10 ways to reduce new-home hassles
Buying a brand new home? Be prepared for less
About 15 percent of the 2 million dwellings constructed
each year in the United States have at least one construction defect
that demands repair, says Alan Mooney, president of Criterium Engineers,
an engineering firm with offices in 35 states. Criterium's primary
business is new-home
"Buying a new home is a scary process,"
Shoddy construction, however, is getting a lot of
public attention and some people think the situation is getting
better, thanks in part to warranties and other kinds of insurance
that builders must carry.
"It's an economic issue. The insurance industry
is pushing the home-building industry to adopt quality standards,
otherwise the costs are just enormous," says Mooney.
If you're considering buying a brand new house, here
are 10 ways to make sure it comes closer to being your dream home
rather than a repair nightmare.
1. Deal with a reputable builder.
There's no national rating service, but marketing information
firm J.D. Powers does compile home-buyer
opinions on the quality of the nation's largest builders (35
percent of all homes are built by the top 10 largest builders).
It's also wise to talk to people who have bought new homes built
by the same builder, particularly those who've lived in houses two
or three years. "That's when problems are likely to surface,"
But don't be surprised if people aren't very forthcoming
about a builder's shortcomings, warns Lee Seglem, executive assistant
to the New Jersey State Commission of Investigation, which examined
construction defects in that state. Out-of-court settlements and
arbitration agreements routinely prevent litigants from talking
about the outcome of their cases. And in any event, "People
fear that revealing defects will have an impact on their home's
resale value," Seglem says.
2. Check into warranty coverage.
Ask the builder if he provides a builder's warranty backed
by a third-party insurer. If he says no, that may be a good reason
to look elsewhere.
3. If there is a warranty, find out who backs it.
Some large home builders offer their own 10-year warranties.
As a rule, this type of warranty is not as good as an independent
warranty because the builder has more at stake financially. If the
builder is faced with multiple defects, a likely scenario when every
house in a development is built the same way, he'll have to spend
a lot of money to make the repairs, says Bruce K. Packard, litigation
trial and appellate lawyer for Davis Munck in Dallas.