Over the years I have noticed tricks builders play with their clients when it comes time to get inspections. For example, they will call at 4:55pm and say they forgot that the schedule had changed and are sorry for the mix up but if the client wants that inspection they were considering they need to have it the next day between 9 and 11am. Or they will apologetically call and say there was a snafu and the inspection needs to be postponed one day after having been scheduled for a week. There are many such tricks. When people call me to order new construction inspections I warn them about some of the games and they never believe me!
A recent thing I have noticed regards the various requirements they are placing on the home inspectors themselves. And each builder has their own criteria. Certain affiliations, certain licenses, certain insurances and so forth. One builder wants this combination, the other wants that combination.
I ran into a new one the other day.
This was new construction and the final inspection. It had been quickly arranged. I have already done two inspections this year on this builder's homes and had sent them my license and E&O insurance policy.
Virginia requires me to carry $500K in E&O. I carry $1mil. I carry that much because it isn't much more expensive and, I have found over the years, that builders require that much.
There was a new twist this time - the builder wanted to be stipulated on the policy as a "Certificate Holder." Why I don't know - it's my policy. But I had it done.
Getting to the property I was required to stop in at the sales office for the key. When I went in the lady there apologized because they "forgot" to have me send them a copy of my "General Liability Insurance, for $2million." This is the "new corporate requirement of home inspectors." It had "slipped her mind" to ask in advance. I asked and they don't require this of appraisers or termite guys.
WHAT BOTHERED ME WAS THE LOOK I HER EYES. IT WAS A GOTCHA MOMENT. I READ PEOPLE VERY WELL, AND THAT'S EXACTLY WHAT WAS GOING ON.
Called an "umbrella policy," I don't know if most home inspectors carry this. It is not required by my state. BUT I HAVE ONE, AND FOR $2MIL BECAUSE MY AGENT TOLD ME TO GET IT. It costs just under $400/year and covers me no matter what I do.
Years ago I was burned by a builder who demanded to see my insurances before he would allow me on site. I asked why they didn't ask for it in advance of the inspection and they claimed they "forgot." The inspection never happened. Who carries their insurance with them? Well, I only get burned once. For that reason I carry a copy of all my insurance policies in my car.
I smoothly said, "No problem! I have a copy of it in my car!" and pleasantly walked out to get it. Bond, Jay Bond... not shaken OR stirred.
SHE WAS CLEARLY TAKEN ABACK. IT WAS PRICELESS. I GOTCHA!
The inspection did not go as smoothly. I went back twice!
I contacted Lenn, who has been around the block once or twice, about this new trend I am sensing. The trend - to make it so difficult for home inspectors by having them carry so many different "umbrellas" that they can't get on site. I think she agrees with me. She said the obvious, that this needs to be handled up front and in the contract by the real estate agents - exactly what the builder requires of the home inspector and when. No games, no gimmicks.
But, she pointed out, many people do not have agents! This might be the wake up call. Before you buy, get an agent AND a home inspector.
My recommendation: builders can require anything of anybody they allow on site. I think they will begin piling on more and more requirements. It could be this or that combination of licenses and insurances, amounts of insurances, you name it. But once those requirements are known up front and written into the contract, you can't get burned.
Jay Markanich Real Estate Inspections, LLC 
Based in Bristow, serving all of Northern Virginia
Jay: This nonsense is just unbelievable! I don't sell much in new construction - in fact we haven't a whole lot in the last few years in my area, but am bookmarking this site for any future clients. Suggest.
Interesting Jay who knows people may want to see our pocket card to assure we are agents.
Good morning, Jay. We are licensed here in TN and the State does a good job of keeping track who has their insurance up to date and maintains their CEU's. I used to do what you do but there is no need anymore...
Having it in your car is PRICELESS! I suspect the "agent" was a paid employee of the builder. I can't imagine a licensed sales agent being this thoughtless
Anne - it is believable! The home inspection is a voluntary thing - appraisals, termite, etc are not. So they can get you!
James - I suspect they like agents just as much as they do home inspectors, but they recognize that agents are a necessary evil. The inspector is not!
Michael - what the state requires is irrelevant to the builders here. Do you carry $2mil in general liability? That is not required by the state here, but what if the builders move to $5mil?
Wallace - of course she works for the builder! And she was not thoughtless... this was a trap. Yes I carry that stuff! I only get burned once.
Hi Jay,
I had a gotcha moment as well. When the builder asked for a 1 million dollar policy I had it. All he said was most inspectors don't have that much coverage.
But I did have the company send an "ACCORD" form to him.
Crazy. Even the builder didn't have that much coverage.
Clint Mckie
Jay- I haven't seen anything like this in our area, yet. But I'm sure it's coming I'll pass the word, I appreciate your post.
Let's say it better. Before visiting any new home builder, engage the services of a real estate agent with new home sales experience who will advise the buyer about home inspections BEFORE the contract is written by the builder, WHICH IT WILL BE.
For the record, those same builders that manipulate the "requirements" for home inspectors, do not always welcome buyer's agents either.
When you consider the number of new homes sold and the small percentage of buyers who
1. Have experienced agents working with them.
and
2. Have a home inspection on that new home.
It's no wonder there are numerous consumer complaints about builders. Maryland formed an entirely new licensing category for home builders and a complaint procedure for consumers in the AG office.
Jay, I also own an electrical contracting company and a lot of my bigger clients require a certificate of insurance and to be included as an "also insured" on the policy. Games, it's all about games. I don't know how many builders have explained to me how they beat the inspection system. Sad, sad, sad. Thanks for posting!!
I agree with the comments about having the home inspection in the contract. During the negotiations, if the builder has certain insurance requirements, affiliations or other issues, it can be inserted into the contract.
Clint - the difference between $550K and $1mil on my E&O insurance is about $200/year. So why not carry it? I do inspections on homes worth much more than that. But the builders are coming up with their own criteria, which I think is intentionally biased toward inspectors.
Adrian - it is the national builders who are doing this. The local guys, or custom builders, do not, at least not yet.
Lenn - you make a lot of sense! Experience is the key. It is the experienced broker and agent that experience fewer of the gotcha moments. I bet that complaint department will soon come here to VA. To you this all seems obvious, but to the less experienced, especially with less experience dealing with builders, it apparently is not.
Mike - my agent told me NOT to include them on the also insured things because then I would become liable for what they did! He would only do the certificate holder at the bottom, which liables me for nothing they have done. And you are right about the inspections - how did the builder get away with not uncovering those smoke detectors in my previous post?
Exactly Marc. That way there is no suprise moment later. When you are changing the rules on the fly it is easy to counteract certain things, like a home inspection!
Thanks so much for the suggestion. I have a home inspector whom I rely on the most... I am placing a call to him so that he is aware (if not already) of these gimmicks.
I don't really understand why they would want to make it so difficult. Are people who want an inspection actually giving up because the builders are making it so difficult? Most of the work is subbed out so if there is a problem don't they just call the sub contractor?
I agree with Lenn....an experienced agent in new construction won't "assume" the builder has it all covered....and will know the inspectors knowledgable and covered with insurance from heel to head.
