How Buyers Can Limit Problems When Building a Home
by Hank Miller
on Tuesday, December 8th, 2020 at 3:13pm.
There is a serious lack of skilled labor among home builders in the Atlanta area. Quality and issues exponentially increased over the prior few years, then a pandemic came to town and flipped the tables. A voracious appetite for housing met drastic labor shortages, limited inventory, rising prices and Covid-19 delays. Builders are racing to get homes built and sold; their site agents busy working getting buyers under contract for them. Who is representing the best interests of those buyers? Not the site agent
Who is Building Your New Home?
"ABC Homes" is not building your home; your new home is being built by subcontractors that bid for the work. A lack of skilled labor is arguably the biggest problem with new construction. Many experienced tradesmen left the industry during the post crash era and never came back. Those few that did are now older, working in a very physically demanding field. It's not a secret that most younger workers prefer office work over manual labor, that is seen as a more lucrative and an easier environment. Construction and associated fields are generally considered low on the option list and even if done, the typical worker is hoping for something else to come along. The pandemic further hurt the industry as work from home, a gig economy and even family/government support are considered better options.
"The ratio of job vacancies to unemployment in the construction industry – a measure of labor market strength – shot up to historic highs at the end of 2018, and it has remained near those levels. These indicators confirm what is heard from construction industry employers around the country – it’s extremely difficult to find and hire workers, skilled or otherwise.” Federal Reserve 2/2020
Poor Quality Control & Management of the Build
While some aspects the construction process have advanced, studies repeatedly show that overall production efficiency continues to be poor. A significant shortage in experienced project managers exists. Scheduling remains the major issue due mainly to labor shortages, access to materials and weather. Delays are constant and in some cases, quality suffers as work is rushed. Supervisors are under time constraints and rushed, municipal inspectors are again loaded and may not be as thorough as needed and work crews tend to push from job to job faster than they should. The result is an increase in fit and finish complaints, warranty calls and mandated repairs of defective work. In short, it's speed over quality.
How Buyers Can Limit Problems When Building a Home
There are two key things every new home buyer can do to help avoid problems with new construction. First and most important is to work with and be represented by an agent experienced with the process of building a home. The agent on site represents only the builder; they are legally contracted to do so. When issues arise, they will forward concerns but will not be an advocate for buyers. The builder pays the buyer agent; NOTHING is kicked back to buyers that don’t have an agent, there are no discounts. New construction contracts are very different from resale contracts; they are completely skewed toward the builder. There is no due diligence, no appraisal contingency and none of buyer protection in typical resale contracts. Unrepresented buyers often run into issues they never expected.
Having skilled eyes on the build is the second critical item, hire an experienced independent home inspector. The “pre-drywall” inspection is a must; at this point the home has major systems installed (plumbing, electrical, HVAC) but drywall is off. The inspector can spend time ensuring that all aspects of the build are in accordance with codes, building standards and or manufacturer guidelines. It is a guarantee that issue will be found; some due to simple misses, some to mistakes and some to indifference. No matter, those missed issues become the buyer’s problem at closing. Do not rely on the municipal inspectors to find all defects, they will not.
It is critical to have expert oversight throughout the build; we get calls weekly asking for help on how to handle problems ranging from contracts through closings. Don't get into that situation!
A home isn’t built in a controlled environment, no one can contain all of the variables. Builders have challenges but new home buyers must understand how that impacts them. From the time that model door is opened, the objective is to get a contract and move on to the next potential buyer. This is an assembly line; if proper and consistent attention isn't paid, mistakes will be made and corrections can be difficult. Knowing how to avoid them and if needed, fight to get them corrected, is what an experienced agent does. This is a major investment, hire a pro to guide you through the process.
The Hank Miller Team puts 30+ years of full time sales & appraisal experience to work for you. Act with complete confidence & make sound, decisive real estate decisions.
678-428-8276 and firstname.lastname@example.org