, to look out for your interests. The friendly sales staff in the model home might be good people, but they are duty-bound to sell you a house that their bosses built, whether that house is truly wonderful or a steaming pile of crap.
When you’re talking to the salesfolk at the model home, remember this: there is not one house expert among them. They don’t know a thing about how your house was built, or how it will perform. Their bosses told them that all the houses in the development are excellent, and they probably believe it. But the salesfolk don’t know anything about brick and mortar, walls or roofs. They just know how to get you to the closing table and get your money into their bank account.
The salesfolk will do everything they can to become your new best friends, but you need to remember: buying a new house is adversarial. When you peel away all the happy talk, it’s you against the owner, who is also the builder. It won’t seem that way, because the salesfolk will be pouring you coffee, bringing you cookies, complimenting your children and telling you how smart you are for choosing their award-winning home. You’re going to hear all about their warranties and their service after the sale. This is where you need to be downright cynical.
“The builder is no more your friend than the state-appointed psychiatrist is your friend,” says lawyer Jean Harrison. “Anybody who doesn’t believe that can go to the courthouse and look at my filings.” Just about every day, Harrison represents clients who’ve been ripped off, lied to and generally abused by builders.
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Which brings me to this: before you sign a contract to buy a new house, hire a lawyer. The builder/seller’s sales contract is not a take-it-or-leave-it deal. Your lawyer should be able to swing some things in your favor. For instance, most new-house contracts require that any disputes go straight to arbitration. That’s good for the builder, not so good for the buyer. If you get in a dispute over paint colors, arbitration’s fine. But if the builder screws up your house so it leaks, rots and fills up with toxic mold, you’ll be better off in front of a judge or jury.
Your lawyer would probably want to adjust some details of the builder’s warranty. Most new-house warranties, if you read them closely, guarantee little more than a house that’s not in danger of collapse. If a house cracks because of a structural problem, a typical warranty would only require the builder to patch the crack, not fix the underlying structural problem.
If I were buying a new house, I’d want a guarantee that the house will conform with the building code, which is a minimum standard, not a high standard that guarantees a perfect house. If the house doesn’t conform with the building code, it is, by definition, substandard. You don’t want a substandard house.
I know, I know. The local codes inspectors are supposed to make sure that new houses conform with the building code. Well, I’m sorry to say, that’s not happening. Builders are quick to point out—truthfully—that their new houses have passed all their codes inspections. Well, heck, every house passes its codes inspections. You can’t move into a house unless it passes. But I’m here to tell you, they don’t conform. I’ve been inspecting new houses for quite a while now, and I’ve yet to find a new house that comes close to conforming with the building code.
What are the codes inspectors missing? Well, they miss just about everything they can miss. Mostly, the codes inspectors are letting the builders slide on water-intrusion details. Coincidentally, most water-intrusion problems don’t show up until after the builder’s warranty runs out.
One more thing: before you buy a new house, hire the best home inspector you can find, one who’s qualified to find code violations. Don’t just hire the inspector based on his marketing speech, and don’t choose a cheap home inspector. There are no good cheap home inspectors. And for crying out loud, don’t hire a home inspector on the say-so of a salesperson who gets paid when you buy the house. When you interview a home inspector, ask him to show you a copy of a report he wrote on a newly built house. If you read it closely, you should be able to tell if he’s working in the interest of his clients or if he’s a “partner” of the sales team. If your home inspector finds problems with your new house—particularly code violations—you might just be able to get some of those problems fixed before you close.
Editor’s note: Walter Jowers is not doing new-construction home inspections these days. He’s focusing on forensic inspections and expert-witness work.