I think I would have a copy on my iPAD as a back up plan at all times. Good heads up post.
Thanks for posting this information. It's demoralizing that people are so underhanded.
Or, to put it into plain old simple words, these builders don't want you inspecting their product!
Excellent information, Jay! Main take away is go to the builders with YOUR own agent and make sure you have a home inspection at all stages of construction. A buyer deserves their own representation in these situations!
I'm glad we don't behave that way in Georgia. Never ever had a problem getting any inspector on site. Hope it doesn't work it's way here.
Good For You Jay! Savvy move to be prepared. We don['t have time to play games, and builders know that. Certainly the Building Dept. inspectors don't get the run around.
Does this mean that the builders cut corners and dont want an inspector to point all of this out? I dont sell many new homes now so it seems strange.
Jay, it appears builders will do anything to deter a home inspection. What are they afraid of?
Jay...
Are these requirements listed the sales contract signed by the buyer? If not, these buiders just might find themselves on the wrong end of a jury.
I have worked with different types of developers and found one that set the bar high for his staff, product and city he worked in. Everything this guy does is done well and all that work for him know this...It is buyer heaven if he is the builder you bought from. Does his own inspections too meaning that your inspector can take a nap because his product is near perfect....These builders are out there, and a good agent will know where and how to find them..I enjoyed this post thank you Jay
Jay, thanks for making us aware that this can happen and giving us the antidote for the problem. I'll be sure to inquire before contract signing for future sales of new construction.
Jay,I don't do much with new construction, but also not surprised that the builder and their agent would resent anyone checking their work, especially when they try to just cut corners. Being armed will allow you to battle the seller's/buyers'/not agent.
Many years ago after moving to Quebec I was confronted by a bureaucrat with the same 'gotcha' nonsense. He said I had to prove I worked in construction for the past 5 years. Tax records were the only acceptable documentation.
My answer was just like yours. As I placed a bankers box of tax records (ten years) on his desk I said "What's French for 'knock yourself out'". (If was only by chance I had them in the vehicle, but I enjoyed that moment.)
I am glad youhad your copy. They were looking to delay the inspection. GOOD builders don't need to use these tatics. If you build it right, you don't have to worry about inspections, just like, if you always tell the truth, you don't have to remember what story you told.
Jay, that insanity has not made it to the West Coast yet that I have seen---don't builders want sell their houses? Why would they put obstacles in the way? Do they really want to wait till the end of the warranty period to get hit with the list of things to fix? Oh yeah---I forgot---they will be out of business by then.
Jay, I so agree with new construction the Buyer needs their own agent and Inspector. Makes everything independent on their side.
Jay,
So far I have not seen that problem in my area. For the most part the builders that I am working with talk with me. If I find an issues we have a conversation about what I see. So far it has been good for all sides.
I even had one builder call me after an inspection to go over my report to ensure that he was meeting my expectations. This is rare but it does happen.
I can't believe they expect you to thoroughly inspect anything in just two hours time. It also sounds like they are up to something and don't want anybody finding out... structurally speaking.
I've never heard of anything like that here! Makes no sense why builders would make it so difficult - especially if they expect agents to keep selling their listings. I just don't understand why anyone would buya home with their on agent and home inspector.
Wow I have never come across this before! So are they doing this to slow down the inspection so they miss deadline with the hopes that the buyer will buy anyway??
Jay, it seems the builders are somehow related to underwriters, lol. Please enlighten me as to why builders would make things so difficult for you. You would think they would want the process to go smoothly.
Had a seller today tell me about a home inspection on her last home in southern Maine. The rotten door ledges, window sills and crooked doors did not ring bells. But the inspector wanted an extra foot added to the stem of the well head, a different GFI in the bathroom and it left her stratching her head.
Wow! That is just unbeliveable. We have worked with many builders here and, so far, have not come across this issue.
Jay, this definitely sounds like a fishy practice! If they aren't cutting corners and doing things right, there should be no reason to play these games. If I were a buyer, I definitely would think twice about buying a home with builders that play games like this.
crazy shinanaganns! Kudos for you to being overly prepared & able to give her a "got'cha" :)
Great post that every agent needs to know. I've seen far too many issues with new builders in my area. They do play games, they don't like buyer's agents, and they will do everything they can to convince buyers to forego a home inspection. My favorite line they tell buyers is something like this: "You don't need a home inspection, you have the 10-year warranty on new construction." To address the 10-year warranty statement is beyond this comment. The worst part is the homebuyer is the one who gets taken advantage of what they don't know.
Only substandard builders would want to keep the inspectors at bay. Their actions speak for themselves.
Really good post Jay. All HI's should carry a copy of their policies (insurance) with them. At any point they may be asked for proof of insurance. In most cases a simple letter from the agent giving the amount and type of coverage, signed and dated of course. Even clients ask for this stuff.
I also carry a portfolio with me that contains all of my education and updated CE's just in case they really get sticky.
Your experience is another reason why buyers NEED to have a realtor represent them when buying a new build. And an outside appraiser and inspector, not the builder's people. Too much temptation for funny business to occur.
During tough economic times, everybody gets more creative in generating revenue or sidestepping the rules. This applies not only to the business community but the government as well.
Sorry to hear of your experience. There is much sleaze out there.
It seems like they are hiding something. As stated several times above, if they are doing things right and not cutting corners, they wouldn't be pulling these kinds of tricks.
There are lots of them Ellie. It's best to be prepared!
Wrenches Jeremy, they perceive home inspectors as wrenches in the machinery.
S&D - and plan in advance to cover the builder's requirements for entry of different industries!
Cheryl - then it's all as secure and sound as your battery!
Colleen - they think they are being out in front of things, and not underhanded! I agree with you.
Gabe - I had a builder once say to a buyer that I wasn't necessary, and in fact a placebo.
D&D - the inspector is the only objective person in the process!
Tammy - this particular builder is a national one. The problems I have are with the bigger builders.
Allison - those guys get anything they want, but my inspections are much more thorough.
Chuck - did you see my last two posts?
Michael - they are afraid of the unknown. And perhaps have had a few bad experiences with home inspectors!
Don't know Richard! I expect it is in the fine print somewhere. As to the entry requirements to get on site, they can claim that changed that very morning. Terrorists or something, you know.
Richie - there is a builder like that here too, but a custom guy. However, having an objective set of eyes is irreplaceable. Nobody can do their own inspections wisely.
Leah - the key word is "before!"
That's my point of view too Ed. I am not trying to catch them in wrong stuff, just pointing out what could be done to code or best practice. Those columns the other day weren't to code!
Robert - it's odd that only they can decide what is "adequate" proof and documentation!
All together in one envelope in my glove compartment Jim! It's easy when they are together.
Charlie - this is a national builder with a national reputation. It could be that their "corporate policy" is just this neighborhood though! I don't understand the games or the obstacles. Or the supervisors who take things personally. And sometimes they do get hit with a big list of things to do!
Gary - I've been doing them for many years and it is amazing the things I come up with. And I am not an alarmist by any means. When an engineer asks to put some of my photos on his website, it says a lot!
