When neighbors in an Upper Northwest development of $100,000 houses got frustrated enough over repairs they wanted, they sued the developer for $1.2 million. One of their allegations was that the developer had failed "to properly construct" their street.
Despite two years of discussions with District officials, of which they kept no written record, the new home owners had failed to find out that the developer was not responsible for paving or improving streets. And, according to David Kessler, chief of the Department of Transportation's public space and permits branch, the city requires written notification so that paving can be budgeted--a process likely to need two years' lead time.
Problems such as this often can be avoided with better planning.
"I don't know a perfect house that has ever been built," says Bob Johnson, executive vice president of the Northern Virginia Home Builders Association. But by taking precautions and being aware of remedies, buyers of new homes can protect both their investment and peace of mind.
Self-protection should start well before settlement. This may sound only logical, but Benny L. Kass, a real estate lawyer in the District, says "half my clients call me up and ask if I can help after settlement."
Help--free help--is available from city and county consumer affairs departments in the form of booklets on home buying. The U.S. Department of Housing and Urban Development also has booklets, including "Wise Home Buying." Once the initial reading is done, buying a house properly involves legwork.
Linda Kelleher, director of consumer affairs for the National Association of Home Builders here, says "when you're buying a house, you're buying a builder, too. . . . You must shop around for the builder as much as for the product."
She suggests driving to another development by your prospective builder and knocking on doors or asking people in the street how the builder treated them. It is also important before buying to ascertain what the warranties are, who handles customer service and, especially in the case of working couples, whether such service is available on weekends, Kelleher says.
Another way to check is to call your local consumer affairs department or builders association. Eric Friedman, an investigator in Montgomery County's consumer affairs department, says that a prospective buyer can find out how many complaints have been registered against a builder and their disposition, but notes that, "When someone files a complaint, we've got one half the story."
Once you are satisfied that the builder is reliable, it is important to understand in detail what you are buying in terms of the house, obligations and warranties. People often are under pressure, perhaps to coordinate the sale of their old house with the purchase of a new one, but the rule is: Don't hurry.
Do you just love the park land that's out the back window? You had better check with your locality's planning department because it may be slated next for development. It also may not be maintained by the city or county but by the homeowners association, which would entail extra fees.
Jay Linard of the Fairfax County Comprehensive Planning Office says that people who buy a house on a dead-end street can be in for a shock when it is converted to a through street.
Mary Flynn, who runs the complaint division of the Fairfax County Building Inspections Department, says "if there's one thing I could advise homeowners to do, it's to check on the topography before buying the house. The topography is not always going to be the way it is in the sales plan."
Buyers often will look at a plan in the sales office and envision a flat yard, Flynn says. When it turns out to have a 2-to-1 grade more suitable for downhill skiing than catch, it's a "severe disappointment," she says. "They come to us and say they didn't anticipate this."
Consumerists and those involved in house sales all stress that the buyer get in writing any changes or improvements promised by the builder.
The buyer can hire a private inspector--Friedman suggests choosing from among the builders listed in the Yellow Pages under American Society of Home Inspectors--to assess the house's structure. According to Tina McKay, assistant manager for B.F. Saul Co.'s Chevy Chase branch, the seller often pays for such a report.
A mortgage lender's structural appraisal is generally not a substitute for the buyer's. "We're just looking to see that the valuationis there to cover our loan," says Dick Corrigan, vice president of the Home Federal Savings and Loan Association in the District.
Another move that is strongly advised is getting a contingency provision in the sales contract that will let the buyer get out of the deal should the builder fail to meet the criteria. Money to cover repairs also can be put into escrow until the builder completes the work. As an alternative, Mary Ann Shurtz, coordinator of the Virginia Office of Consumer Affairs, suggests a provision for month-to-month rental until problems are cleared up.
Before settlement, a walk-through is customary where the buyer can point out neccessary repairs or improvements to the builder. It's a good time to check whether the house has an occupancy permit.
Usually found by the furnace or fuse box, the occupancy permit "means the county has checked out all the electricity, plumbing, and everything's in fine working order," Shurtz says. "If you do not have the permit and you waive that right then it's very questionalbe whether you'll get . . . the builder to do[the work, and]the county could actually make you move out."
When you've finally got your prospective house in order, there's the paper work to attend to
"Generally people haven't read their documents, particularly their warranty documents," says Dorothy Verrilli, regional administrator of the Home Owners Warranty Corp. in Montgomery County. "People think that they're covered when They're not," for instance when grass doesn't grow or trees die. That would have to be just between the builder and the buyer."
Although consumer advisors differ on the neccessity of hiring a lawyer, they agree that the buyer should be comfortable and fully familiar with the sales contract and warranties. At settlement, the builders lawyer will not be looking out for the buyer's interests and therefore cannot be looked to for advice.