Do I Really Need an Inspection of My Newly Built House?

Inspection contingencies and newly constructed homes.

If you're buying a newly constructed home, it's important to negotiate a "final inspection" contingency, allowing you to bring in a professional to approve the completion of the house before closing. Why? Because even in a brand-new home, unpleasant surprises can be lurking. Legions of new-home buyers have discovered unfinished construction or major defects before moving in or even after, such as:

  • improper weather detailing around doors or improperly installed siding (causing leaks)
  • poorly graded land or faulty sewer connections (causing flooding)
  • blocked vents in the kitchen (leading to mold and moisture problems), and
  • building code violations, such as ungrounded electrical outlets.

A professional inspector can turn up these sorts of problems and more, allowing them to be dealt with before they grow in scope or cause surrounding damage. Below, we'll discuss what to do if such problems turn up.

Dealing With Defects Found at the Final Inspection of Your New House

Ideally, you will have had your new house inspected at various points during its construction, such as when the foundation was poured and when the framing was completed. Nevertheless, the final inspection could uncover problems with your new house.

If this happens, you have several options:

Delay the closing. This is your most obvious choice, allowing time for the work to be redone or completed. It could, however, be impossible if you've already left your old dwelling and arranged to move.

Go ahead with the closing, but have the developer put aside money to make the repairs. If you go this route, insist on a written agreement saying that the money needed to complete your house will be taken from the purchase price and put into a trust account, which the developer can't touch until the work is done. To protect yourself, add new deadlines to this agreement and state that if the work isn't done by these deadlines, the money must be returned to you. You can then hire outside contractors to finish the job. Get an attorney's help drafting an addendum to your agreement.

Make a list of the remaining tasks, assign each a completion date, and insist that the developer sign it before you agree to close. If you can't get your developer to delay the closing or set up a trust account to finance the repairs, this type of "punch list" could be your only option. It's a common approach industry-wide. Unfortunately, it means you'll have to chase down the developer to get the work done.

Dealing With Defects Found After You Move Into a New House

Some problems, such as flooding in the basement or a mold problem, might not surface until after you've moved in. If that happens, check to see whether the builder's warranty (typical with new homes) will provides coverage. For details, see New Home Defects: Holding Your Builder Responsible Under a Warranty.

Resources on New Homes

For a detailed guide to buying a new house, preparing a purchase contract, arranging inspections, and more, see Nolo's Essential Guide to Buying Your First Home, by Ilona Bray and Ann O'Connell.

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