Don - that would be a rarity here! I don't have any expectations really, just looking for code and/or best practice. Schmuck work is schmuck work, period.
D&B - the inspection takes as long as the inspection takes! If they ask for an appliance guy to figure out a problem, I get they don't jam him into a specific time window. And I am looking at thousands of things.
Susan - it's best not to be shaken or stirred!
Sherri - obviously people do, buying the line that the builder's many inspections, along with the County, will protect them.
Rosalie - so if the buyer moves in and there is a serious problem that would have been caught by a home inspector, they won't fix it then? Hmmm... it doesn't make sense to me either.
Ray - this is a national builder too. I don't know why the fun and games, but they go on!
Can't speak to that Andrew! I would have to be there and see that!
Mike - maybe one day! This is a booming area and maybe they don't want the inspector to slow things down!
Chanda - this seems to be the norm around here. I rarely run across a builder who plays nice!
Samantha - as a Scoutmaster I am always prepared!
Pamela - I've heard all that. Right in front of me once a builder's agent called me a placebo.
This is a national chain Cynthia! But the builders are only as good as the supervisors on site everyday, and the subs they use.
Wow, Jack! I have never had anyone ask me for proof of my CE classes! Know of any other insurances I should carry?
Steve - and I am objective! Nobody else in the process really is.
Anthony - no problem! This stuff has been going on for some time, and morphs all the time.
Tracy - even if they aren't hiding anything there is this air of enemy territory.
Yuck. Don't like under handed and dishonest people. We as agents must be diligent for our client's sake. Great post.
Thanks Paula. In my opinion the buyer is the process. Would that builders thought the same!
It does pay for clients to have their own Real Estate Agent. Thanks for the post...
I agree David, and their own home inspector!
Hi Jay, It should be the opposite. The builder should want you there and be at the ready to correct defects that you find. What a lousy builder. Note to self: keep a copy of insurance in glove box...check enjoy the 4th! jay
WOW that's scary . To put up that much of a hurdle / endurance makes you wonder what they don't want the inspector to find. I'm glad to read you were able to turn the table on her -- with your insurance policy in the car! LOL I've not experienced this, but I have experienced the new home builder will allow for a home inspection, but they don't want the agent present (written in their purchase contract). Another contracted stipulation is not allowing the agent to be present with the buyer during the final walk through. Very annoying!!
Jay - this builder claims to be one of the best in the country. Good note to self!
Carla - and I keep adding to that stash in the car with new policies! They have restrictions at every turn it seems.
The games people play. The builders apparently want everything to be smooth for them, but could not care about the person buying the home. I bet you just love it ehen you turned the tables on that woman.
The look in her eye was really something Jim. Like she had me or something. Boy, it was funny to just say I would be right back with what she asked for!
They definitely want everything to be smooth for them. Their contracts are very much all them and little buyer. Hence the need for a realtor.
Builders set the rules, including the particular contracts around here. Reading an agreement of sale the other day on a builder's contract was absolutely horrible. It was 100% pro builder and left the buyer open to all kinds of things. It is just not right.
New home buyers don't feel the need to get an inspection. I always advise a home inspection for all purchases even new construction because you just never know if there is a problem.
Erica - yes, and that is why a buyer really needs an agent in their corner to work with the contract up front!
Tammie - I hear that a lot and it is ashame. You don't know what you don't know. Best to find out what you can!
Jay - I wrote an article a year ago pointing out that, regardless of what builders say, "Many of them hate home inspectors." And having been a builder for 40 years, both with my own company and with a couple of large building companies, I know that statement to be true.
Many builders don't understand that a through home inspection can actually benefit them. It may reduce call-backs, making life easier for both customer and builder, and it helps protect the builder by discovering potentially large liabilities when they are still relatively small. But those who make the inspection difficult will never get it.
Oh, super. Another shady practice to look out for.
Gretchen
Jay, when there isn't any language in the contract allowing the buyer to have an inspection on new construction, we make them write it in. They bristle, but they do it because they don't want to lose the deal. I also arrange for the inspection ahead of the walk with the builder (provided power is on and appliances in). Builders do not like outside inspectors, but they save a lot of heartache down the road for both buyer and builder. Sorry you have having to go through this. I also am there when the inspector is and that stops some of the nonsense...
Sharon
Nice post Jay! I haven't seen this type of thing happen in CA (yet). Now I'll be on the look out!
John - they don't get it and certainly don't have the attitude you propose about reducing call backs and such. I think part of the problem is that it cuts into bonuses when I find stuff.
Gretchen - it's best to have the head's up and do what Lenn suggests above.
Sharon - again, what Lenn suggest above is very good. I am sure the bristling is visible!
Adam - I am finding this trend in the bigger, national builders. It may get to your door soon!
As a builder, I don't get it why others are afraid of inspectors. Well yes I do but that might be a great hint to agents and inspectors if you see certain builders giving you that type of run around, seek out builders who don't do that. They don't fear inspectors, questions or play games.
It kills me to see folks go after "the deal" instead of paying a bit more and getting "a house". Just for the record, please do send me your insurance certificate and if you have it in the car even better. Just don't give me the copy with coffee stains on it. My admin hates those.
Thanks Mike! Your post made me smile! Here it would be very hard to avoid this sort of thing. You have to go with the custom builders mostly, and that is a different market altogether. Usually I email my stuff to the builders, as I did in this case. They asked me for some more later, which was unexpected, but prepared for! My copies are in an envelope and no stains!
I have understood that much of the bonus comes from how much money is "saved" in each property, and how little follow-up work is required. So when I show up and find stuff that might be a big part of the reason! Follow the money...
Look at my post today. I bet you wouldn't do that, am I right?
I wonder how the inspection when. In situations where a builder would make it so difficult, I would not want to direct my clients to their product. A good product should not fear scrutiny.
Thanks,
Frank Castaldini
Not well Frank, with a couple of posts already about this house. I had to go back twice and the second time was met with confrontation.
Start with the 'sales person', in many states they do not have to be licensed. Some builders do not want inspections as the home is 'under warranty' for a year. Buyers of new homes think or it is insinuated it will cost more if they have representation. Some builders are great but things still happen.
Oh the sympathy I have for those that buy without representation and inspections...
I wasn't savvy enough to know that when I bought my home from a builder many years ago. Thank goodness they were a very reputable builder in our area, and the house didn't have any issues. But the quality level I see in some developments makes me know that it
I agree John. The warranty is only as good as the customer service department too. Not the best, sometimes.
Karen - good for you. But this builder is national and who knows, it may be "corporate policy" and it may not be.
I have to side with the posters that said they would make their buyers aware of the necessity to include inspection rights in the final agreement.
Suggestion to buyers: Think through all the extras ahead of time as much as possible. You that change your minds often will get hammered on change orders. When the package price is agreed to but before the contract is signed, bring up the requirement that it be put in the contract to allow a home inspection or inspections at the convenience of the buyer.
When the builder rep hits the roof, offer to have them discuss any concerns with your home inspector up front. Some of this policy of obstructing/impeding inspections may be based upon an isolated inspection or two by an inspector whose shoes were on too tight (usually a none too confident newbie that errs toward the impractical when unsure).
