How to Protect Yourself When Buying a New Home
Nov. 6, 2006 — -- There's an old joke in the construction industry that if you want to build a home, you need an architect, a contractor -- and a marriage counselor. Many people think building a brand new house is a way to avoid buying somebody else's problems.
That may be true, but trust me, you're buying plenty of potential problems of your own. One problem is your own expectations. You may expect a new house to be a perfect house.
These days, houses are built so fast, and county inspectors are so scarce that quality can really suffer. Construction crews can be obnoxiously careless. I found old food wrappers and cola cans inside the walls when I did some work at my own house.
Paying more money doesn't necessarily guarantee that you'll be insulated -- or that your house will. Over the years, I've heard home-building horror stories from people building modest houses and mansions.
Unless you're a construction expert with plenty of time to spend at the job site, you should hire somebody to represent your interests during construction. I'm talking about an engineer or home inspector with experience scrutinizing new construction.
They should inspect multiple times: after the concrete is poured, after the framework is done, during the plumbing and electrical phases and once the house is finished. Before you sign a contract with the builder, make sure this inspector will be allowed onto the property during construction.
Some home building contracts forbid inspectors. You see, the builder owns the property until the house is complete. Some states may require builders to cooperate with your inspector. Find out.
If there is one time that you are going to do your homework, this is it. It's the most expensive purchase you'll ever make. The steps below are pretty involved, but well worth the time.
How to complain:
If you think work was not done to code, contact your county building inspector and ask for a repeat inspection. To complain about a bad builder, try your county and state consumer protection offices first. They can advise you if you need to contact specialty departments too.
It varies from state to state, but you may need to contact the home improvement commission, the department of labor and licensing, licensing and regulation, the department of professional regulation or the board of contractors. Also make your displeasure known to the Better Business Bureau.
Now, here's a great deal: in some states, if a licensed builder or contractor does shoddy work and won't make repairs, the state will pay you back. It's called a "construction recovery fund" or "construction guarantee fund" and it can be a lifesaver.
For other pre-closing tips from the NAHB, click here.
