Unless you are in the top 1%, chances are extremely good that your home is the biggest investment you will ever make. That being said, most people take very few precautions, if any, when buying a new home. There are a lot of good builders out there. Most builders – good and bad – are in the hole because of the the economic downturn over the past several years. Human nature being what it is, it can be awfully tempting to a builder to cut corners to make up for past bad years. Most builders make the effort and do things right. But you need to protect yourself. Here are a few tips:
1) Scout your builder. Whether you are considering a custom home, a home under construction or a spec house, get online and find out everything you can about your builder. Go to the the Better Business Bureau site for your area, see if you can find other homes that he or she have built, look for prior or pending lawsuits and look for anything that might give you insight, good or bad, about the builder. Ask your builder for references. If you get any pushback when doing so, that is your first red flag.
2) Make sure that you have a written contract and that you understand it. Paying a lawyer $200-300 to review your contract and suggest changes can save you thousands later. And no, making changes in the contract will never be a game changer for the builder.
3) Study the plans and specifications and go through them thoroughly with your builder. Make sure that you know exactly which glamour components you are getting – tile, carpet, wood flooring, windows, appliances, counter tops, plumbing fixtures, lights, etc. I can’t stress that enough. Make sure that you can see the home in your mind’s eye. Change orders can significantly raise the cost of construction. That is worth repeating – change orders can significantly raise the cost of construction. Just in case you did not understand, CHANGE ORDERS CAN SIGNIFICANTLY RAISE THE COST OF CONSTRUCTION.
4) If the home you are looking at is under construction, strongly consider hiring a professional engineer to inspect. For reasons I will get into in a separate post, stay away from home inspection companies. A professional engineer’s inspection will be cost competitive and your odds of getting a quality inspection are better. Of course, scout your engineer just like you would your builder. In fact, that is arguably step 1. An engineer who knows the residential market can save a lot of heart ache.
5) If your new purchase is a custom build or home already under inspection, visit the site as often as you reasonably can. If the builder and sub-contractors see you often, they understand that you care – and that you are likely informed. I am not suggesting that you become the Grand Inquisitor, but you have the right to make sure that you are getting your money’s worth and, in any event, it’s fun to watch the progress. One way to massage this issue is to discuss it with your builder up front – let her know that you are interested. If you get any pushback there, that is another red flag.
Last – a home is built in stages. After the foundation is poured, the framing starts. After framing is completed, the roof, windows and siding are installed. Once the framing starts, it is too late to correct problems with the foundation. Once the roof, siding and windows are installed, framing issues are moot. Sure, your county’s or municipality’s inspectors will have to approve each step in the process, but they are making sure that the construction is being done in conformance with the applicable build code. They are not looking at quality. AND THEY OFTEN MAKE MISTAKES. If you have concerns, address them with the builder at each step. You might consider having your engineer make periodic inspections, that is what the owners of commercial properties do. Good luck with your new home.
Cum Laude graduate of Cumberland School of Law, Pet Mackey is a civil trial litigation expert who represents plaintiffs in business and consumer tort, contracts and construction, employment disputes and insurance. He is board certified as a Civil Trial Advocate by the National Board of Trial Advocacy, a Certified Alabama Mediator, and an “AV” rated lawyer by Martindale-Hubbell.