Question for Jay: Wouldn't you advise new construction customers to pay for at least two home inspections, perhaps, one just before drywall is up? I have noted that normally good building inspection departments in the metro area are not doing a very good job in the last few years. I think they are over worked with all the flip/rehabs going down. In my appraisal walk throughs, which are far less intrusive and deliberate than a home inspection, I have had to note hazardous/unsanitary items occasionally, on properties fully cleared by the city inspectors.
Example: Newly added bathroom with vent pipes leading to attic but not through the roof or tied into main vent stack! That was an FHA inspection (attic view required) or I never would have noted it. Also, a heat run was "faked" (octopus gravity system changed out to FA) to the newly created BR (3 season upper porch conversion).
That borrower needed a good home inspector in the loop. The city didn't protect the buyer, the appraiser did only because of luck & I'm guessing there was the possibility of discoverable issues remaining, outside the scope of my assignment.
I am totally in favor of a home inspection, results of which, please have client share with appraiser:)
Roger - thanks for the comment! I agree, the posters' suggestions have been good ones. I am not the code compliance officer, so I am not so interested in that in my inspections. I have no juice anyway. But I am interested in best practice, and shmuck work.
I have for years recommended, done and posted about pre-drywall inspections and the final just before closing. Of the two I don't know which is the most important! I like it when the house is skeletal and can see it all. HVAC is a frequent problem on pre-drywall inspections, often not visible after the drywall is up. And I have my pet peeves - drywall screws used everywhere and dryer vents through the roof. I have had many posts on both those things.
I am glad all builders in NH are not this way, i find myself working with mostly the same builders who over the tears have always built great homes and accomdated me as a Realtor and welcomed buyers inspections. It is importnat for a buyer to use an agent who is well experienced in new construction to represent them and assist them through each step of the new construction process.
That is the crux of a lot of the realtor comments on this post Scott! Perhaps you have a different builder culture there!
For sure Jim. I appreciate comments like that from realtors. And the ones about home inspections!
Would be leary about selling a home with a builder like that. If they are so afraid of the inspection results what shortcuts did they take. Thanks for the tip..
Jay, I just love that you had a copy on your vehicle with you. Priceless!
Keep looking out for the little guy, Jay Bond!
While I have not come across that issue, I am now planning to write a clause into the offer for new construction which specifies that any requirements the seller has of the inspector beyond state mandates shall be stated in writing in the contract or shall not be enforcable...
except, hummm, since they are not playing these games here, maybe it's not a good thing to give them ideas...? I have been consistantly impressed with the cooperative attitude of builders including taking care of a punch list after moving in (not things that came up in the inspection, but that come up during the first year of living in the home), and also when specified in the offer changing walls, adding doors, rolling appliances into the price, performing landscaping where requested... just going that extra yard to make the sale and make the client happy. That's the attitude I notice here.
Thanks!
It's hard to avoid builders like that here Bill. There are always short cuts though!
Jeremy - as a UVA guy to a Carolina guy, thanks! Keeping that stuff with me is a necessity!
Edy - good that your builder experience is a good one. But keep that clause in mind!
Jay, indeed. I might start carrying my copies around as well.
Oh, but I'm a NC State man myself. :)
In NC access is required per the contract - otherwise they may be in breach. If the property is not ready to be inspected then you can't close!
Just another good reason to have a licensed agent represent you on a home purchase,new or used. Builders here don't like inspection but have not thrown any curves yet. If the inspection is rescheduled then inspector her charge a $125 fee and that gets paid by the builder if it is their fault. We are lucky that our builders invite agents to help sell their homes. They want the homes sold and know that we bring pre-approved clients.
Jay - maybe it's a new trend in your area, but that's been around here in Arizona as long as I've lived here. The first home I built here was in 1998. When I told my builder I would be using a home inspector, they said they "don't allow them". Cracked me up. So, I called the various state boards and they all said that was ridiculous. So, I got it inspected - I ALWAYS recommend a home inspector on ANY home purchase. You should've seen the "punch list". One of the most glaring defects - the flashing on the roof was installed upside down!!!!
So, I'm sorry you're going through this, but it's not at all new - if the builders did quality work instead of "slap the home together as quickly as possible to get a sale done", I'm sure there would be no issue and they would welcome a certified home inspector.
Best of luck.
Shady dealings indeed. Good for you for beating them at their own game!
Wow Jay that is a shame that this is going on in your area. We don't have that here in our area thankfully! I am married to a Contractor and he has never worried about a home inspection. He welcomes them with a smile, but he also doesn't cut corners on his homes and is proud to show them to everyone.
builders were part of the problem last time around. They manipulated the market and were not questioned. I would refer them to the state licensing commission and consumer affairs.
Wow. It sounds like these builders do NOT want to sell their homes.
Wow! Good for you, Jay, for having your info readily available. Thinking there may be a good reason for the local or state association to 'check' into this.
Also, do you have a TV station that runs interference for consumers??? They may want to know about this.
Jay, my guess is that they have these crazy situations only for you because you have a reputation for not missing a single thing! I think if I were a new home builder, my goal would be to have a product that would pass muster with Jay Markanich.
Wow, this is eye opening; I hadn't heard of this before. I like the photo you chose with all of the umbrellas!
Gee, thanks! Another problem we're not having in our area YET that I can look forward to? Seriously, thanks for the heads-up.
A repuatable builder needs proof of insurance from the inspector and normally will let them do their inspection other builder's with shoddy construction give a hard time so the buyer beware.
Sorry Jeremy - I thought you were in Carolina. What is it? New Caledonia State?
Nogul - different strokes for different states!
Michelle - I only had to learn that lesson once. And it stuck!
Ric - good luck getting that extra fee here!
Well, I am in North Carolina. But you called yourself a UVA guy, which is about a university, and then said Carolina for me. So I naturally assumed you meant UNC to go along with your other university reference.
But seriously, I grew up around Raleigh, and much like inspectors to builders, UNC/Carolina is the enemy. :D
Jay,
I think you need a new inspection contingency form for the purchase contracts in your area to prevent this non-sense.
In Washington State, the first part of our 2 page inspection contingency reads as follows:
"This Agreement is conditioned on Buyer's subjective satisfaction with inspections of the Property and the improvements on the Property. Buyer's inspections may include, at Buyer's option and without limitation, the structural, mechanical and general condition of the improvements to the Property, compliance with building and zoning codes, an inspection of the Property for hazardous materials, a pest inspection, and a soils/stability inspection.
Buyer's Obligations. All inspections are to be (a) ordered by Buyer, (b) performed by inspectors of Buyer's choice, and (c) completed at Buyer's expense...... Buyer is solely responsible for interviewing and selecting all inspectors."
If a builder tried to pull that kind of non-sense with me or with my Buyer or home inspector, I would pull out the contract and read that information off to them and inform them that they have already agreed for this inspector to inspect anything he chooses for as long as he feels necessary. If you want to insist on some minimum standards of insurance for the inspector, than exactly what insurance they want to require should be written into their next purchase agreement. However, as stated before, you've already agreed for this inspector to inspect anything he chooses on the property. Thank you.
