If you’re buying a home be thorough in the inspection. I’ve known a few people who got screwed.
On newer homes you want to look out for shoddy construction. On older homes pay particular attention to water, mold, roofing, and basement and/or foundation issues.
You might still buy a house with issues but you need to know what you’re getting into and price in repairs.
Unfortunately batshit housing prices coupled with ignorant buyers means that in some markets it might take you a long time to buy if you’re prudent. Push back a little on price and someone else will take it and waive inspection.
This isn’t just happening on the West Coast. I live in Cincinnati and have a family member looking and they got front run a few times by buyers purchasing with no inspection at or above asking … on properties they’d visited and that they knew had issues. It’s nuts.
I've learned that no home is perfect but some of these are a total nightmare. I've been through a number of homes over the years in the Texas market. Anything built after 2012 or so drops off like a rock in quality.
I intentionally bought one with minor foundation and drainage issues because the trade off was that everything else is perfect. You can fix landscaping, concrete, insulation, plumbing, etc. with incremental expenses. You cannot fix your location. That requires starting all over again each time.
I don't usually recommend Instagram accounts but I've been following CyFy Home Inspections[1][2] for quite some time now and you get a real first hand glimpse at what this sort of shoddy construction looks like.
The customer is the only one left to squeeze, Lennar and others have already squeezed every penny they can out of their subs and suppliers.
I sell construction work mostly as a subcontractor, and I can definitely tell which of my customers rely on squeezing their subs to maximize their margins (JCI, Siemens, Honeywell and other global multinationals) and those that would like us both to make decent money (pretty much everyone else that doesn’t have a market cap in the billions, excluding some GCs I’ll not name) and while the big boys have a lot of work, doing projects with the latter companies is a lot more enjoyable.
When the builders treat you horribly for asking if you can have an inspector come in and then put a bunch of rules for what the inspectors can do, massive red flag.
I was interested in a Lennar community before I knew how bad they were and everything from their advisors mouth made my (new to it) real estate agent and I feel icky. They said you can inspect but can only report issues if visible from six feet away, can’t open drawers, can only test one outlet, no roof or basement access. I passed on them and a year later some of the houses flooded because of Lennars negligence when to modified a riverbank.
> ... [M]any avoidable defects are caused by business practices that focus on building and selling quickly, with minimal concern for repeat business or quality control, according to Robert Knowles, president and founder of the National Association of Homeowners and a licensed professional engineer who said he has inspected thousands of new builds.
> “There is no bonus for building the house to code, for quality,” Knowles said, to his knowledge. “There’s only bonuses for speed … and volume.” Knowles estimated 100% of all new builds probably have multiple code violations.
This leaves the home buyer having to very quickly assess the quality of the structure and account for this in their offer price. It feels like there's a business in here somewhere... Perhaps do a video call with a home inspector while you attend an open house?
Lots of corner cutting, sometimes literally. I'd stay away from anything with a complex roof. If it's trying to look like an entire village compressed into a single building, it's unlikely they got all the various creases and drainage paths correct.
Of course big(ger) builders have legal departments that can stonewall you and cause all sorts of delay. Further, depending on what the problem is, it may basically be 'unfixable' short of tearing down the house and re-designing/building it taking actual building science into account.
An example for the latter case, a homeowner couple spent six years fighting the builder before finally settling (the day before the trial began) and taking a buy out. A video with the building science consultant (Corbett Lunsford) they hired to debug the issue:
The quality of everything has gone to pot and, of course, that fact does not show up in the inflation numbers in any meaningful way.
I purchased a dresser from Restoration Hardware back in 2001 as a recent grad and it's quality is unbelievable by todays standards: dovetail joinery, excellent wood, etc. Now I go and look at furniture and I'd have to spend (what I consider to be, lol) a car's worth of money for anything close to it.
If you're interested in knowing why, the reason for this is century-long expansion of the money supply at an average of ~7% year. This halves the value of the dollar every decade and assuming you get an average payrise of 2%/year, means you've been getting an average paycut of 5% every year. This would mean that you couldn't afford anything, except for the fact that the value of consumables (food, toothbrush, books etc.) goes down by around 5% a year due to the constant reduction in human time required to create them, due to technology advancements. Unfortunately those technology advancements haven't been made to high-quality furniture, which is likely still mainly hand-made.
