10 things homebuilders won’t tell you
Building homes is complicated, so make sure you understand enough to get the job done right – and for the right price.
1. “I’ll build your house on marshmallow.”
Population growth and urban sprawl mean there’s not much residential land left in many areas these days — and what there is may not be ideal. Shortly after John Duffy and his family moved into their $234,000 home in Highlands Ranch, Colo., long cracks started showing up in the walls, and the porch started pulling away from the house. After badgering his builder for the soil report, Duffy learned his lot was a hot spot for potential swell. (Writer Homes, the builder, was ordered to pay Duffy $544,000. John Palmeri, Writer’s attorney, says the company offered to fix the house, but “they were bent on going to court.”)
The Duffy family isn’t alone. In fact, a number of homes today are being built on “expansive soil” — earth that swells when it rains — without adequate safeguards. How common is the practice? About 50 percent of homes in Southern California are built on expansive soil, according to Patrick Catalano, founder of The Law Firm of Catalano and Catalano in San Francisco and San Diego, which specializes in real-estate and construction defect litigation.
But soil isn’t the only issue when it comes to shoddy construction. In October 2007, four hillside homes built in La Jolla, Calif., slipped off their foundations, burying two other dwellings in an alley below, after a landslide that damaged 111 homes. Catalano, who’s representing the owners of 25 of these homes, says that in about 20 percent of cases, the homebuilder is at fault, since the landslide occurred within 10 years of the home being built. (These cases are pending.)
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2. “I won’t just cut corners — I’ll sever them.”
Substandard work has always existed in homebuilding, but the collapse of the housing market and the increased costs of construction are making the problem worse, says Jonathan Alpert, a retired Tampa, Fla., attorney who represented homebuyers. Alpert says he’s handled cases in which builders didn’t seal roofs, in which two-inch concrete slabs were used instead of the four-inch slabs specified, and in which sewage pipes were cross-connected to drinking-water pipes.
In some cases, builders are skipping steps dictated by municipal building codes. In one Sarasota, Fla., gated community called Turtle Rock, four families cut open their houses in 1998 to ferret out the source of some mold growth. What they found, in addition to wet lumber, were several code violations, including missing hurricane straps, which are steel plates that tie the wood frame together and to the concrete base. Says Brian Stirling, the structural engineer hired by the homeowners to investigate, “If we’d had a strong storm, they would have had some serious problems.” Like what? “Like losing their top floor.” In 1999, the builder, U.S. Home, agreed to buy back the four houses and said it would make county-supervised repairs on 12 others in the subdivision. “We dispute the extent of the problems,” says the builder’s attorney, Fred Zinober. But by settling the case, he says, “U.S. Home did the right thing.”
“It used to be during the housing boom that builders were cutting corners because they were putting things up as quickly as they could stand,” Alpert says. Now the issues are inflationary pressures on builders and the need to increase profits. “The cost per square foot for construction is actually increasing while home prices are decreasing,” Alpert says, “so that’s putting pressure on builders to cut corners.”
3. “This is a rogue’s industry.”
Given how complicated it is to build a home, and how serious the implications are if it’s done incorrectly, you might expect homebuilders to answer to rigorous regulatory authority. Think again. According to the most recent survey by the National Association of State Contractors Licensing Agencies, only 18 of the association’s 27 member states regulate homebuilders. And of those member states that do regulate, only 15 require any kind of exam — Arizona and Maryland being two of them — and only 13 require on-the-job experience. Two states, Louisiana and Utah, have continuing-education requirements, but they’re the exception.
But greater regulation comes with a price. “Red tape and compliance issues add cost to building a new home,” says Carlos Gutierrez, assistant staff vice president for the National Association of Home Builders. “And that cost is inevitably passed on to the consumer in the form of a higher-priced home.” While he acknowledges that some regulation of the industry is necessary -- even welcome -- Gutierrez adds that “at a time when affordable housing continues to be a crisis nationwide, governments ought to be careful not to overregulate.”
4. “Public inspectors won’t catch my shoddy work.”
Max Curtis, a Livermore, Calif., private home inspector, says he hears it all the time from his homebuying clients: “Their builder tells them, ‘Why do you need your own inspector? This has been signed off on by the municipal building department.’”