Juli - it's not new at all here either! But this was a new wrinkle - a different insurance, for an unusual amount and at the last minute. They already had my other stuff by email.
Tim - planning ahead! Expect the best, be prepared for the worst.
Laura - good deal! The custom guys are like that around here too.
1st Crown - they will get the boomerang in the head soon enough!
I have represented buyers that have bought new construction, and I recommend a third party inspection for them - just as I would for pre-owned homes.
What I suggest that home inpectors start doing is to call the builder and ask that they email or fax you any required documents such as insurance certificates, etc. to you that very same day. Get their email address and send the request in writing also, requesting a "read receipt". If you don't receive the documents by the next day, call to follow up. On the day before the inspection, if you still haven't received the documents, ask the buyer's agent if they can postpone the inspection and explain why it is necessary.
Inspectors - If you're doing an inspection for a buyer who is represented by an agent, always let the agent know as soon as you experience any problems with a builder. The sooner the agent knows, the better. I know I certainly wouldn't hesitate to call the builder. Another option might be to have a relationship with an attorney who could give them a call when they drag their feet.
I wouldn't recommend buying any home without a professional home inspector to do a thorough inspection of the property for you As a buyer, I would likely postpone closing, if at all possible - to make sure my interests were properly protected.
I think they do Roger, but on their terms!
Doreen - that is above my pay grade and purview! The builder can require whatever they want, but it should be up front. As to the TV station, probably, but I don't watch enought TV to know. I am affiliated with a local TV station too.
Thanks Pat, but I am not sure I am the issue! But who knows!
Jerimiah - I too have found missing connections on new construction. I bet the plumber was coming back just after lunch!
Patricia - all those policies! Are we looking at the future of possible liability?
Don't know Kate! Hopefully not!
George - there's no problem with that! They already had mine. This was a new twist at the last minute.
Jeremy - I am a UVA guy! As you know, I was tweaking you. But to UVA, anything in Carolina is still Carolina...
And your tweak worked well! As a lifelong NC State guy, I've naturally developed an inferiority complex. :D
So anything in Virginia, is Virigina Tech, right?
Not really. There's a reason they call it BLACKsburg...
Ha!
Mr. Jefferson started and designed a lot of UVA! Did he ever get down to Blacksburg? Not likely...
This is so funny. I had to change the above comment to Blacksburg. I even had the town wrong!
Very interesting story here. I've never heard of that in our area here, and I work mostly new construction. You'd think that if they play such games, it would only delay their closing. If the buyer had an issue down the road due to being forced to close without a home inspection, then there may be liability on the builder.
Yes, buyers are probably at a disadvantage if they walk into a builders' site and buy without an agent. Can't imagine why someone would do something like that.
I have not sold any new construction ... I feel like I am missing something here... What is the purpose for them delaying you?? If only by a day? What could possibly change in that day since they know it HAS to be done sooner or later.. right? You would think they would want to get the inspection done to get it sold????
Eugene - I think the builder's attitude is that there is a warranty, so that eliminates liability. And not much can delay their closings!
Ruthie - methinks they wish to prevent an inspection altogether! A delay in an inspection can create a closing without one!
Yeah, I wondered where the "Blackwater" comment came from. LOL!
Thank you for posting! These kinds of 'tricks' are all part of the games that unethical people often try to get away with, whether they are builders or even other agents unfortunately. They prey on unsuspecting and often uneducated buyers hoping to doubleside commissions or use their own people to ensure the inspection or report goes the way they'd like. Buyers really need their own representative who has no connection to the seller or the appraiser or the inspector or lender or anyone else involved so that they get completely unbiased results, recommendations and information. It's practice like this that breeds distrust in the industry and gives all builders, brokers and agents a bad reputation. Posting experiences like you just did here will help create awareness and expose some of these negative tricks of the trade.
GREAT information, Jay. Thx so much for sharing!
I wonder what they were hiding! That's enough to make you wary of everybody in that profession. Kind of like a bad REALTOR...just one can really mess up things for everybody.
Builders here just do not seem to play nice in the sandbox with others. Sometimes the "tricks" on inspections are real mistakes or scheduling problems. Alas, some are just games the builders play. The bottom line is that you have to hold the builders feet to the fire and stay on them. If they set an appointment and have to change it, remember that they still have to make it work for your client. In this day and age the builders need US... The builders need your BUYERS... We are no longer in the age where the builders refused to pay us or they had 100 buyers to replace your buyer. Use that power and PROTECT YOUR CLIENT.
Love your preparation and James Bond, "not shaken or stirred!" I'm going to remember that. I haven't heard of any shenanigans going on in my area, where new construction is outselling resales, but will watch out for this trend.
I sold a new home with a large builder 2 years ago, and the buyers opted not to do a home inspection until 11 months after moving in, so they can get everything at once when the 1yr service is performed. So far, I don't think any issues came about it. I'd say that is somewhat of a risk, as you never know if the builder will still be around 1yr from now... so you really need to get the inspection done before moving in.
If I'd have gone in to an inspection appointment like you did, and have someone say "I forgot" to tell me that I needed this, I'd stand there and make her feel like an idiot. Its like who made the mistake, so who's fault is it? Look at short sales. If a bank does something wrong, we often pay for it. They make a mistake in lost paperwork, the customer pays. Not a good thing.
Jeremy - shows you how much I really know.
Jacqueline - the idea behind all my blogs is to be instructive and increase awareness. Thank you.
You are welcome Rita! Stop by any time!
She might not be a realtor Monica. Don't know, but it is a disturbing thing.
Right Richard. I say to my clients that they pay the builder's salary! They should be the boss.
Laura - let's hope those shenanigans never arrive.
Thanks Eugene. Good thinking. I do a lot of one-year inspections for people also. It was odd to hear the word "forgot." I don't think that's true!
When they don't want you there, you know you're going to find something that they're trying to hide.
As the wife of a retired home builder, it makes me cranky to know there are so many corner-cutting builders out there giving the good guys a bad name.
We don't have much new construction - only new condo's or condo conversions where they take an old building and create lofts. I always get inspections for these although they usually, thank goodness, don't turn up much. Back in the 1990's after the Oakland fire, we had a lot of new construction. Many of these homes had major problems; improper flashing, no ventilation for sub areas, bad roofs, drainage issues etc. Most of the problems have been identified and corrected over the past 20 years but they usually aren't found until owners sell the house.
Jay - It is no secret these are difficult times for real estate professions, whether it is agents, inspectors, or anyone that is part of the transaction cycle. I have had to delay a couple of inspections in the last few years, simply because I didn't want the buyer spending hundreds on a home that a bank had decided to not close on. Usually these have been repos. But, I never waited until the 11th hour to do the reschedule, and I was always honest about the reason that required it.
I have no idea why this would be an issue for new construction!
I love your story. To be extra safe, I'd ask if there was anything else she forgot before revealing I had a copy in the car.
Hi,
Interesting story!
The good thing is that you're keeping one step ahead of them. They would need to have a new rule every time your scheduled to do an inspection to win. Good job!
