Hindsight - Experiences of Building a New Tract Home

Hindsight:
Experiences of Building a New Tract Home

By Adia
Senior Staff Editor

Are you considering building a new tract home? With the economic slump and lower mortgage rates in 2003, there were many affordable options for building a new home - instead of renting or buying another used home, while the rates are at an all time low.

The following are comments and experiences from my new tract home building process. I hope you will find it informative and helpful if you are considering the new home building process.

For obvious litigious reasons, I choose not to reveal the builder's name. You may write me for further information, if you wish to know the builder I chose.

In essence, with this builder, I bought options SIGHT UNSEEN.
The sales guy wrote up all my optional choices right there at the purchase signing. He provided only verbal descriptions and a price list - with only a few pamphlets or picture brochures of the upgrades I was purchasing. On some large dollar options such as the skylights and garden tub, no photos or model displays were available!

Big mistake. Some of these options were big ticket items, such as skylights and whirlpool bath with jets. They showed me a 2 year old model and said the tub would resemble the model. Instead of a kidney shaped porcelain tub with a nice ceramic border surround, they installed an institutional looking gray, square textured fiberglass (looks like plastic) tub with a 3" plastic-looking ceramic surround. Had I known that, I would not have purchased the $1100 jets for that tub. I would have tossed the cheap looking garden tub and had the jets installed in a garden tub from a spa retailer. NOT. This tub is built into the wall and you would have to rip out the surrounding drywall and rebuild it to remove and replace the tub. When this builder upgrades the master bath layout with a garden tub - you are paying for the construction upgrade - and getting whatever tub they decide.

This tract home builder wants the customer to purchase all of their options right there at the purchase agreement signing.
It is considered an "add on" to the agreement, when you go to their selections process and choose to upgrade more options, besides standard choices of exteriors, paint, cabinet and carpet colors. Some tract home builder have a central showroom with current options to view. This builder's selection center had mostly pamphlet or printer image photos - which were not hand out brochures. I insisted on getting a photo copy of the faucet, lighting and plumbing fixture upgrades - so that I could verify that I received my upgrades as promised. (which I didn't and had to fight for later on)

Had I not copied that brochure, I would still be fighting for what I was sold - but didn't receive.
As it is, I had to fight to get the lighting fixtures upgraded in a few rooms - which they now say no longer qualify for upgrade. The brochure said "whole house upgrade" - and that photo copy has come in handy - because this builder was bought out by another builder right in the middle of my purchase agreement signing / building process. There were many changes made from one builder to the other - and the customer fell through those cracks when it came time to honor what was promised at the signing commitment..

For instance, I was also overcharged $50 for the lighting upgrade . The price list I was shown during the purchase agreement signing - and the price I was charged at the selections process, were different. I discovered this later before closing and had to demand a refund at closing. I had to request a copy of the price list and fax it and hash it out with their corporate office personnel. They were everything but apologetic. They were very rude and stated that it was just $50 and that I should just forget it -- because I had received way more than I already deserved in this building process!

When building tract homes, the builder usually changes vendors and product lines frequently.
Some are improvements, some are cost cutting moves, others are to replace items that required too much repair or were often defective. So, be sure to check out all the optional items you purchase. It is very disappointing to receive an option you paid additional for - but is not at all what you chose. It might be wise to look for their clause on changes - what they reserve the right to change or substitute.

Get everything in writing as much as possible.
Get pictures and model numbers of your choices. Slick sales people who assure you of things verbally can (and usually do) deny it down the road when that item is different or not offered as promised.

Ask to see a price list of options.
I had them faxed to me - so I could decide on costs and choices alone, in the privacy of my home. I did not wish to quibble and decide on options, sitting in front of the sales person. I was able to add up my costs and determine the figures beforehand - without the sales person's pressure and direct input. That reduced the pressure of a quick decision during the purchase agreement process. The last thing you want to do is rush through this legal stuff.