Sure, the public inspector is required to check out your new house, but only to ascertain that it’s built to code — essentially, that it’s safe to live in — not that it is well-constructed. “They’re just looking to see if that wall is up and painted,” says Dwayne Jones, a Memphis builder.
And sometimes they don’t even do that well. On one inspection, Curtis found 64 items that the municipal inspector had missed, including a gas water heater lacking flues (without which the heater may leak poisonous carbon monoxide). Bottom line: Don’t rely solely on the word of a public inspector; hire your own person to inspect the building as well.
5. “Your warranty may be worthless.”
Many homebuilders tout 10-year warranties as protection against future problems. But these warranties are often extremely limited in coverage, particularly after the second year. “It gives people a false sense of security,” says Brent Lemon, a Dallas attorney who represents homebuyers. “Most of these basically require that the house fall down on top of you before they kick in.” Consider the warranty offered by Denver, Colo.-based Home Buyers Warranty. It lists 71 exclusions and, like many, states that the home must be “unsafe, unsanitary or otherwise unlivable” to get structural-defect coverage. Em Fluhr, the warranty company’s CEO, says, “If (homebuyers) detect any worsening of the situation, they can submit another claim.”
The root of the problem with warranties is that builders characterize them too broadly when they say they’ll help protect homeowners who discover a structural problem, says Anne Stark, a Dallas attorney specializing in homebuyer complaints. “Structural-defect coverage often covers only catastrophic failure,” Stark says. “Builders will say you’ve got a great warranty, but then you wake up in the third year with cracks all over your house and you call the warranty company and they say, ‘Sorry, it’s not a structural failure.’” Some states, like Texas, are aiming to alleviate the problem: In 2003, it created the Texas Residential Construction Commission to help builders resolve disputes without litigation. “We require a warranty whether the builder wants to give it or not, and that warranty needs to meet the minimum level of state standards,” says Duane Waddill, executive director of the commission. “Even if the builder goes bankrupt, the buyer has additional protection.”
Oh, how I do love the "streepdriveway" people. Look family, friends, acquaintances...we are getting a new house...up there on that hill; our view is going to be fantastic. It better be fantastic, because once we get into it we will have to defy life and limb to get out! Oh, but just think of all the fun the kids will have sledding down the driveway in winter...right into the main street of traffic.
Do you people have any clue what a 12/12 pitch is? Since you insisted on your pie in the sky, why didn't you have an elevator installed for your vehicle? That "steep hill" appears to be what you wanted...with no further thought than the end of your nose. The Realtor, Builder, Contractor and especially the next-to-slave laborers who built it must have had a great time.
We built a house similar to that. Just the windows were $10,000.00 (the view is what's important...right?) When the delivery truck came with the big window for the dining room, only the driver was in the truck, which could not get up the driveway. The crew had left for the evening...only my son (the contractor) was left at the job site. He estimates that window to have weighed a minimum of 500 POUNDS! He jumped in his truck and raced down to another job site...and had to hire 3 other workers (paid for out of his own pocket) to help him carry that %$&^#@ window up that steep hill. Now just in case I'm capable of a little math, that means each man was lifting 125 pounds...just so the new owners of their 2 million dollar home could enjoy the view. Just as the guys finished (exhausted and in a lot of pain) the Builder showed up...good timing.
It certainly is obvious to me that you people have absolutely no sense about what it takes to build a home on a "steep hill", nor do you have the slightest idea of the thousands of dollars a contractor must spend on a pickup, tool trailer, tools, Workers Comp. insurance, bond, payroll, office equipment, etc. Just for kicks (if you can get down that hill) go to a big lumber yard and price a big compressor, 200 ft. of hoses just for the compressor, 3 different kinds of nail guns (they will explain), a sawzall, really good framing hammer, a 100 ft. steel tape, a 50 ft. tape, and at least 4-25 ft. tapes (all tapes to be replaced at least every month) and anything else the lumber yard figures you will need to be a contractor. Just the bare minimum of tools should come to around $7,000.00 Just as an aside, one of our employees managed to break into our tool trailer (on the job site) and stole at least that much in tools. We got a $2,000.00 check from our insurance company. Damn math again...we were out $5,000.00!
I hope you get your other issues solved.