Thank you for this thought provoking post. we dont see this in Massachusetts but I am sure it will head our way especially as new construction continues to increase again here. I have done alot of new construction and never ran into this issue. In Massachusetts we have a one year contractors warranty, is this common in other states?
Wow! I can't believe how much you had to go through. Fortunately, we don't have many problems with builders here. Most builders work well with agents and inspectors.
Marte - you would be REAL cranky around here!
Ann - this is the way of new construction! And the beat goes on...
Myrl - they are worried about finding things that cause delays, or perhaps their bonuses. Who knows!?
Richard - at this point she was probably afraid to ask!
Wandanna - that's where the realtor would come in, if at the beginning of the process!
It is here MaryBeth - and I do a lot of one-year inspections too. Builders can't impede those.
Carla - I am used to it, although not this new twist.
Way to go having the policy copy in the car. A "Gotcha" moment is always great. Congrats on that and the feature.
Thanks Karen. It's the moment I have been waiting for since putting them in there!
I love it when I can "gotcha" people. Always be prepared for the worst, but expect the best. I have seen many times where new construction has as many problems if not more than older house.
Dave Woodson
Local Internet Marketing for Small Businesses
Dave - I find new construction and flips to be the hardest things to inspect!
I've been a new construction specialist for years, and have never had this problem. If the builder is refusing a home inspector access to a property, when the contract specifically calls for a home inspection (and the buyer has the right to use the licensed inspector that they choose), then the builder is in direct violation, and in breach of contract. Have the buyer's agent put the builder on notice that they are in breach of contract by having their closing attorney call, and I believe you will see a difference.
Thank you Michelle! This was a quick sale of a property previously sold to another party who dropped out. This buyer had no agent. I don't know what the contract stipulated, but the builder knows me since I have done two other inspections on their properties this year.
Great signature!
Jay and Roger, You guys just raised my value to my Buyers. The Buyers may be in love with the model home and the neighborhood but it is also important that they are committing their future to a qualified builder. Placing the inspections in the contract will also give a prewarning to the Buyer and the Buyer's Agent. How co-operative is the Builder? How confident is he that his work will pass 2 inspection levels and....if he is nervous, arrogant, hard to work with, etc....it will show up at this point just as well as it will show up if he is confident his work will pass and he takes pride in producing an excellent product.
Very valuable comments. Pat
Braithwaite Realty
www.BraithwaiteRealty.us
770-265-9323
Jay , you or any other inspector can inspect my homes anytime you want . It seems Realtors like to generalize and lump all builders into the same mold . We give our homeowners & their professionals unlimited access to all our jobs . If they are having work done , then all we require is a copy of their insurance for our file , with minimum allowable coverage . If I'm doing something wrong & my jobsite foreman & local code official misses it , then I want to know so I can correct it on that job and for the future . I would then create a change to our " Best Practice Manual " so it doesn't happen again ! Keep up the good work !
Too funny, haven't seen that up here in NH. However, recently inspected a high end home and the builder was less than pleased I was there. I was told "my homes never need an inspection". Funny, finished basement and master bedroom were missing return lines from the two seprate furnaces. Oops. In addition the builder's furnace contractor never installed filters. This resulted in the attic furnace pulling in blown in insulation into the duct work. Oops.
There were more...
Steve
Glad to help Pat! These posts are intended to be instructive and a lot can be learned from the comments as well.
Ed - that's the attitude! I find that custom builders are very good, conscientious and don't mind at all my showing up. I understand the rules - insurance, hard hats, booties, whatever - and obey them. I am not so much interested in the code, as I have no authority or juice there, but am in best practice. That, however, is hard to keep up with!
Thank you Jay. This information surely helps everyone. It is just as important to have an inspection done on a new home, as any other home. You have provided such important information here I have reblogged it. Thank you again.
Ha! Great Stephen and famous last words! I find that new construction and flips present me with more problems than older homes! Just the other day a new home bedroom had drywall covering the HVAC register. Oh well...
And thank you Kathleen. I already did on your reblog! I find that new construction inspections, pre-drywall and final, are very important.
Jay builder like to put up road blocks when it come to having an outside inspection but if the inspection is addressed in the contract as you suggested there should be less hassle.
"the builder wanted to be stipulated on the policy as a "Certificate Holder." Why I don't know - it's my policy."
Anyone can get an insurance policy and cancel it the next day and still retain the certificate of insurance to show. It has been done - a lot! If the builder is named as the certificate holder the insurance company will notify all certificate holders of a policy cancellation. Yes, you own the policy, but they are entitled to notification of cancellation if you are using the certificate to gain access to a property they are responsible for until closing.
I can't really say I blame them for their stiff requirements. They don't know you. I've seen inspectors walk away and leave things turned on, such as the range burners - on high! Luckily I attend inspections, but other agents have reported doors being left unlocked, water left running, broken items, ect. As well, appraisers and termite inspectors are not conducting the type of invasive inspections that are required of home inspectors, so of course insurance requirements would not be the same.
Most companies make new rules & requirements based on past problems, so they will never be consistent - different companies, different bad experiences. Yes, it's a pain, but it might be a good idea if you, as the professional, call in advance and request they fax or email their requirements. It might be good to get to know some of the builders in your area. You might hear enough horror stories from them to begin to understand the other side. No offense intended here, but understanding the other side usually eliminates some of the frustration.
Wow! Good info...
Where in the country are you guys/gals finding "new" construction to sell? I thought that all went the way of the Dodo Bird... Here in the OC, we havent seen any new construction for years. What we have seen is "half-baked" projects the banks took over and buyers basically buying "as is", with NO seller concessions. Basically, they wont pay for anything!
One of the ways we've found to minimize the impact in the event a builder provides a "substandard" product is to require a solid home warranty. We all know if a builder wants to his his marginal work, it typically shows up well after the inspection and just before the lawyers get involved... Every property sold should have one, even if you need to pay for it, it's so worth it...
Hello Jay; I'd love to read the report. You said it did not go smoothly.
Thanks for the information, this has not happen top me. But I will keep a wacth for it.
Pat Ogle, CRS
www.AnnapolisHomes4You.com
410-224-0660
Hi Jay,
I'm sad to hear of your experience!
I am a listing agent and do a lot of new construction. I'd hate for you to think that the new construction industry lumps into that scenario.
All builders are different but in my experience if your dealing with one that isn't being "transparent" you are not only going to have problems up front but also after the closing when it comes to any warranties or customer service.
I encourage my builders to add inspection contingencies in the contract upfront. It makes the buyer feel safe and let them no we aren't trying to get away with anything. This can be the diference in making a sale over the competition in the first place.
Having said that, I hope that everyone understands that this may be new construciton but it's never perfect construction. We are human after all. Sometimes things need fixing plain and simple. You just want to be dealing with he builder that's willing to step up and take care of what needs taking care of. This is what creates happy buyers, a good reputation, referrals and inevitably a successful home builder.
Jennifer - I don't know what the contract said, but I had sent my other information to the builder a couple of days prior.
Kathy - from experience I know what they have been requiring. This was a new twist though.
