The economy isn’t in great shape…that’s no breaking news story. Times are tough for many people these days. Home-builders certainly haven’t been immune to the current state of the economy and many have suffered as a result. These days, it isn’t unusual to learn of a home-builder that has had to simply walk away from their projects…and some of those projects are not yet complete; the builder simply ran out of cash and left some other party holding a proverbial Bag of Goods. When a builder abandons an unfinished house, there is often a bank involved and the bank ends up owning the property. Then, the home is left to sit in that

Is That House Really Brand New?

incomplete condition for some time…often, for a very long period of time…while the bank tries to figure out what to do with the property. And this…interruption…in the construction cycle can be the cause of significant issues that could manifest themselves at a later time. These types of issues should be understood by any potential buyer.

Why would there be any resulting issues? The home looks fine, you say…the carpet is new, the appliances are shiny and new, and there is some nice landscaping installed. The home, from a cosmetic perspective, looks to be in terrific shape. So, how would you know if the home wasn’t completed in a timely manner? As the owner of a Raleigh Home Inspection firm, I sometimes make discoveries during a Home Inspection that are indicative of just such issues. Lately, we are being hired more and more routinely by banks that have come to posses these distressed or foreclosed properties. The banks have turned to us to give them some perspective regarding the condition of the house and about just what it will take to complete the construction and ready the home for marketing and eventual sale. Sometimes the bank contracts directly with a General Contractor to complete the construction. Other times, the property is sold, as it is, to another builder who then completes the construction.  

The fact is, though, that there can be serious results and repercussions of a home having been started and then abandoned for some period of time. And much of the degree of potential ramifications has to do more with what stage of completion the home was in when it was abandoned. The biggest risk is when a house that has been framed but has been allowed to sit exposed to the elements for any extended period. Typically, a house is framed (the basic wall, floor, and roof structures are constructed) and then dried in…that is to say that exterior walls are covered with a house-wrap material and the roof surface is protected by asphalt-impregnated roofing paper. If the home is allowed to sit exposed without having been dried-in, then wood framing members quickly begin to bow and warp which can lead to an array of issues later. Metal components not usually exposed to the weather can begin to rust prematurely. When dried-in, the house is not completely weather-tight, but is in a generally protected condition during the installation of the finish roof covering (shingles, metal, etc.) and finish wall cladding (siding, brick veneer, etc.). The types of materials used to dry-in a house are not intended for long-term exposure to the elements; they typically have an unprotected useful life of anywhere from 30 days to 90 days and will quickly deteriorate from exposure to wind, rain, snow, and the suns ultraviolet rays if left exposed. If the house sat in a dried-in condition for an extended period, the ultimate effects are similar to the home not having been dried-in at all.

Another thing that we often discover is that the age of installed equipment, e.g. air conditioning and heating systems is not commensurate with the age of the completed home. We sometimes find that the equipment is significantly older than the completed home…in some cases, 2 and 3 years older. While the equipment may be properly installed and providing its function, the equipment is not “new” and has already begun the journey down its own path to ultimate failure. Generally, one would expect to receive new equipment with that new home…yes?

So…what can a home-buyer do to assist in making sure that they know all there is to know about the history of the construction and finishing of the home? Here are some specific things that you might want to implement into your due diligence plan to assist in controlling your risk:

• Ask specific questions…allot of specific questions…of the builder/sellers – Ask them when the house received its building permit from the Authority Having Jurisdiction, when the house received its Certificate of Occupancy, and whether or not the builder was the only construction principle involved in the process. Most builders understand the importance of full disclosure and of the potential legal ramifications of any pertinent non-disclosure regarding their finished product and will offer up any needed disclosure. Bit it never hurts to ask and you should expect to receive straight-forward answers.
• Determine the financial condition of your builder to ensure their ability to service the home during the warranty period; ask the builder to provide their warranty details in writing. You should convince yourself that the builder is willing and able to provide standard and customary, as well as any contractually obliged, customer service after the sale and for any prescribed period.
• Seek representation from a professional and qualified real estate agent – they are trained to know the process and to assist you with your due diligence. Many professional agents hold advanced designations e.g. the GREEN designation of the National Association of Realtors (NAR) and the Certified New Home Sales Professional (CSP) designation of the National Association of Home Builders (NAHB). Realtors with such advanced designations have demonstrated a higher level of understanding about new homes and the basics of construction.
• Do your own due diligence concerning the construction process – Contact the Inspections Department of your local municipality and ask to review the construction permits and related documentation. Those are generally a part of the Public Record and can identify areas of concern.
• Make sure that you’re aware of all previous owners – A thorough tile search, most often conducted by your Closing Attorney or Title Company, can readily discover any unusual ownership trail.
• Last but not at all least, have the home thoroughly assessed by a professional Home Inspector – Home Inspectors are trained to recognize visible conditions that may indicate potential issues. Make sure your Home Inspector is a certified inspector Member of a leading Home Inspector association such as the American Society of Home Inspectors (ASHI). While a Home Inspection shouldn’t ever be considered as any type of guarantee or warranty, it can be considered an integral component of your due diligence plan. As a Raleigh Home Inspector, I often tell people that what Home Inspectors are paid to do…is to be suspicious even when there is nothing to be suspicious about. That nature of groundless suspicion is often exceptionally beneficial to a home-buyer…even when the construction time-line was normal. Actively seek out a professional Home Inspection and make sure you will ultimately receive a good Home Inspection report; visit my EzineArticles expert author bio page where I previously shared a bit of insight regarding some things that make for a good Home Inspection report.

I have never met a builder who intentionally sets out, or intends, to create an inferior product. However, circumstances, any number of circumstances including a builder being unable to complete a project, can lead to a finished home that may not stand up to the test of time. Houses are intended to be started, then completed in a reasonable period of time, and then occupied. When that series of events is interrupted, things can go…awry. Things can go wrong! Things can go…badly! Do your due diligence, control your risk to every extent possible, and be just as informed and educated as you can be regarding the house that you are purchasing. If you do, you’ll stand a much better chance of avoiding the purchase of someone else’s Bag of Goods…and more readily transform that house into your very own happy home.

Willette Yarborough
Hope Mills, NC

We Thank Willette for her comments…….

Clear, concise, and effective communication between a Home Inspector and their client is of the utmost importance. There are never any silly questions and all Home Inspection findings should be communicated using “plain ole’ language”……That’s our story, anyway……and we’re stickin’ to it!

New NC Home Has Damaged AC Unit

This air conditioning unit was observed during a Home Inspection on a new home… it looks like it fell out of the back of the delivery truck (and probably did!)…. Would you want this piece of equipment as part of your new home?