Home Inspections with New Construction  
by Edwin Menge

Get a Home Inspection

Even if the home is new construction, I always recommend to my clients that they contact a home inspector to do a pre-close inspection.  Some would think that this is a foolish waste of about $300, but I certainly do not!  A $300 home inspection can save the home buyer $1000s of dollars, not to mention headaches, in the long run!

I know a few real estate agents that would balk at having a home inspection on new construction.  So, let me give you a little background and then some real life examples on why I recommend home inspections on new construction to my clients.

Let the buyer beware:

For your information, Alabama law employs the rule of "Caveat Emptor", or more commonly stated, "let the buyer beware".  So, short of any life threatening or hazardous living conditions, if you don't ask, or have the home inspected, the builder and the builder's agent aren't obligated to inform you of any defects.  If you discover them after the closing, you may not have legal recourse to pursue remedy of the situation.  Therefore, I believe it is my fiduciary duty to advise all my clients to get home inspections and ask as many questions as possible.  Yes, even when buying new construction!  

A quick example:

An associate of mine recently had a client turn down the home inspection on their new construction home.  The home closed.  Imagine their surprise the first night in their new home when they went to turn on the heat and it didn't work. Five days.  That is how long it took to get the builder to send someone to look at the problem.  Not only that, it happened to be during one of the coldest weeks in Birmingham for 2006!   All their troubles could have easily been averted or resolved prior to closing by having a home inspection! 

Yet another example:

Recently, I was forced to submit a mutual release for a new construction home due to shoddy and crude workmanship.  Although the problems with the home were numerous and obvious, my client was prepared to continue with the scheduled home inspection if the release was not granted without an official report.  Although the builder's representative responded to our release request with a vicious personal attack, in the end, my client was released from the contract with all earnest and upgrade monies returned.

But let's say the builder wouldn't sign the mutual release based upon poor workmanship.  We would be reliant upon a home inspection.  Without having a licensed home inspector perform an inspection and detail the problems in writing, more than likely, we would've been in a fight to get the repairs / changes accomplished or to terminate the contract with all monies returned.

Let me give you another example:

I was working with a relocation client from the west coast.  She selected a new construction home.  She paid for some upgrades.  Then prior to the home inspection, she noticed a few things that needed to be repaired or corrected with the upgrades.  At the builder's request, we presented a short "punch list" to the builder's agent. 

In our meeting with the builder's agent, my client was informed that since she was not native to Alabama, her standards were too high.   Also, that as her representative, I, being native to Birmingham, didn't know any different and should inform her that the home construction was actually "good" for the area.  Long story, short, because she exercised her option to have a home inspection,  the items on the original list, along with a few new items, were repaired and corrected prior to the closing without delay.

Although the above scenario is a great example for the need of buyers representation, I think it also highlights one main reason why having a licensed home inspection is a great idea.  Without the an official home inspection, I have no doubt that request to have these items repaired would have been devalued or neglected by the builder.  Even though you may receive a new home warranty, I've seen builders take weeks to finish even simple repairs!

So what can you do?

1. Utilize the Home Inspection Clause in the General Sale Contract

Most sales contracts contain a clause pertaining to a home inspection.  These clauses are generally aimed at protecting the buyer.  Often, when a home inspection is performed and the seller is unwilling or unable to make the needed repairs, the sales contract is cancelled and any earnest money is returned.  If a home inspection clause is passed over or forgone by the purchaser, they may have forfeited any earnest money if they decide to terminate a contract after discovering needed repairs that the seller refuses to address.

2. If repairs from the report are unfinished, hold money in escrow at closing.

A couple from out of town that I was representing needed to close on a specific date due to time constraints.  Instead of postponing the close until the last items were finished, we proposed holding a few thousand dollars from the sale in escrow until the repairs were completed.  Believe me, those repairs were well done and finished within a few days of the closing.

3. Take Photos

If you are allowed to walk through the home, take photos of things you see as flaws or needed repairs.  This documentation is normally provided to the purchaser with a home inspection.   Yet, if you choose not to have the inspection, the photos can be a great asset when you are attempting to have those repairs made on your own.

 4. The last resort.

If you feel pressured by the builder to not use a home inspector, or you personally believe the work to be unacceptable and cannot reach a resolution, be prepared to walk away.  Personally, a builder's agent that continually advises against having a licensed home inspector examine the property always makes me a little leery.  Also, if a builder is arguing about making repairs prior to getting paid on the home, can you imagine what it will be like after they are paid?

 Do yourself a favor:

Although the above examples are extreme, they can happen to you.  So do yourself a favor.  Get a home inspection.  Yes, even with new construction.

 

About the Author

Currently chasing the next big housing fad, Ed works in his down time as a Birmingham Alabama real estate professional at Century 21 to get an early jump on the other chasers.