Debra - I wouldn't characterize their requirements as stiff. I did an inspection for this same builder just a month ago and then they didn't require the certificate holder thing. I had that done a couple of days prior to the inspection anyway. But the last second thing was a bit much, and, I suspect, not a "corporate policy."
Home inspectors don't do anything invasive that I know of. And the builders will not allow me to go into anything, like the electric panel box. I am familiar with all that. Do inspectors make mistakes? Sure.
Bill - This area is booming primarily because of gubment employment. I would think that with the warranty the builder provides most people would not spring for an additional warranty. My problem with that is that if there is a problem, the people who get called are the ones who screwed it up in the first place.
Ken - the last three posts have been about this house. I could do a dozen more.
Wow, Jay! Great information - thanks very much for the "heads up" - and sharing.
Great info Jay! Appreciate your insight!
Thanks Pat. Glad to be informative!
Jae - I have had many dealings with this builder in the past. Their requirements were all met in advance. It was the at the door thing that was the problem! But the builders in this area, a fairly booming area because of gubment employment, all have their little games they play.
R&L - that's the name of the blog game - information! Thanks.
You are welcome too Randy. Stop by anytime!
Live and learn. I hope others take up your great habit & carry all their policies/forms with them to put a stop to this nonsense.
Lyn - doing so, or having to do so, is both funny and ridiculous.
Thanks for the insight
Thanks Fransisco. I don't know how much insight is in there, but I thought I'd share it!
My husband is a General Contractor and I am an real estate agent. He is required by his liability insurance company to be endorsed on everyone of his subcontractor's policy's as an additional insured. Its not something he demands, its what his insurance company demands. He is just as frustrated about it as you are, the ruled and regulations he must follow are getting more and more impossible each year. Its almost as if "they" are trying to push the small builder out of business.
My husband has never required an inspector to name him on their policy because the inspector isn't working for him, they are working for the buyer. He's only required to be named on a Sub Contractor's policy if he hired them.
I've worked with several of the local builder's in my area and not a single one has demanded to see the inspector's general liability policy nor have they demanded to be named on the policy as an additional insured. Hopefully that remains the case here in Oregon.
I know that insurance companies are getting more and more stringent Sandy. That is the way of the world. I would not name anyone else on my policy, but the Certificate Holder thing was a first. That part of this process was asked for in advance and I had time to get it done. The thing at the door was a bit much though.
Beau - I am not sure how I could have been protected by a last minute request like this by anyone! As to legal services, I would think that most people would want someone local to them who is familiar with all the local stuff. I have known my lawyer for over 20 years, but fortunately have hardly asked him for advice.
Hi Jay, Maybe it was covered here somewhere, but what could you possibly do during an inspection that could cause $500K - $1M worth of damage anyway, other than burn the place to the ground? I realize that isn't the point, but they may as well try to stipulate your religious affiliation.
Our jobs have become more difficult in the past few years anyway, without others in the industry just making them worse. I feel for you.
http://www.SoFlaRealEstateByJoe.com
There is no way a builder should ask to have any part of an inspector's insurance coverage. Sounds like time for an addendum in the offer allowing the buyer to use whomever desired to do the inspection.,,,without precondition from the builder.
But that gets us back to suggesting the buyer also use an agent to come up with that language.
Joe - my state requires $500K, but I carry $1mil. I doubt I could do that much damage! It was the last minute thing that bothered me the most.
Jim - I agree. The agent, had there been one, would have handled this up front, hopefully.
How sad that one [supposed] professional would create such transparent, unnecessary hoops to deter another professional...applause for having the $2mil. coverage. Good information. Thanks.
Jay,
Very interesting story. I worked for two quality builders in the Valley before they each went bankrupt. Neither one of them liked home inspectors, either. However, they never tried to pull this kind of stuff on inspectors. They acted like inspectors were a necessary evil in this business. I believe that you've got a tough job and an honorable one. And I'm glad that you're looking out for your home buyer.
Thanks Ruby. I wonder how common, or uncommon, it is among home inspectors. Nobody has said yet that they carry this, and in this amount.
Larry - the buyer is the process! I am not an alarmist, but I do like to see best practice employed in the construction industry.
Jay,
Intersting- As a builder developer we encourage inspections. Sub's often miss little things that we miss as well. We are looking for satisfied homeowners who tell others about the pleasant experience and the correcting of all the little things.
Sometimes you have to actually live in the property to find some of the little things and we take care of those too. If builders are not taking care of their customers, they probably won't have any. Word of mouth is the best and the worst advertising you can have.
Gerald
All agreed to Gerald! Right out of my Management 101 book in MBA school! Th customer is the process and when we forget that we are doomed. Your business attitude is great, as probably is your model.
Jay - interesting... I do not have too many new home sales here... but it is nice to learn from others. Best, Gay
That, Gay, is the real value to AR! Glad you could stop by!
I have not seen this sort of thing in our area but we do need to be aware that builder contracts here do not have a claus to protect the buyer if the home does not appraise. They are stuck with it or lose their deposit. And they refuse to let me add an addendum. These days this is tricky business.
Eileen - I have not heard that one! But wonder if it may be common around the country?
What is new construction?? We see so little of it here right now that I don't think we've had any of these ridiculous shenanigans....yet.
What is new construction?? We see so little of it here right now that I don't think we've had any of these ridiculous shenanigans....yet.
This was very interesting, Jay. Thank you.
Chuck - it's out there, albeit in smaller and smaller numbers. This may be the new norm for a while.
Christopher - glad you liked it and please stop by more!
Very interesting. This never crossed my mind and I've sold a few new construction homes. Hmmm.... Makes me wonder. Good for you for carrying Umbrella insurance. I have one, too. Better safe than sorry.
JAY STATED: But the builders are coming up with their own criteria, which I think is intentionally biased toward inspectors.
Did you mean "intentially biased against inspectors"? I think maybe, but the point is, this builder needs to be put in check by the listing agent, who won't do it because they are usually almost captive to the builder, or do in fact work for the builder. But Buyers are KING in most areas of the country, so I'm surprised they are giving you that much trouble. Maybe they've had a number of inspectors kill the deal? Hard to imagine on a new home, but ... stranger things do occur.
Good luck and .. I hope we get licensing for inspectors here in Iowa soon. People in the landscaping business have to be licensed, but not inspectors, which makes no sense.
Jan - it is a policy which covers me personally and while operating in my business. I think it is worth the money.
Andrew - I am not sure I said that, but if there is a bias it is building. The buyers may be king, but the contracts are very, very in favor of the builder. I might add that licensing inspectors in Virginia has not improved anything.
Jay, I had the same problem 8 to 9 years ago! Believe it or not, builders do have cause for concern as many inspectors (unfortunately) cause damage by not fully understanding what they are doing. Let's face it anyone that can sit thru an 80 hour class and pass a test can become a Home Inspector. I think many builders feed off intimidating Inspectors. As we built a reputation of knowledge and competency they let up (for the most part) however, sometimes we still run into one that wants to make things difficult.
Its great that you went prepared. In today's market, there are always new obstacles.
