By Ron Wynn
Everybody has a dream of one day owning a perfectly built, beautiful, brand-new home that meets all of their criteria. Of course, people say I’d need to win the lottery for that to happen, but again many people here on the West Side have been blessed with the opportunity of having either a large inheritance or excellent employment that allows them the opportunity.
In fact, new homes are selling like hot cakes all over the Westside and therefore, builders keep replenishing the inventory of homes that are selling before they even come on the market. There are some precautions and suggested advice I recommend if you are a buyer.
Be sure to hire a real estate agent who is not only knowledgeable about Westside values and area locations but who understands new construction and has experience dealing with new homes and a myriad of builders, some with great reputations, others perhaps with not such a good reputation.
A good qualified real estate agent has the knowledge and ability to point out floor plan and construction flaws, and also has the track record with any number of builders, prominent here on the westside.
Not every builder has a known track record. Some are new in the neighborhood and are building for the first time. Other builders have an established reputation, having built many homes. From this group of builders, some have a very good reputation based on workmanship quality and for customer service.
Others have a reputation for not standing behind their product or using substandard materials, even some with pending lawsuits and bankruptcies.
Be sure to hire a qualified inspector to inspect the newly built home and perhaps also inspect geology and hillsides if applicable. Even though your builder will provide a certificate of occupancy and provide city sign off cards, that is not enough to prove that the house has been approved for quality control or that the soil is conducive for adding a pool without unanticipated engineering costs. Hillsides are particularly tricky, don’t skimp on your inspections. When a new home is completed there are improvements that will pass code, but are still not completely up to par for comfortable owner occupancy.
Go through the property thoroughly yourself with your real estate agent to prepare a punch list, in addition to a more sophisticated list that will be provided by your home inspector. Pay close attention to proper and adequate ventilation and wwaterproofing Drainage is also very important and must be verified.
Perhaps you are buying a house that is not 100% complete and you wish to make upgrades. Making upgrades will personalize your home and can be very beneficial if you have specific needs and desires that are not generic to a home the developer is building for the general public.
Be aware however, that when you stop the progress of the developer/builder, you are not only making him restock items that perhaps are already purchased, which is expensive, but you are also slowing down his timeline. Builders usually borrow hard money and are paying high rates of interest. As you slow the process down, the builder is going to expect to be compensated for that delay.
That delay can be very costly to you and indirectly make your upgrades significantly more expensive than expected. Be sure to nail down a timeline and a fixed price for what the upgrades are going to cost. Get the commitment in writing from your builder so that the upgrades don’t suddenly end up costing you more than your handshake agreement. Also, confirm any replacement item with the manufacturer’s stock and model number.
Have your contract reviewed by a lawyer if you are drafting agreements other than those in the California Association of Realtors contract. Any agreements that are cumbersome should be analyzed for clarity, avoiding ambiguous or poorly written and unenforceable commitments. Never agree to void a state of California builder’s obligation.
Also, be sure to use the new homes contract which protects you as a buyer unless the property is not 100% new. Many builders will escape the “new homes” contract and the new homes warranty by leaving one board of wood or one wall. As long as a builder leaves one board of wood, the house may qualify as a remodel even though the house is 99.9% new. Ask for a legal interpretation of what the consequences may be to you as a buyer with a remodel permit vs a build-new permit.
Personally check out the builder’s reputation. A builder’s reputation is extremely important. One lives with their reputation, either good or bad. A reputation can be built on many levels; from customer service and reliability, to a track record. Check with the Better Business Bureau, check online for reviews, check with your real estate agent and other agents in the community, and make your own online search.
Perhaps you might call other individuals having purchased their home from this particular builder. It is very easy to get names, phone numbers and email addresses of people who have dealt with one builder or another in the past. A quick conversation or an email communication will lead you in the right direction, either telling you that the builder has been reputable and the home has been operating to par or quite the opposite; that the builder has been difficult to work with, impossible to locate, and not responsive in any way to dealing with issues that should have been dealt with long before.
Go back to the property on at least two or three occasions, and if possible, visit the property before putting an offer in, after a heavy rain. Here in California, it is very difficult to analyze a property in the rain since we have so little. However, if you are fortunate enough to be looking for a property during the rainy season, it would be very opportune to examine the property yourself or with a physical inspector after a heavy rain. Rains tell many stories including those of moisture and water penetration. Test the air quality. Also have a mold specialist, if you are suspicious, investigate the property. An environmental specialist who can tell you if there have been products used that could be “sick home products”, which might include formaldehyde. Concerns and risks are explained by googling products used in the home that will make you sick. There are numerous articles online that will explain about adhesives and plastics sometimes used that should be avoided for family safety. Also review all disclosures from when the land was purchased, provided by the previous owner. If possible, meet the neighbors both to the right and left side to be sure they seem like good people to share a fence with. Neighbors can be an occasional nightmare, so why not introduce yourself as a potential neighbor in advance and exchange a few words?
Take all of these items into consideration before submitting an offer, but do not overlook the opportunity to buy the house of your dreams. There is nothing more exciting than owning a brand-new home that has never been lived in by anyone else that leaves you all the opportunity to work from there. Landscaping is another issue that you can either negotiate or get a credit for.
But, bear in mind that most builders will cut corners anywhere they can. Landscaping, since it is at the very end, is usually one place that builders will cut most. Many builders go completely over budget, and when they get down to landscaping, their accounts are bare. If you purchase a property before the landscaping is complete, be sure to get a visual and documented landscape drawing site plan so that you are not later disappointed that the landscaping anticipated failed to be complete. As a reminder, get all agreements and commitments in writing.
Any item that is not complete, must be articulately documented. That includes appliances and everything else that might be an agreed upon upgrade. Get the model number and the appliance stock number if appliances are not yet installed. It is very easy for an unscrupulous builder to change appliances out at the last minute if they have not been documented in writing with the stock and model number.
Your transaction will run much more smoothly with an experienced “new construction real estate specialist” to represent you. Interview for a strong and experienced advocate before signing with just an ordinary real estate sales person or long-time friend who happens to be a licensed agent.