Know what the penalties and contract restrictions are for your purchase agreement.
Be sure to see it in writing - what constitutes a no-penalty walk-away -- and the fines involved if you decide not to buy the house. Usually, there is a contract breaker (in my case, documented building issues) - which allows you to walk away without penalty.

What do you lose if the house has legitimate problems and you walk away?
Do you lose your deposit? Do you lose any money you paid for options outside of the purchase contract? Some items I had to pay for in advance out of pocket - dealing directly with the service company. If you have to pay ANYTHING out of pocket up-front outside of the purchase agreement/loan amount, be sure to ask for the minimum payment. Most companies will offer two payments - one down and the balance at closing. If you don't close - you are not out that second payment. In my case, I paid the entire $500 up front for special security/Internet wiring - when I could have paid half initially and the other half at closing. If I don't close and I paid it all upfront - I lose the money I paid for special wiring that I had installed. When you legally walk away, the builder does not refund any money you paid out of pocket, even if they required it be paid when you are building the house. It becomes their profit when selling that option on your house - that you didn't end up buying - but paid for out of pocket.

Don't buy things for the house until you close on the house and have keys in hand.
This is a little like having a baby - that died. You were not planning on losing this baby. You bought and planned on many things. But what if this house doesn't happen? If you bought all new appliances, secured services, made financial obligations, etc. before close or hinging on a close date --- always be prepared for the worst case scenario of WALKING AWAY. I never dreamed I would find devastating damage (hidden) at the final walk though.

Have a contingency plan if you have to walk away.
Since the planning & building process takes about 3 months, a lot of planning and expenses can occur during that time. I didn't foresee walking away. Luckily, I own a house. If you live in an apartment and have given notice for a certain date to vacate - be sure you can undo that plan. If the house is delayed or you have to walk away - you will still have a place to live. Do you have the time and resources to build another home elsewhere, if this one doesn't work out? Are you prepared to continue to live in your house or apartment if you have to walk away from this house? Will you just buy an existing home?

I put the house on the market later - one month before the house was due to close.
I started renting storage units in FEBRUARY. The purchase agreement was signed mid March and the house began construction mid April. I had two storage units that I have been renting since February. Everything is packed - I mean down to bare bones living. And now, if I had to walk away -- what are my choices? Move back in to my house, close the storage units and take the house off the market.

I looked at all other builders and could not find a floor plan that suits my lifestyle - except with this current builder.
If I walked away, I was relatively certain I could not legally build again with them. Would I want to if I could? It would take a minimum of 3-4 more months to build another home (and another $3000 for storage, inspections and cash outlay). Would I find a lot that would be as private as the one I initially found? Because I purchased in the winter, I received all sorts of discounted prices - as an incentive to buy in the Winter for a Spring build. No one can offer me now, what I have in discounts on total and optional prices - not even this builder. What a dilemma! After seeing the construction process, no way would I buy a new home that was already built. At least I know how the house was built. And, for the prices they want for an almost new home, you can build a new one yourself these days. So building is still the preferred option. Another issue is the fact that I would need to take the house off the market, to live in this house until the next new build was completed. That would be late Fall --- not a great time to be selling a home. It is scary enough to have mortgages on two homes - not knowing when / if your other home will sell. Oh yes, then there are the interest rates. Although they will fluctuate, they are likely to start going up soon by the end of 2003. Time has run out for me - so my hope was that I can repair the damage and be OK with my new house.

Most people will want to tell you the horror stories of tract home builders.
There are more horror stories than good ones, I'm afraid. I could tell you many myself, but it isn't helpful. What would be helpful in preventing your own horror story, is to be informed. Ask questions. Take notes. Take pictures. A digital camera is priceless during this building process. Pictures don't lie. Cover-ups don't stay a secret. I bought a big 3-ring binder with folders and organized my paperwork. There is so much of it generated by the builder, not to mention what you will generate with notes, photos, inspection documents, etc.

