New Home Buyer's Have Rights :

AB452 gives new home buyers the right to inspect!

More Inspectors For Newly Built Homes Making The Rounds
Broderick Perkins, Realty Times Columnist

The home inspection industry is gearing up with guidelines for a new breed of home inspector who inspects new homes as they are being built.

Unfortunately, few new home buyers will benefit because the vast majority of new homes are constructed by builders who don't give buyers the option for a professional once-over before the home is complete.

Some home builders even refuse to talk about the issue.

Inspecting new homes under construction using "progress," "phase" or "stage" inspections could help ferret out defects that might otherwise become hidden and latent in completed construction, only to reveal themselves years down the road.

Phase inspections are conducted not when the home is completed -- as is the case with most existing or resale home inspections -- but during critical stages or phases during construction -- points when the foundation, flooring, framing, wiring and plumbing, drywall, roofing and final coverings (stucco, siding, etc.) are completed, as well as when the home is completed.

Hiring such a professional to be on site, depending upon how often he or she conducts inspections, could cost hundreds, even $1,000 more than the typical several hundred dollars it costs to hire an inspector to scrutinize an existing home, but the pay off could save tens of thousands of dollars.

"We do those types of inspections here in St. Louis," said Don Norman, president elect of the American Society of Home Inspectors (ASHI).

"I found some fairly significant defects last fall and in the worst case scenario, the roof trusses could have sagged and failed. You couldn't see that if the drywall was in place," Norman said, naming Jones Co., McBride and Sons and Hayden Homes among clients who allowed buyers to hire him for phase inspections.

The work performed by Norman and a growing number of other inspectors is virtually the same as the inspections conducted by municipal building officials, but the booming new home construction industry mass produces so many new homes, local building inspectors can't always keep up with the demand.

"Housewrecked," a Consumer Reports investigation into new home defects, published in its January 2004 edition, said the shortage of government building inspectors is but one reason as many as 15 percent of all new homes sold have a serious defect.

The defects include faulty foundations, serious moisture intrusion and shoddy framing all manifested as cracks, rotting, and inoperable windows and doors -- too often not showing up until long after the buyer has signed on the dotted line, Consumer Reports found.

The National Association of Home Builders chided the report as a "deeply flawed thesis" with "preconceived notions" and said the report was devoid of news of new home consumer satisfaction surveys.

Yet some builders are themselves hiring third-party building inspectors to produce a better quality home and some do allow buyers to bring in inspectors during construction, according to David Jaffe, the National Association of Home Builder's vice president of construction liability.

The home builders' association says it has been working closely with ASHI to partner on inspection standards for new homes and the California Real Estate Inspectors Association (CREIA) is encouraging all new home buyers to hire an inspector with a special designation -- CREIA New Construction Specialist-CNCS. The designation comes with training based on a thorough knowledge of International Code Council building codes, model building codes for the nation designed to produce sound, safe and quality construction.

"I'm a big believer in having the private sector perform inspections on new homes during construction. Every house we build is inspected by a private company at 10 different stages," said Mick Pattinson, owner of Barrat American, Inc., a Carlsbad, CA home builder that cranks out about 700 new homes a year.

Pattinson said the extra inspections are designed to protect the builder and to make sure the home meets or exceeds applicable building codes and standards.

"The 1980s and 1990s left us to realize city inspections were not worth the paper they were written on. We are dealing with a failed system and ultimately the consumer pays. So what the building industry is doing today is what amounts to a form of double duty pay. We still have to allow city inspectors to come and inspect," said Pattinson, also former president of the California Building Industry Association.

But, as with most builders, the buck stops there.

"I'm in favor of private inspections during construction. I'm not saying that should be driven by the customers because they don't own the property until it closes escrow. It should be driven by the builder," Pattinson said.

"We do have some home buyers bring inspectors in at the walk-through, but to be honest, I have not had a scenario where a buyer says they want to hire an inspector. I'm not sure we'd have a problem with it, but what is more important is that what we do allows builders to choose between private and public building inspectors," he added.

Why should it matter who brings in the private inspector?

Citing liability concerns, proprietorship, logistics, work flow concerns and other reasons, builders say it's their job, not the buyer's, to bring quality homes to market.

"God knows what they are afraid of. The buyer is going to have a lot better shot at getting something that's not a problem and the builder gets another set of eyes that protects him from a lawsuit or class action down the road. The smart ones figured it out and are allowing it in Sacramento County and in Los Angeles," said San Mateo, CA-based Jerry McCarthy, a construction consultant and spokesman for CREIA.

Then, say new home consumer advocates, there aren't many smart home builders.

When it comes to the vast majority of new homes built in the nation, new home inspectors are either hired by the builder or brought in by the new home buyer only after the home is complete. Single-site custom home buyers and buyers purchasing homes in small developments stand the best chance of sending a home inspector to the building site before their home is complete.

"We've seen no additional willingness among builders about private inspectors. The concept sounds great, then the big giant production builders tell you you can't do it," said Alan Fields, co-author of Your New House (Windsor Peak Press, $14.95).

"You have a consumer perception issue here more than what the inspectors can or can't do. If consumers decide they were going to insist on inspections and home builders felt sales were slipping because of that contract clause, they would immediately drop it," Fields added.

In California, a little known and relatively ineffectual amendment to the state's Business and Professions Code gives home buying consumers only the right to negotiate bringing in an inspector. In many cases new home contracts expressly prohibit phase inspections or any inspection before the buyer signs on the dotted line.

"To give you an example of why the builders' contracts here are to be feared and avoided, one of the clauses often found is that the buyer has no right to inspect the new home being built," said Mary Pope Handy, with Intero Real Estate Services in Los Gatos, CA.

"To me that is just plain scary. I always, always tell my buyers to inspect," she added.

Over a period of two weeks, several calls, each to the nation's largest home builders, were either unanswered or answered with builders refusing to comment.

Bloomfield Hills, MI-based Pulte Homes, which has won several national customer satisfaction awards, and Arlington, TX-based Milburn Homes (D. R. Horton) never returned calls.

Gail Goodman at Dallas, TX-based Centex Homes simply said "Sorry we couldn't help."

"We are not interested in participating in this story," said Phillip G. Creek, CFO and senior VP of M/I Homes in Columbus, OH.

At Indianapolis, IN-based C. P. Morgan Homes, Scott Bowers initially refused comment stating "I don't want to get into this issue. We are selective in what we talk about. It's a question that has never been asked. It is not an issue that has ever come up. I don't know if we have a policy."

Later, however, he recanted.

"Our buyers have the ability to bring one in if they so choose. We don't restrict them, but what happens is, most of the time, if a buyer does bring in an inspector, it is generally near the end of the construction. But it is a policy that we address code issues, but not preference issues," Bowers said.