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10 ways to reduce new-home hassles -- Page 2

4. Opt for the expensive policy.
If you have a choice of policies, choose the more-expensive one if it will replace faulty equipment, give you a choice of repair people or allow you to transfer the warranty to someone who purchases your home. Packard says these are all features worth paying extra for.

5. Understand how disputes will be resolved.
A contract provision requiring that any disputed claim go to binding arbitration is common. Arbitration has drawbacks -- it's a process of compromise -- but it costs much less and takes less time than hiring a lawyer and going to court. If you are opposed to the arbitration process and the builder or warranty company won't take the arbitration clause out of the contract, the activist group Homeowners Against Deficient Dwellings suggests that you note that on the contract in case somewhere down the road, you want to appeal an arbitration decision.

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6. Have the home inspected.
Hire a knowledgeable third party, preferably an engineer, midway through the construction process and again just before you go to settlement. If there are defects, at settlement withhold money that will be paid once they are repaired. HADD also advises putting all requests for repairs in a separate document and mailing them to the builder, the warranty company and your lawyer to document your attempts to purchase a well-built home.

7. Document all problems.
After you move in, photograph and document any and all problems. You may need this evidence later. Be particularly aware of the 11-month anniversary of your homeownership; at one year, the builder is often out of the picture. Take stock of any problems and send the warranty company and the home builder written notification before the first year passes.

8. Read the warranty policy carefully.
Understand what's covered so you avoid making repair requests that the warranty company will deny. If you call your warranty company and it sends out an investigator, there will be a $50 to $75 charge if the problem you called about is deemed outside the warranty -- and the problem won't be repaired. So you'll be faced with finding a repair person and paying for both the repair and the warranty company's fee.

If you think you're right and the warranty company is wrong, don't be afraid to stand your ground. First ask to speak to the supervisor or the underwriter. If you don't get satisfaction, hire a licensed engineer to analyze the problem. It will cost you $100 to $150 per hour, but for a major problem, that's small change.

9. Consider going to court.
If you don't have a warranty, but you do have problems that the builder won't repair, Packard suggests that you consider small claims court. He says that's often the most expedient way to get some satisfaction. Because small claims courts handle so many of these cases, mediators understand the most common problems and handle them expertly.

10. File complaints.
Let everyone know that you are unhappy with your builder, including state building and regulatory authorities, the contractor-licensing board, the Better Business Bureau, state and local consumer-affairs departments and your state attorney general's office. The squeaky wheel gets the grease.

Jennie L. Phipps is a contributing editor based in Michigan.


-- Posted: Aug. 12, 2004


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