Plan to stop by the house at least 2 times per week, during construction.
It is preferable you stop by during work hours when you can ask questions - but if not possible, after hours. Plan to spend 1-2 hours each time. ALWAYS bring a camera and pen & paper when you visit the work site. Even if you don't know what you are looking at, a digital camera picks up an amazing amount of detail, that you can study at a later date.

As you walk through the house, go slowly and observe everything - and take pictures.
Even crooked studs should be called to the superintendent's attention. Don't let them bully you. Just because it is tract housing, doesn't automatically mean all workmanship should fall to the wayside. For instance, a crooked or bowed stud will show up in the finished drywall as having a bump or curve or even bowed-out appearance.

Ask if the superintendent uses a message board, located at the building site.
Or do you always have to meet with him to convey your concerns? Message boards are commonly provided in the garage - next to the blueprint (blueprints must be there for legal/code requirements). My builder's superintendent did not utilize a message board - and was often unavailable (and uncooperative) to meet with me, regarding my concerns.

If I had it to do over, I would have met with the superintendent BEFORE signing the purchase agreement.
This guy is an important key to getting things done (or re-done) properly. He can only see so much of your house - then he has to run to the next one. Often these supers oversee 40-60 houses at a time. So you can imagine how little they really pay attention to the detail of each house being built. Basically, if a subcontractor is doing a bad job, it may very well be up to you to point it out. It costs money and time and paperwork to re-do poor workmanship or code violations - and the builder will likely not have it re-done unless you insist. Also, if the superintendent dislikes dealing with women (or doesn't respect them on the construction site) and YOU are the one dealing with this guy the most - you need to consider this.

Be ready to report inappropriate behavior.
It's your house. If your superintendent is obstinate and avoids you - and is uncommunicative, be prepared to go over his head and meet with his boss. This is usually an area manager. Half way through the construction of my house, I only dealt exclusively with the area manager and HIS boss. Squeaky wheels worked. My super should have been fired -- or at least severely disciplined. You can obtain this information (the area manager's name) from the sales agent.

Are you interested or available to learn a little about the construction process?
It is helpful for you to know what you are looking at during the phases of construction - and be abld to ask intelligent questions. If you employ a good inspector, he or she should be willing to show you things, answer questions and educate you about what you are looking at and for, during the building process. Internet searches are very educational, as well.

Your inspector should write a report, indicating issues you will need to address with the builder.
Unfortunately, the inspector usually does not go to bat for you and confront the builder with code violations and poor workmanship. That is up to you to address with the builder - with report in hand. Sometimes you may get lucky and the inspector and superintendent will both be present - so that the inspector can point out some things to the super - sometimes not.

Be sure to ask what the written policies are, regarding inspections.
This builder attempted to thwart an inspection, by citing some "policy" that never applied in the previous inspections - regarding 8am-5pm M-F inspections with staff ONLY. Since your superintendent will not usually give you exact schedules of completion, you may miss an inspection if you don't know that phase has been completed. Coordinating inspections with the inspector and building staff is usually quite challenging -- but well worth the effort.

You should have all 4 stages of construction inspected.

1) The foundation is pretty important - because all of your plumbing is about to be frozen in place with concrete. (tract homes are usually concrete slabs) You might want to see them actually pour this - to be sure the pipes are properly supported and the Visqueen barrier is properly in place. Pipes that are 6 feet extended without support can possibly spell trouble a year later in your home, causing possible leaks from the concrete weight on unsupported and stressed joints to be absorbed in the concrete and surface under your carpet.

2) The framing - which includes roof and all the support beams, trusses, studs and plates completed.

3) The mechanicals - plumbing and electrical installed within the framework must be monitored -- especially if you chose specifically placed additional outlets or special plumbing. This phase in critical because once the drywall is up, all plumbing, framing & electrical is COVERED UP. Some inspectors will do the framing and mechanical inspection together, to save you money. The only draw back is if you have a framing issue - it is pretty far along and more difficult to get the builder to make corrections - especially if the insulation is up and hiding electrical/plumbing.