I avoid new construction like the plague. I did recently have a client calla to cancel an appointment. They said that the seller decided he would not allow one. That would have scared the hell out of me if I were the potential buyer.
This is totally not cool at all, and very disturbing to have happen even once, much less more than once.
Jay, I have not work with new construction yet. I will definitely keep this in mind in the future.
Dear Jay,
I am not sure, why builders are making this so difficult. I recommend to my sellers to welcome letting home buyers do a home inspection, so we have a baseline of the home's condition at the sale date. Not all new owners treat their home with as much care as the old owner. If they decide never to change the furnace filter and then try to sue for a broken heater three years down the road, the home inspection will show that everything was in good order, when the home was sold.
If something should be found, most owners have enough pride to fix it or give a credit to transfer the home into equally good hands. I think that Gerald (#177) has it right. Happy customers give referrals and how much does it really cost to correct the direction of a handle or touch up paint, which are the typical caliber of complaints?
Jay
I have been noticing this also. Standard Pacific Homes are the worst. I was on their list from last year and have to do an inspection on Wednesday. Now they tell me my 1 Mill GL insurance is not enough. They wanted a copy of my Auto insurance. What are you suppose to do but give it to them. It is pure and simple Bull S*#@. I am driving on public roads and parking out in the street. What in the world do you need my auto insurance for. I asked them what if I am going green and ride a bike to the inspection? The agent joked also and said I would look funny carrying my ladder on a bike.
It is pure and simple harassment. They are trying to get people to forget about the inspection process. I asked the builder if they require insurance from the agents and people who tour their homes. No was the answer. So then what is the difference of me touring the home and a potential client touring the home?
I am finding all this seams to be coming from California attorneys.
Lee
Jay , I had no idea new home builders caused so many problems.
Jay
I did not know you had such difficulty with the new construction. Inspections are a way of life now.
Steve - the requirements aren't new, but the increasing amounts will eventually get to be a problem and any last minute twists are definitely a problem!
Rodney - fair obstacles we can prepare for are one thing. Unfair changes are not...
Alison - well, I believe in the motto Be Prepared! That's hard when you have to anticipate what may be next!
Gerard - as some agents have suggested here, make sure things like this are in the contract and the requirements placed therein.
Dorte - I learned in MBA school that everybody knows 750 people. That could be a lot of good or bad advertising!
Lee - you can add a rider to your GL overnight. But auto insurance? Ha! That's a good one! Go the bike route and have UPS deliver the ladder!
Chris - and it is morphing! One has this requirement, another that one. When they all settle on the impossible one I will let you know.
Tim - and the builders realize that! Hence the changing nature of the requirements!
And thank you to everybody for your reblogs! I hope your clients can use this information also!
Jay - Great Blog. Thanks for the heads up! I have a very good freind's daughter buying new construction with us. I will get her a copy of your blog and look for an inspector with the required policies.
Really good and interesting post. I bookmarked it not only in AR but on Firefox as well. I'm saving this for my new home folder. Awesome stuff.
Hi Jay,
I think I know why your builder wanted to be named as a Certificate Holder on your policy. There's been an ongoing discussion about this over on SourceOfTitle.com. More and more title insurers are asking to be named as certificate holders on the E & O policies of title examiners. This is because sometimes an examiner's coverage will lapse mid-term because the insured failed to pay their premium finance installments. It's become more and more common in recent years, and when a claim does arise, the title company has no recourse against an examiner. As a Certificate Holder, the company would be notified if one of their contractors' E & O coverage has lapsed.
Don't know if it's ever been an issue with inspectors, but that's the rationale our underwriters are using. Thanks for a very interesting post.
Regards,
Scott Perry
Greetings Jay - In Arizona the good builders welcome the home inspectors. There is three builders we have worked with that I particularly like. The have a home inspector come in themselves before they give access to the homeowners inspector. Then they go in and fix everything found. There mantra is the more eyes on property the better the product and there reputation. It works, I recommend these builders frequently. Unfortuneately we have the not so good builders as well. Buyers must do their homework when not working with a good agent familiar with new construction.
Why on earth would a builder NOT want the buyer to have an independent home inspection? Can they really be afraid what little ol' you might find???
Cannot tell you the number of times I have forced strongly suggested buyers of new construction get an independent home inspection. Cannot tell you the number of serious items that have come up as a result.
M&J - and one with a lot of experience! Policies aren't important to the process except to the builders apparently.
Thanks Mike! That's a lot of bookmarking! And a good folder to have.
Scott - this was the first time anyone asked to be a cert holder. But I had it done. It was the last minute stuff that was disconcerting.
J&J - that is probably how it should be. The builders I have the most problems with are the national ones. Maybe it is just here.
Gee, Liane, I don't know. Maybe because of the stuff in my previous three posts? And yes, I find some really unthinking stuff at times!
Jay, thanks for sharing that story... I never realized that this was going on. The public should be warned of things like that...
We had a builder that outright told the buyer that they were wasting their money on a home inspection, that the inspector will always find something so that the buyer thinks they are earning their money...this was with their agent present, who never said a word. The buyer insisted on the home inspection, needless to say it did not go well, when we contacted the agent she made the comment that most home inspectors were previous builders that could not make it, thats why they are home inspectors now. She is a fairly new agent, probably won't be for long making those kinds of comments. The builder refused to do most of the requested fixes or return the earnest money...so you know wehre that is going.
Well, Monique, my post is something of a warning right? This has been going on for many years!
Jeanne - I hear things like that from time to time, from very myopic people. That agent clearly doesn't know what she doesn't know. Couldn't make it? Does she know what I have to do every year just to maintain my certification?
Here is an interesting blog I posted some time ago about how I am a placebo!
http://activerain.com/blogsview/1394784/-home-inspectors-are-just-placebos-
In Northeast OH, many new home buyers think you don't need a Buyer's Agent for new construction. They think they don't need an inspection, because it's a new home!
And, P&S, that is a huge mistake and one born of ignorance. You simply don't know what you don't know. The agent needs to be firmly in charge there!
That's unbelievable, Jay! I gotta tell you, you are THE MAN for having that insurance paperwork with you. It would have been hilarious if you had taken the receptionists picture while handing here the paperwork.
I was unaware of these shenanigans, and maybe they dont happen in SoCal because I have not had any complaints from people who bought new. I can only imagine that builders play this game because they know that they are cutting corners in this difficult economic climate. I always tell buyers that buying a new home does not mean they are getting an better home.
Thanks Reubs. But I got burned. That's why I carry it! You know the old adage - burned once, shame on you; burned twice, shame on me! Or something like that!
Sylvia - this has been going on around here for a long time! Over a decade for me anyway. Maybe not there though!
Jay this is a great post and just another reason people need an agent and a home inspector when buying a new house.
Yet another Gene? You bet! I have one tomorrow, new construction. The agent called to complain they had just called him saying he needed the inspection tomorrow at 8am. Fortunately I wasn't booked until noon!
Jay~ Good luck on that inspection tomorrow. I hope you don't have to pull a GOTCHA, but I'll bet you are well prepared, just in case!
Thanks Liz. It's today and the agent told the realtor I didn't need to show anything to them. We'll see...