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As a home builder, we always encourage our buyers to get a 3rd party inspection. We make ourselves and the property very available to our buyers. Obviously as a realtor you want the sale to go through. Attain a copy of the builders warranties that you can pass on to your buyers for their peace of mind. They too can also purchase extended warranty coverage if they so desire. Plus, most builders would offer to pay the $400 buyers inspection fee.
I have found that the custom builders in my area are fine with buyers getting a private home inspection; but I have never found one that has offered to pay for it!!!
The tract builders are the ones that seem to be suggesting to buyers that there is no need for a private home inspection. A couple of them are somewhat pushy about it.
Yeah, we don't pay for the buyer's inspection. What we do pay for, that most builders do not, is expanded title insurance. Expanded title insurance is the insurance that covers you against getting liened on the house for bills the builder didn't pay. It is why most builders have a specific title company they prefer to close with.
Even if we throw out the disreputable builders and only look at the rest, even for a builder who regularly pays their bills, and intends to pay the bills on your house, if you close on your house today and the builder dies in a car crash tomorrow, this month's bills wouldn't have been paid yet, and any bills from the last 30 days worth of work wouldn't even have been billed yet. All of those bills will be liened against your home.
Anyone who closes on new construction or a recent remodel without expanded title coverage is just asking for trouble. Thus, if our buyer doesn't pay for it, we do.
I know it's a little off topic, but talking about closing a new construction house, I think it is important enough to remind people. I've seen people lose their home and have to file bankruptcy because they bought a new construction home, and then the builder skipped town, leaving them with both a mortgage and hundreds of thousands of dollars in liens.
...The tract builders are the ones that seem to be suggesting to buyers that there is no need for a private home inspection. A couple of them are somewhat pushy about it.
Even in this day and age where there is plenty of information about builder defects, many people still think a new house is perfect or near perfect. Not true. A well built new house can have many advantages over a older home, however, they are not "perfect". A poorly built new house can have far more problems versus a well built and maintained older house.
Think about it. There is probably about 40,000 items built into a average new house. A few of those parts are going to be defective or they will be installed improperly (sometimes both!). It's going to happen! Even if you are the best builder on the planet it happens.
What happens next is the most important! What will that builder do? Will they be managing the project well enough to find and correct those issues right away on their own (without anybody else finding them first)? If your builder fixes those problems when THEY find them (hopefully as soon as the problems happen), you probably have a very good builder. Yes, these builders do exist!
Second, will the builder fix the problems correctly (and as soon as possible) when the problems are found by others (by city inspectors, buyers inspectors or the home buyer themselves). If they do so, you have a good builder.
Third, will they allow the home buyers inspector without too many problems? A good builder doesn't have anything to hide and in some cases will welcome a third party. It's in their best interest to "sell" you on the idea that they have built you a good house. An third party inspector can help (or hurt) that. Even if the inspection doesn't go well, what that builder does after that can tell you a lot.
If they don't allow an inspection, that is a red flag. There is no way around that. It doesn't mean that they are hiding issues, but how are you going to know?
Yes, its an annoyance to have to allow an inspector in and yes, it does take up valuable time. But it has become part of the process of home buying so a builder will just have to learn to live with it. Almost every existing home manages to allow an inspection, so why would a new house be different?
When people say that the city (or whatever government agency that does it in your area) has inspected the new house and found it to be fine it doesn't mean it is. Keep in mind what the city is looking for and what the buyer is looking for can be quite different. Granted some will be the same, like life and safety issues.
Some city inspections may be rigorous and excellent, using inspectors with decades of real construction experience.
Others may not be so, in the worst cases, some cities staff those positions with political hires, and may not have ANY construction experience at all! It can be worth nothing at all.
Most city inspections will be somewhere in between those two examples. I have seen in a two story house, if the downstairs "rough in's" are OK, the inspector will pass the upstairs as well without looking at it too closely (or not at all). So the downstairs is OK, but that big problem that is only upstairs gets missed.
Its been noted that builders don't pay for the buyers inspection. The buyer should be the one paying, so the inspector is working for you not the builder.
Anyone can pay for their own home inspection. But it's the seller's (or builder's) prerogative to tell you to pound sand if they don't agree to what your inspector wants done.
Anyone can pay for their own home inspection. But it's the seller's (or builder's) prerogative to tell you to pound sand if they don't agree to what your inspector wants done.
In that case, its a issue of negotiation. If its a serious issue, the builder may have no choice but to do a repair, the government inspector may require it. If it isn't, yes, the buyer may have to take it in the condition its in. Sometimes buyers may be far too picky. Unfortunately, every house is a case by case thing. The sales contract is the first place to look.
On that note, you may not want to use the contract the builder wants you to use (some builders have their own contracts drawn up). Sometimes they protect themselves more then the buyers. When you have a problem you may have surrendered some of the options you once had. Then you are at the mercies of what the builder will do.
Anyone can pay for their own home inspection. But it's the seller's (or builder's) prerogative to tell you to pound sand if they don't agree to what your inspector wants done.
In my area, builder's give a "bumper to bumper" one year warranty so ANYTHING an inspector finds that needs repair, the builder will do without any hesitation.
I always encourage buyers of new construction to obtain a home inspection by a third party. We have discovered the jaccuzzi tub not working, doors not shutting properly and improperly installed, leaks in plumbing, etc. In my opinion, this inspection is a must! Jen Basnight
About 1/2 of my business is new construction, I'm a preferred lender with about half a dozen builders. Very few get the home inspections, which to me, is crazy. Home warranty or not, there's far more incentive to be taken care of when the buyer still must close. We've had several builders go under and their warranties went right with them.
I have buyers that prefer to NOT spend the $400 for this home inspection, saying they have a 1 year warranty on their new home (which is true in my area).
You can't fix stupid. They're people who will have to learn from experience.
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