4) Final Walk through the week before closing. A second pair of eyes for your final walk through is very important. The builder usually does not welcome nor respect home inspectors. Be prepared for them to challenge reports submitted by your inspector. The superintendent even tried to insist that code required a final walk through be done 6 feet away from the wall. How ridiculous is that? You should perform your walk through with your inspector and take notes. It would be wise to walk through again before your final "official" walk through with the builder. It is amazing how much you can miss. It is better to address as many items as possible, before you close and find yourself on the other side of the contract signing. Once they have your money and commitment - your repair items quickly become back burner priorities.

Did you know that superintendents receive bonuses for 7 items or less listed on this closing walk through? Be sure you get a copy of what they wrote down - and that all the items on your list are included.

Here are the steps and approximate scheduled order to building your house:
Grading and site preparation
Foundation construction
Framing - Floor / Walls
Installation of windows and doors
Roofing
Siding
Rough electrical
Rough plumbing
Rough HVAC
Insulation
Drywall
Underlayment
Trim
Painting
Finish electrical
Bathroom and kitchen counters and cabinets
Finish plumbing
Carpet and flooring
Finish HVAC
Hookup to water main, or well drilling
Hookup to sewer or installation of a septic system
Final Punch list (your superintendent does a punch after each of the 4 stages listed above - so will your inspector)

If you are not aggressive or assertive, that request process may be uncomfortable.
Be prepared to encounter bias on the construction worksite. An intelligent woman really has to prove herself in that arena. I think the boys know by now - not to screw with me - but I had to earn their respect, I assure you. Stand your ground. Be informed and educated. Use their terminology with confidence. Do lots of searches on the Internet, to educate yourself!

Ask for a building schedule.
How else are you going to know when to be there for critical phases? Errors could be covered up the next day - so follow that closely. They don't give these schedules out willingly, but if you ask often enough (what's next) they will grow tired of your inquiries. They have an estimated time table for the different building phases. You may want to be present when they are laying down the carpet, for instance. Or some other process, like electrical, plumbing or drywall.

Are you reversing the floor plan?
Are you adding extra footage? (referred to as a "bump-out")
Those two variations can cause problems, if the superintendent is not paying attention. I did both - and found that during the slab pour, the plumbers did not make the proper adjustments to accommodate the 2 foot add on -- and placed my 2nd bathroom toilet too close to the shower. They had to sledge hammer it and move it weeks later. With the reversed floor plan, the subcontractors did not make allocations for the kitchen floor plan reversal, either. In my floor plan, reversing the kitchen meant the pass through would be located in a different place - 1 foot over. Only after they completed the drywall and installed the sink, did they notice they built the kitchen with the original floor plan specs. I had to fight them on making this pass through more visibly aesthetic. They sledge hammered it up and did a poor quality job in patching it back up after moving it over a foot. The drywall had already been completed. (see next section below)

Did you know fixing errors improperly can cause major problems later for YOU?
The builder's sub-contractors experienced severe dyslexia, when building my home. As mentioned above, when I chose to add "bump-outs" and flip the floor plan -- they forgot to make the necessary adjustments. One side of my house was "bumped out" 2 feet (an expensive option that adds footage to your floorplan). They didn't make allowances in the bathroom and the toilet was in the wrong place. They brought in a guy to sledge hammer the concrete and move the plumbing. On a slab foundation, the reverberations from his sledge hammer could easily have caused cracking in the concrete elsewhere in the area. I won't know for a year or more - when I go to look under the carpet to check. Who knew? In retrospect (the beauty of hindsight) when I saw this guy preparing to sledge hammer the concrete slab, I should have INSISTED he drill holes in the area prior to whacking it with the sledge hammer. This would have reduced the "shock" that occurs along the "fault line" reverberation. Chances are, you wouldn't be present to even see this event -- but I was. However, I didn't find out this information until after the fact.

