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Home Buyers
Tips
When shopping
for a builder:
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Research your
builder. Find out where the builder operates and under what names.
One way builders get out of lawsuits is to have multiple
corporations that individually have few assets.
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County or state
court records may reveal whether the builder has been sued.
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Research the
company using the local Better Business Bureau
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Search the
internet for stories and websites about your homebuilder.
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Search the
archives of you local newspaper. Some newspapers provide archives
through internet databases.
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County Assessor
records may show whether there are liens on the builder's
properties indicating if the company owes money to someone. A lien
can be filed on your house after closing if the builder did not
pay a subcontractor!
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Introduce
yourself to your potential new neighbors. Talk to them about their
experience with the builder.
After deciding
on a builder:
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Ask for
everything in writing! If you have any conversation with a
real estate agent or representative from the builder do not
hesitate to ask for a summary of the conversation in writing. If
they insist on talking by phone, tell them you are too busy, and
ask them to write you a letter.
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You may have a
pre-construction meeting. Take detailed notes and ask for a
summary of this meeting in writing.
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Keep a detailed
diary and notes of all events during the purchase,
building, and the warranty period of your new home including all
telephone conversations, face to face conversations, voice mails,
answering machine messages and emails with real estate agents or
any builder’s representative.
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Start a file and
keep all documentation organized.
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Invest in an
inexpensive digital camera. Document everything with the camera
and organize your pictures by date.
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At any design
meetings, make notes and take pictures your selections in roofing,
flooring, cabinets, counter-tops, siding styles and colors,
shutter styles and colors. Be sure to record all model and color
numbers of your selections.
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Ask to see a survey of the lot or a
plot map before you buy. Take this document to the lot and walk
the property line. Lot stakes may have been moved by neighbors,
contactors, or vandals. Make sure all encroachments are clear
before closing. If you find an encroachment after closing, have it
removed. Do not sell it to the encroaching neighbor because it is
too costly and involves too much “red tape” which may take years
to finalize.
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Visit the
building site often. Inspect everything and pay attention to
details. Talk to the contactors. Ask them questions. You can learn
valuable information from them. Take notes and pictures. Get a
copy of the garage door key. This may come in handy later.
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Make note of
contractor names, vehicles and license plates that are working on
your home. If there is an issue, your builder may claim that they
don’t know who worked on your house.
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Pay attention to
weather reports during construction. If rain is forecasted, visit
the building site to observe for lot drainage issues. Inspect the
home and foundation for leaks in its various building phases. Some
builders leave critical components exposed to the elements during
construction such as sub-floors, doors, drywall, and carpet. Take
pictures and inform the builder immediately of any water damage or
leakage.
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Write your
builder immediately upon discovering any defects during
construction, or after closing on your home.
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Attempt to
complete a private walkthrough on a weekend before the official
walkthrough. Most builders will attempt to rush you though the
final walkthrough. Typically, you can enter through the garage
after the doors and locks are installed. You did get a copy of the
garage door key…right?
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Inspect the home
using a flashlight, inspection mirror, level, electrical outlet
tester, phone outlet tester, and other tools during construction
and final walkthrough. A flashlight beaming along a wall will
expose poor workmanship.
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Use a string
pulled taught around a door to check for warping.
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Request written
replies to be returned within 14 days
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Request all
repairs to be completed within 30 days. If defects are considered
a safety hazard, request immediate attention. At a minimum ask for
a date of completion in writing.
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Make all letters
brief and factual
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Keep all
original document, only mail copies
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Send all
communications via certified mail
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Keep all
documentation organized
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Keep all direct
contact information for the real estate, builders, warranty
companies, and any government agency representatives. This will
avoid front office screening, operators, and automated phone
menus.
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If you use a
third party warranty company, document all communications.
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Respond to their requests exactly
as they ask and before any deadlines. Many times an unreturned
reply to a warranty company will void an future claims
If you have a
complaint, and you have exhausted all resources with the builder:
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File written
complaints with the builder via certified mail.
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Talk to your
neighbors and homeowners from your builders other developments to
share you experiences. Share each others resources and encourage
others to file complaints.
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File any
complaints in writing with the local building authority, warranty
companies, Attorney General's Office, Better Business Bureau, Home
Builders Association, Department of Natural Resources,
Environmental Protection Agency, Federal Trade Commission, HUD/VA,
politicians, and local media.
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Remember, the
Better Business Bureau is not a government organization. It is a
private organization funded by its member companies. Filing a
complaint with the BBB may seem useless but is a necessary
formality as government organizations reference their files.
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Contact the
Department of Natural Resources or the Environmental Protection
Agency if you have drainage or erosion issues. The builder must
use “best practices” to prevent soil from eroding into creeks,
streams, and sewers. Violation can result in hefty fines from the
state. Most builders will act quickly to prevent this.
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Write to local
papers, television and radio stations. Most television consumer
spots want a story they can quickly and easily write a happy
ending to. Emphasize the facts of your case, and don't be
disheartened if it doesn't turn out as you'd hoped.
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If you submit a
complaint to any online consumer sites, keep a print copy of it
for your records.
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Hire your own
experts. An inspector or engineer can write a report on your home
defects which can be more accurate and complete than the claims
made by those representing the builder/warranty company's side.
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Take advantage
of any repair companies “free estimates” to document cost and
extent of repairs needed on your new home.
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If you have an
FHA loan, file your complaint with HUD because they can discipline
builders, warranty companies, and lenders for things like not
providing or honoring a warranty, attempts to force arbitration,
fraud, etc.
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HUD and VA share
some things but are separate agencies. Form 92544 should be in
your closing papers and is in regards to the builder's required
one year warranty. FHA/HUD does not let the builder waive the one
yr warranty on new construction that is financed for 90% or more
of the price of the home. Sometimes builders try to tell you the
only warranty you have is the 10 yr structural warranty policy
such as those from Home Buyers Warranty, Residential Warranty
Corporation. They know they're required to provide and honor the
builder's one year warranty but they hope that you won't find out.
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Avoid binding arbitration at all
costs!
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IF YOU ARE SUED
FOR COMPLAINING:
Squelching a customer's complaints is the purpose. Some builders
sue complaining home owners, or counter-sue them if a suit is
filed on the builder...this is generally an intimidation tactic,
to get the home owner to give up.
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DON'T GIVE UP!
Builders and warranty companies use a very effective tool called
the "Wearing down process" to get you to give up.
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