I'm a remodel contractor in Houston Texas. Licensed, insured, bonded. Half of all the work I do, is repairing faulty craftsmanship, uncompleted, faulty materials ect, ect. It is truly saddening to me to have to deal with all the anguish that these people have to go through to finally get the job done, correctley,with integrity and skills attained with over thirty years of craftsmanship. There needs to be more regulation of tradesman, so these damn fly by nights are disallowed from even starting a project that they probably don't know how to do in the first place.
One quote: "All TRCC inspectors are supposed to be licensed engineers by the state of --" Engineers have never built ANYTHING! Especially the "cooked the books" India and pakistan engineers. As a General Building Contractor from SOCAL ove 30 years, and my Father since 1952 "engineering has become an absolute JOKE"! Hybrid, fast growth wood, and engineered under gauged and poorly made non structural steel metal ARE JOKES! Poison pipes and drywall from China. ALL of life is a compromise. Ask yourself: "do I do the best for my employer (or Country)" if not, WHY should YOUR house or Doctor be worth a damn?
Look in the mirror FOLLOW THE MONEY out "leaders" have simply made jobs for NON workers (reglatory agencies) to make facist rules against THOSE WHO WORK!
Do YOU want to challege what I've said? LEHenson@msn.com now located in Shelby, NC 28150 NO here they don't even do stairways right here (no landings, etc.) BUT at least there are fewer criminal illegal "immigrants" out here. CA demon-rats, go sink into the ocean. Why would ANYONE let a peasant do anything for them? Everthing is only good enough for them to say (in American English) "where's my money"?
I challenge all of you - let me inspect YOUR home - I'll guarantee there will be a long list of defects. All businesses, homes and garages - at least use the long time "FHA Expansive Soil Detail" for your concrete and foundation. ALL STATES: at USE at least the minimum ICBO Codidfied standards when building. Inspectors and Engineers BUILD SOMETHING! "Those who can't do . . . choose those jobs". Simpson Corp., and other Companies stop have the Code rewritten for your benifit.
And no matter what a 2" by 4" board is still stronger than a 1 1/5" by 3 1/2" board - no matter WHAT Simpson and the engineers make up new standards "out of thin air"!
PS: the good cement and other quality USA building products are being shipped to China. Poisoned products are coming to the USA from them. Inspectors and government - do YOU care? Even Clinton sold our Secret GPS technology to China!
I am a Civil Engineer in Louisiana, the past few years have lent one of the largest reconstruction periods this state, and perhaps the country have ever seen. Recently I have worked for a grant program that FEMA and the state of Louisiana have made available to residents affected by hurricanes. The number of contractor fraud cases built up are small, however they still exist. Most homeowners here have a generally pleasant experience with their contractors. The ones that do break the rules and cheat the system are usually repeat offenders...
Now, while it is not the duty of a homeowner to inspect homes and check up on contractors, those who do their own due diligence usually end up sitting happy. So be smart and stay prepared for the worst case situation. God only knows you don't want to be in that percentage that gets screwed over.
In response to Leigh123, give me a break, you guys don't all drive around $50-60k trucks because you "need to make a living"...Yall drive those trucks around because the overhead/profit/fee's are usually pretty overpriced line items. I've done more than my fair share of construction work, and deal with contractors plenty, don't pretend it's not a lucrative business
As an architect with over 35 years of experience in design and construction I've seen and experienced a great deal of builder's shoddy work. At the same time I've come across builders that surpass the minimum code standards required. Over the years I've been hired to help homeowners with problem homes with code violations and/or as a result of cost cutting or just plain incompetence. I don't think you can make a general statement about home builders because as in many occupations or professions there will always be the dishonest and incompetent. As I have found out one must watch out for one self and if that means hiring a third party expert to watch out for your interests then it is well worth the expense. Spending some extra at the start of a project is cheaper than trying to fix problems after the fact when costs can seem to be infinite to the average home buyer.