Did you know some carpet subcontractors DO NOT SWEEP UP THE DEBRIS BEFORE INSTALLING CARPET?!
I wanted to be there to be sure I received the upgraded ($400) padding. How would I know otherwise? I arrived just in time to find drywall pieces, dust piles AND LARGE NAILS under the carpet padding - for the carpet that was about to be installed. How rude is that? Who would have known to check for that?? You know, women would NEVER build a house like men do. Leaving debris under the carpet will eventually crumble and make it's way back up to the surface. Be certain you know when they are installing your carpet - and be there to prevent this common practice. This is your only chance to verify carpet upgrades, color codes and padding upgrades, if you made any.

Ask Questions.
Challenge their answers, or ask for more explanation, especially if the answer seems vague. You might want to jot down questions and answers on a pad of paper. It will be easier to recall and document the details of that day's visit.

Here is an example of an answer that sounded like an evasion to me:
On my final walk through, there were no shower doors installed. The second bathroom had a 6'X4' walk-in shower in lieu of a tub. I purchased the sliding door in lieu of a shower curtain. Yet, no door was installed AND a shower curtain rod was installed above where the door should have been. Why? The answer was lame - something about "some people like a curtain and a door." Uh huh. Yeah, right. The master bathroom has a separate shower and a garden tub. No door there either. No reason why, except to say it goes on last. (ummm - I am down to the last week and walk through - so that made no sense) After the final walk through, I discovered that they made a mistake - the subcontractors forgot to reinforce the shower door areas before fitting in the shower stall assembly. They had to tear out the caulked-in shower infrastructure and reinforce the door area. They just didn't want me to know or see that they had made a mistake - and the drywallers had to come back in and make it visually aesthetic. Which by the way, the second time around is never as nice as the first time.

What floor plan are you considering? Are you contemplating a two story?
In some of the two story homes, I could hear from downstairs, the person upstairs walking around. Not a big deal, but squeaky creaking boards when new probably means it will be even noisier as it ages. Plus, I didn't want to go up and down stairs for years to come. So, I chose the one-level model. Not sure how you will like going up and down stairs frequently? Try going up and down repeatedly in the model -- and see if it suits. Who would think to have one person upstairs and the other downstairs to see how it sounds to hear traffic above the first floor? If your knees or back are problematic, within a few years, you may regret your decision to have a two-story floor plan - just because it afforded you more square footage for the same price as the [smaller floor plan] one story home.

Do you have a china cabinet? (sometimes referred to as a hutch)
If you do, and the only place it will fit is in your dining room, be sure to ask (before the framing process is completed) where the cold air return and thermostat will be located. In my model for instance, the only place my china cabinet would fit -- is right where they mounted the thermostat! If I not caught that - and had them move it over a foot to the next stud, I would NOT have been able to have my china cabinet there - and it would have been wasted space for me. Those are things that the builder will work with you on - especially if it doesn't really matter to the design if it is relocated. I almost missed that one. After the fact, the heating & cooling company said that it would have thrown off the thermostat to have it located above the cold air return, like they originally had it.

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Summary:

The builder is there to build it fast and profit. Period.
Anything beyond that -costs them money. Delayed closing schedules and repairing poor workmanship (if discovered) runs the builder over-budget. Their people often ignore and on occasion, even cover-up botches in order to move those houses quickly to close. Remember: the superintendent gets a bonus if he only reports a maximum of 7-10 repair requests on the final walk through before closing process.

Don't trust the builder to take care of everything.
Some tract home builders will assure that you should relax because you are building with them - do so and you are likely to regret it. Be prepared to protect yourself by documenting and fully observing the entire building process.

Get a good inspector.
Also, be aware that ANYONE can take an accredited class and bill themselves as an "inspector." Ask for credentials, references, review their website, etc. An inspector who takes digital photos, makes recorded notes and creates a file report (like MS WORD) with photos and narrative is superb. They are hard to find, but well worth the time and money. You will have a permanent record for years later, in the event you need to refer back for litigation or for construction upgrades.

After you close, their liability decreases under the warranty.
Get everything checked thoroughly before you close and sign the final contract.
Being on the other side of the unsigned contract is definitely the right place to be, when there are problems.
It is easier to get them to work with you before the sale, than after the sale.