If you’re buying new construction in Seattle, then it’s important for you to know that new construction is not perfect. There may be repairs that need to be made prior to closing (read more about this here!), and in an ideal world, everything is in tip-top shape and all of the promised repairs have been made.
Unfortunately, sometimes the builders aren’t in a hurry to get the things on our list taken care of. In our experience, we know that part of making sure that repairs get done includes working with a real estate agent who will be there AFTER closing. (We’re there until the very, very end for our clients, and most agents simply don’t do what we do!) Luckily for our buyers, we have a few tricks up our sleeves to make sure the builders get the work done:
We might delay closing until the work is done. However, this isn’t always a possibility due to the fact that sometimes the builder’s addendum might state that repairs needed after closing do not constitute a reason for delaying closing. If this is the case, we make a list of things we want done, and we get the builder to sign off and agree to the list with some type of consequence if they don’t.
If they don’t comply, builders know that their reputation may be at stake. It’s important to us that our network of realtors, industry professionals, clients, etc. all know which builders to avoid, and they can be sure that some bad publicity is headed their way.
Now, these situations don’t happen often—maybe just 1 out of 10 times. It’s important to us to get these issues squared away, and we’re there to work on it with you even after closing. (Sometimes it even takes a few months to get everything resolved.) 90% of the time, we get the builder to do everything we need. But when they’re still not resolving everything, here’s what we do next:
We assign a value to the repairs we want made. This amount will be under $5,000 of work, which means you can take it to small claims court. Builders know that the legal fees involved in this can outrun the actual work, and this will most likely get them to finally make the necessary repairs. (Suing someone is super expensive, so you definitely want to avoid this route!)
A Real Life Example
Recently some of our clients bought an absolutely gorgeous home, and the builder did an amazing job on the finish work. Our clients bought the home during the summer, and the house gave us no reason to pause. But when fall rolled around and it started raining, we realized that the flat roof with a roof deck wasn’t sloped properly, and the water wasn’t draining the way it should. The roof wasn’t leaking, but the water was just sitting up there.
We ended up having to work on this issue for 6 months before we finally threatened legal action for our clients. We told the builder that we were speaking with our attorneys and that we were going to write a blog series about the incident and similar incidents, naming him in particular. We asked the builder to please just communicate with us on the issue—and after having all of that information, he finally did respond.
It’s all working out now, but I shouldn’t have had to take it to that level. But this is why we want to get this information out there—these types of situations do occur, and we want homebuyers to understand the importance of being diligent. New construction does not mean it is free of issues!
What is a Builder’s Addendum?
With new construction, there is the builder’s addendum, and this supersedes the purchase contract. In other words, if there is contradictory information in the contract vs. the builder’s addendum, the BA is what is law. In the BA, there will be several scary sounding paragraphs of information, and some will say that you can sue (you have to go to arbitration), some will say that you can’t delay closing, some will elaborate on exactly what is covered by the builder’s warranty, etc.
However, even if the BA says that we can’t delay closing, you can still threaten it. At the end of the day, there is a certain amount of trouble that the builder wants to avoid, and there are reputation issues that a builder ALWAYS wants to avoid.