This will sound self-serving but the issue of hiring an architect is often overlooked. These are professionals that are licensed by the states and that gives a client assurance that there is protection that may not be available when only dealing with a builder. Of course it is necessary that the architect is an experienced professional in home construction but that is something that can be verified easily. Often I have had a client that was in a panic because they were in over their heads and didn't know what to do to solve their problems or even completely understand the full extent of their situation. I was pleased when I was able to give them some peace of mind and that gives me a sense of satisfaction and accomplishment that goes beyond just earning my fee. So I recommend an architect or engineer experienced in home design and construction. Many times I have found a client hesitant in hiring an architect because the perception is that architects are too expensive and are only used by the wealthy. There are many of us in the profession that are not superstars but care about the work and services we perform and we know that reputation is the most valuable asset we have, without a good reputation commissions will soon stop coming our way. Try the local AIA chapter to get the names of architects.
Liegh: I don't think the article is rediculous, but it does make the home buyer look like a poor little victim. If anything they may be a victim of thier own stupidity but I am sure there are ligit cases where a person was screwed.
I don't know about the rest of you but I was always taught that you get what you pay for and that knowledge is power. How can you expect to get quality if you don't pay for it and spend time educating yourself? It's one thing to be frugal but it's another thing to be cheap.
This article is a joke. It takes a few worst case examples and applies it over the entire industry. The article suggest that builders are crooks and are just companies out to cheet people, which is totaly untrue.
I would like to know if this writer has a license to be a reporter, because his work is a shotty as the builders he writes about. He/she should be run out of the reproting business for writing on marshallow facts!
I am a builder up in the mountains of Southern California... I love what I do. I will walk away from a job that does not have a budget to build a quality structure. I know the guy down the street, that never finishes anything will get the job. He will tell the homeowner just what he wants to hear. Then, 9 months later, that homeowner will call me, crying about how bad the builder was and how he should have listened to me.... Well, its to late now. I cant help him... he is out of money and has a house that is only half done.
Take it from me, there are good homebuilders out there. You just have to be able to afford them. Why would anyone skimp on their home??? Build a home that is a little smaller but build it right.....
Obviously, the person who wrote this article has an axe to bear. This article is one example of how the home building industry is unjustly villainized. Not that there isn't some truth in each of these situations, just as there is in every industry, but it is the exception rather than the rule. There is a bad apple in every bunch, as they say.
The person who wrote this article focused on the edgy details that they know will appall people and give their story the edge they want it to have, without regard to reality. The writing is biased as opposed to informational.
In every business transaction; whether it's buying a home, scheduling a vacation or shopping for groceries, consumers have an obligation, to themselves, to do their homework and due diligence about the product or service they are buying. And when they don't and something goes wrong, they want someone to blame.
It's important to remember that you get what you pay for and nothing more and sometimes less. You can't begrudge the builder for having allowances that are less than the price of the amenities you desire. If the builder raised the allowances, you would tell him that his price is too high. You would then choose the builder that has lower allowances thus a lower price—and the same goes for warranties. It's not the builder's fault, it's the consumers' pattern that causes this condition to continue. If home buyers will stop rewarding the lowest cost builder with work, they wouldn't encounter some of the problems listed in the article. It's kind of like the quality of everything we buy: Cheap goods made in, say, China of lower quality than the same product made in, say, Germany, but you don't hear people complaining about the lower quality goods being inferior because they know that they get what they pay for. Instead of complaining, the say: "Oh well, I only paid two dollars for it." The same should be true for everything else—including new homes. It's not about blaming the builder, it's about educating the consumer.
Just a few suggestions from someone who has been in the construction industry for 18 years:
1) Get to know your superintendent. The builder isn't the big national company, or the local custom builder, it's the guy on the job everyday supervising the work, making sure it is done correctly. The better the super, the better the home. Make a point to meet with him before construction starts. If you feel he can do the job, proceed.
2) Get to know the municipal building inspector (or inspectors). Most are very good at what they do, and are experienced and have training or certifications. In this market, they absolutely have the time to meet with you.
3) Find your state standards for construction. In Arizona, the standards are set by the Registrar of Contractors. They have a pamphlet (available online) that gives you specific issues, tolerances, and remediation for those issues.
4) Find out what the builder's internal quality standards are, and their customer service policies. You would be surprised to find out how much these can vary. Who buys a car without knowing what the warranty is?
Remember that your home will likely have some issue during the first year, hence the warranty. The severity of that issue will depend on how well the super and inspectors do their job. By doing a little homework (and who shouldn't, considering the significance of the investment), you can have a much better experience with your new home.