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Trust us when we say, we’ve heard it all when it comes to homebuilding. Today, we’re sharing two stories of first time home buyers with you to help you avoid finding yourself as the star character in your own first time home building horror story.
Sarah & Luke:
Sarah & Luke were not your conventional first time buyers. Instead of buying a starter home, they decided to live with their parents and save a larger down payment. They wanted their first home to be their “forever” home. To them, a temporary living arrangement was a sacrifice worth making. Sarah worked a second part-time job and Luke picked up overtime whenever possible to continue to build up their house fund. They meticulously reviewed house plans and inspiration photos until they could literally imagine themselves living in their dream home.
When they chose a builder, Sarah & Luke truly believed that they had done their homework. They met with a few builders & visited their model homes. They called references and most of all, they trusted their gut… the builder that they chose in the end was a really nice guy!
What Sarah & Luke did not know, was that the builder was in trouble financially… as in, “verge-of-bankruptcy-trouble”. This was not something that they had even thought of when they excitedly signed over their large building deposit. After all, there was a signed contract to protect them.
As the build progressed, Sarah & Luke noticed their builder became more distant and difficult to reach. They felt like he was avoiding their calls and that their project was less and less of a priority. They started to feel it in their gut… something was wrong.
As their home was about 80% complete, their builder requested a draw- Luke & Sarah had their bank advance the funds. Within days, it became public knowledge that their builder was out of business. Worse yet, he had not been paying the trades that were building the home. Luke and Sarah found themselves with a house that was incomplete, tens of thousands of dollars owed to trades people and financial and legal issues they were totally unprepared for. What a nightmare.
Mike & Christine:
Mike & Christine could not have been more excited to build their first home and quit renting! This was the next step in the future that they were planning together. Instead of purchasing resale, they decided that they would build a new construction home. A new home would guarantee less maintenance for these newbie homeowners.
Mike wanted the perfect neighborhood- close to his parents and Christine’s work. They were thrilled when they found a builder who was developing exactly where they wanted to be.
Having signed a purchase contract, they proceeded to choose everything from siding to cabinets to flooring. Christine clipped magazines and watched design shows- she was certain that her new home would be perfect.
Driving by the jobsite every day for months, Mike & Christine got more and more excited about their upcoming closing date. They watched their home come together and it looked more beautiful than they could have imagined.
Finally, it was time for their pre-closing inspection… where they would get to see the finished interior of their home for the first time. Anticipation filled their veins as Mike & Christine approached their front door for the very first time. As they entered their home for the first time, they were thrilled to see their selections and choices come together beautifully.
The excitement was almost enough to make them miss the first warning sign… the trim at the top of their doors was visibly not level. They started to look closer and the trim on the hardwood staircase was uneven & the grout lines of their tiles were not inline with the walls. The closer they looked, the more obvious the flaws became. The feeling of excitement and anticipation was replaced with shock and disappointment.
They immediately voiced their concern to their builder who dismissed their thoughts, and told them that the house was built to code and that, in his opinion, nothing was wrong. Mike & Christine found themselves with a home that looked like a nightmare and there was nothing that they could do about it. It turned out that their builder made his profits by hiring the cheapest labor possible instead of specialists in their respective fields. The result was shoddy construction quality and extremely disappointed clients.
How could this have been avoided?
Many people interview client references for their builder. And while that is important, they should also be interviewing the trades that work with the builder, and local real estate agents. Ask your builder for 3-4 contacts that work for them and be sure to ask the following questions:
1. How long have you been working with ABC Home Builders?
Most buyers would not think to ask this question but, the answer can reveal a lot about your homebuilder. If the relationship between trades and builder is longstanding, then it is likely that two things are happening. First, the trades are more likely to be performing quality work since the builder is keeping them around. Secondly, the builder is likely treating the trade fairly well.
Beware of builders who have a revolving door of trades people working for them as this is more likely to result in sub-par quality and lack of pride in the work provided.
2. How does ABC Home Builders check the quality of your work?
Another great question, this is one of the best ways to ensure that you’re getting a well built home. Every builder should have a quality control program in place and should be checking every single component of every home! At Martell Home Builders, we require trades to submit a quality control checklist with their invoices for every job. Also, our project managers visit every jobsite, between trades, with their own quality control checklists.
The trades that are building the homes will be able to tell you how your builder monitors quality.
3. Do you have any issues receiving payment for your work in a prompt manner?
Let’s face it… the trades work hard for their money! And they won’t stay with a builder who doesn’t pay them on time. As Luke & Sarah found out, this is one of the first ways to evaluate your builder’s financial strength. Had they interviewed a few trades people, they would have found out that invoices were going unpaid… RED FLAG!
Make sure that your builder is paying trades on-time and treating them well… after all, they are the people who should be on their game when your home is being built.
What homebuilding horror stories have you heard?
Could these have been avoided with proper research & planning?
This post content is sponsored by Royal Bank of Canada, however the views and opinions expressed herein represent my own and not those of Royal Bank of Canada or any other party and do not constitute financial, legal or other advice.