The majority of people I know who had homes built in the past 15 years are miserable or sold the houses after only a few years. Builder buries the homeowner in paperwork, contractual litigation, and passing them around subs, and ultimately they are left spending a fortune fixing glaring issues or finishing tons of incomplete work (I had a friend where they didn’t install an entire bathroom and then argued it was added late by the customer even though it’s on the blueprints for all the houses in the development).
Heads up on this media source: part of Hunterbrook's business model to give investment funds early access to the news, so they can trade ahead of it [1].
Now that is not to say that this story is false, or even that the business model is necessarily bad, I will leave that up to you to decide. But this media source has a different set of motivations than most readers are used to. You'll notice that the news is about two US companies that are easily shortable, DHI and LEN.
16 comments
[ 2.6 ms ] story [ 46.8 ms ] threadOn newer homes you want to look out for shoddy construction. On older homes pay particular attention to water, mold, roofing, and basement and/or foundation issues.
You might still buy a house with issues but you need to know what you’re getting into and price in repairs.
Unfortunately batshit housing prices coupled with ignorant buyers means that in some markets it might take you a long time to buy if you’re prudent. Push back a little on price and someone else will take it and waive inspection.
This isn’t just happening on the West Coast. I live in Cincinnati and have a family member looking and they got front run a few times by buyers purchasing with no inspection at or above asking … on properties they’d visited and that they knew had issues. It’s nuts.
I intentionally bought one with minor foundation and drainage issues because the trade off was that everything else is perfect. You can fix landscaping, concrete, insulation, plumbing, etc. with incremental expenses. You cannot fix your location. That requires starting all over again each time.
[1]: https://www.instagram.com/cyfyhomeinspections/
[2]: https://www.cyfyhi.com/
I sell construction work mostly as a subcontractor, and I can definitely tell which of my customers rely on squeezing their subs to maximize their margins (JCI, Siemens, Honeywell and other global multinationals) and those that would like us both to make decent money (pretty much everyone else that doesn’t have a market cap in the billions, excluding some GCs I’ll not name) and while the big boys have a lot of work, doing projects with the latter companies is a lot more enjoyable.
I was interested in a Lennar community before I knew how bad they were and everything from their advisors mouth made my (new to it) real estate agent and I feel icky. They said you can inspect but can only report issues if visible from six feet away, can’t open drawers, can only test one outlet, no roof or basement access. I passed on them and a year later some of the houses flooded because of Lennars negligence when to modified a riverbank.
There is a reason lying is popular. Its easy.
> “There is no bonus for building the house to code, for quality,” Knowles said, to his knowledge. “There’s only bonuses for speed … and volume.” Knowles estimated 100% of all new builds probably have multiple code violations.
This leaves the home buyer having to very quickly assess the quality of the structure and account for this in their offer price. It feels like there's a business in here somewhere... Perhaps do a video call with a home inspector while you attend an open house?
do people not consult a lawyer before they buy a home? Also, are the credentials of the builders not checked?
Developers know people are desperate at the moment and they shoot for quality standards commensurate with that.
* https://www.tarion.com/homeowners/the-new-home-warranty
Of course big(ger) builders have legal departments that can stonewall you and cause all sorts of delay. Further, depending on what the problem is, it may basically be 'unfixable' short of tearing down the house and re-designing/building it taking actual building science into account.
An example for the latter case, a homeowner couple spent six years fighting the builder before finally settling (the day before the trial began) and taking a buy out. A video with the building science consultant (Corbett Lunsford) they hired to debug the issue:
* https://www.youtube.com/watch?v=MWeCiWbbffI
I purchased a dresser from Restoration Hardware back in 2001 as a recent grad and it's quality is unbelievable by todays standards: dovetail joinery, excellent wood, etc. Now I go and look at furniture and I'd have to spend (what I consider to be, lol) a car's worth of money for anything close to it.
Now that is not to say that this story is false, or even that the business model is necessarily bad, I will leave that up to you to decide. But this media source has a different set of motivations than most readers are used to. You'll notice that the news is about two US companies that are easily shortable, DHI and LEN.
[1]: https://en.wikipedia.org/wiki/Hunterbrook