Welcome to the Home Stream Hustle website. John Houston and Elliott Thomas are here to empower you with the tools, trends, and truth in the real estate market. Today’s post focuses on the importance of a home inspection for new construction and the myths that go along with it.
You can also listen to this podcast episode HERE
Should You Hire a Home Inspector on a New Construction Home
Most people would usually think that they do not need a home inspection on a new construction home because the county will conduct their own inspection. Builders want to keep their reputation intact so they would use their own internal inspectors. But conventional wisdom would suggest that we do not need a home inspection on a new construction build.
Why a buyer needs a home inspection?
If we lived in a perfect world, you would not need a home inspection because you will fall in love with your dream house and it would have no issues. Unfortunately, we don’t live in a perfect world. We don’t have perfect contractors and sub-contractors, we are humans, and we make human errors. Whether the home is new or a hundred years old, it’s going to have issues. But the problems will be different on a new build versus a hundred years old build. Do not take for granted, just because a house is new it’s not going to have any issues; mistakes can happen on new build as well.
Builder Warranty Protection
What contributes to the new home buyer thinking that it’s not necessary to have a home inspection is because for new construction homes there is a builder warranty protection deal and the new home buyer is drawn to think, “If any issue pops, up we will get it addressed.” However, in our experience, there are some scenarios which we will discuss below why you should get a home inspection done.
The importance of a Contingency on home inspection
A home purchase should almost always be contingent on a home inspection. It is the best protocol to do regardless of how you feel about the property or how new it is. If you got a builder warranty as well, that is just good peace of mind and be content with it. We are talking about an investment of $400 – $500 for peace of mind.
If and when those issues are found during the inspection period, if you have a contingent on the inspection, then the home buyer can back out of the transaction and walk away. However, if you do not have a contingent, things can and will go wrong with the house before you even you close.
Have you ever seen a warranty that covers everything? The belief that a builders warranty will cover everything in the home is not uncommon. If anything pops up, the builder will come and fix it, right? Think appropriately about those builder warranties because often there are some construction issues that are not covered. While you got the window of home inspection, it is your prime time to address all the problems that come back on that report. It is an opportunity to leverage that window of time, to get all the things perfect before the property gets in your name.
Three myths vs. reality of getting a home inspection on a new build
MYTH #1 – New construction homes do not have problems
We entirely do not agree with that; new construction homes will have problems too. It is common to have human errors, just because it is new does not mean it is perfect. This leads to complication during the building process. It is a process that involves sub-contractors and employees and all these different hands working on the house. With everything happening at once it is going to be extremely difficult for the builder to check all the phases of construction. Even the best builders can miss something.
Especially in a busy market like Nashville, most builders particularly the good ones have multiple projects. They get a lot of agents and investors coming to them asking to build their product. When you are handling various projects sometimes you do not have the man power to cover all the bases and make sure all the points are checked. This is when human error happens.
How often have you gone up to an attic and see missing installation or the installation is just not thick enough or you might have ductwork that is not attached correctly or siding that is missing?
Everyone is so anxious to get into their new homes and live in that new space; small things like drainage skim over and have long-term effects on the property. For instance, poor drainage around the house can be catastrophic. With a home inspection, they are going to cover the bases and make sure everything is right.
Imagine your builder warranty is over and two years down the line that drainage over time keeps leaking into the ground around the foundation and the next thing you know, your beautiful finished basement has water damage.
MYTH #2 – City building inspectors are more thorough than home inspectors
City building inspectors are hard workers and do a fantastic job, but in a market, like Nashville, they are overwhelmed trying to get through their day from project to project.
Now, imagine they go through a routine walkthrough. They are checking boxes so that these projects can move through to the next stage. What it comes down to is that city inspectors are hired by the city to do the job of the city whereas a home inspector is employed by you to look out for your best interest. It’s similar to an appraiser; you are paying the appraiser to do the job for you so that they are thorough and looking out for your best interest.
The city building inspectors have minimum standards to meet for the city. They have got a checklist, and they are going through it making sure everything looks good on their checklist. However, they are not your advocate; they are not your home inspector. The city building inspectors are only there to check for compliance with the city, and those are very minimum standards. Even though they might be doing their best, there will be factors beyond their control that will prevent these inspections from being enough compared to a home inspection.
I think documenting those items before the house is built can certainly go a long way if ever there is a problem down the road. If you can do a pre-drywall inspection with a home inspector before all the stuff goes up to look at the plumbing, electrical and everything that’s going to be behind the walls then that can be very beneficial down the line. Even more so if you do another home inspection once the drywall is up. That way you will know what is in the walls. If you are doing a regular home inspection, you are not going to start knocking holes in the walls to see if the electrical looks good. However, documenting those things beforehand can go a long way.
Furthermore, it’s just good to have another eye, as it is normal to have human error. Hiring one more person to come through and make sure everything was done accordingly will give you peace of mind.
MYTH #3 – If I were to sell my house, the buyer would conduct a home inspection anyway, so I might as well save a few hundred dollars.
Even though it is a sound argument, let’s say you are spending $500,000 on this home purchase. What is $500 to have a peace of mind for your investment? We will always encourage you to spend the money so that you safeguard your investment.
Once you have established a rapport with a home inspector have them come back to inspect again before the builder warranty expires. It may be another $500 but spend it again. It’s to make sure that you leverage the builder warranty to the most of its value, to make sure everything is excellent once the warranty is not in place.
“Spend a $1,000 if you have to, do a double home inspection, just make sure to cover your bases.”
Someone buys a house and at the time of selling it, they discover there is some problem that existed when they bought it. The problem tracks back to the original construction and the buyer now has found out about it. If the seller had done the home inspection when they bought it, they would have caught the problem. However, now it’s the sellers’ problem. Before it was the builder’s problem but now you are going to own those problems!
So spending a few hundred dollars on a home inspection is absolutely worth it.
Additionally, if we as agents are going to be on that transaction again then it’s very important for us to cover those bases early on. We would instead prefer an “I told you so moment” than an awkward pause when both parties need be sorry. It comes back to us as an agent. It’s our job to help our buyers navigate through this process and coach them on all the potential hypotheticals that can happen. Such moments like this wind up being an “I am so glad you encouraged me to take a home inspection vs. why did you try to save me $500? Why didn’t you speak up?”
The bottom line is hiring a home inspector is always a right decision…no matter what. So we encourage all the listeners to check out local inspectors in their own area. We believe this to its core.
To sum up:
This episode dealt with the myths of a home inspection for new construction. Additionally we answered whether or not you should hire a home inspector on a new construction build. We gave you three myths:
MYTH #1 – New construction homes do not have problems.
MYTH #2 – City building inspectors are more thorough than home inspectors.
MYTH #3 – If I were to sell my house, the buyer will conduct a home inspection anyway. I might as well save a few hundred dollars.
The Good News
Hiring a home inspector to inspect your home on a new build or a house that’s a hundred years old is going to pay for itself many times. Investigation of any physical condition of the home is a critical aspect of the home buying process and therefore should not be skipped. Feel confident that these problems are identified and corrected early on before you buy your home. It’s a great way to start off on the right foot.
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