Buying a New Home

What are the pros and cons of buying a brand new home?

What a joy it would be to own a home that required little, if any, maintenance for 5 or 10 years. This is a major attraction of buying a new home. There's no need to fuss with remodeling and repairing. You simply move in and enjoy. That is, unless you have the misfortune of buying a lemon.

Several years ago, a couple bought a new home in a small development in Marin County, Calif. They thought they'd lucked into the home of their dreams until one house after another in the project developed similar problems. First, the windows and skylights leaked. Then, the drainage systems failed. Finally, water seeped through some exterior walls. The only recourse was to sue the builder. He, however, had fallen into financial hard times soon after building the development.

New homes are usually built with approval of the local building department. This involves a building permit application process including such requirements as a soils report, architectural plans and structural calculations.

Licensed professionals - soils engineer, architect, and contractor - are involved in creating a new home project, which is inspected by city building inspectors during the course of construction. At the end of the project, a certificate of occupancy is issued.

You might expect that with all this planning and scrutiny, new homes would be perfect. But, just because a home is new and built with permits doesn't mean that it was properly built, or that it's free of defects. Sometimes builders make mistakes. City inspectors aren't infallible either, and they are usually immune from liability.

Many homes built after the Oakland Hills firestorm in 1991 developed costly dry-rot problems within several years after they were completed. The culprit in most cases was lack of adequate ventilation. City building inspectors had inspected and approved all the homes during construction.

HOUSE HUNTING TIP:
Don't assume that because a city inspector looked at the property during construction that you don't need to have it inspected. You should include an inspection contingency in your purchase agreement, regardless of the home's age.

It's best to have a new home inspected by a home inspector who has experience inspecting new homes. You may want to have an engineer evaluate the soils report, plans and structural calculations for you.

In addition to inspecting the structure, make sure that you investigate the builder's reputation. You want to buy from a builder who values his good reputation and will promptly take care of any construction-related problems that might surface in the first year or so of ownership.

Ask the builder for a list of homes or developments that he has built in recent years. Visit these. How do they look? Speak to some of the homeowners to find out how satisfied they are with his product. Be sure to ask how the builder responded to requests to take care of problems.

Ask the builder to give you a written warranty, which states that he will repair construction defects that develop within your first year or so of ownership. Some builders won't do this. Also, the law is not always clear about what a builder's responsibilities are to you. Consult with a knowledgeable real estate attorney if you have any questions about a builder's responsibilities.

Older homes need updating, they often aren't energy efficient, and they may be poorly designed. Renovating is expensive and time-consuming. But, a benefit of buying an older home is that it has stood the test of time.

THE CLOSING:
You should exercise diligent care in buying a new home.