Well, they're at it again, the bad builders are behaving badly
and we've got some stories to share with you.
Hello everyone. This is Chris Morton real estate broker with EXP Realty in Raleigh,
North Carolina and we've done stories in the past about builders that behave badly.
Giving you some real horror stories. Well, we've got some more to share with you now, and
these as always are not meant to entertain. They're more cautionary tales. So if you
decide to build a house, you'll know what to look out for, and hopefully what builders to avoid.
Again, this is not about saying that all builders are bad. There's some very,
very good builders out there. And this is just to say, there's some bad builders and just
watch out for these signs. And if you stay into the end, we're also going to give you some tips
on how to avoid those builders. What you need to do if you get yourself into a bad situation,
just general things you can do to help yourself out.
So let's start first with a really, really sad story. It's been circulating around lately,
courtesy of the local triangle, ABC news affiliate. They detailed a story about a
builder out of Sanford, North Carolina that has done really bad things to some people.
Basically this builder has been promising to build the folks, some nice homes, and they
just really haven't delivered. Stephanie Hayden was a buyer that was interviewed by ABC news
that had contracted with this builder to build her dream home. They signed the paperwork and
got started back in June of 2021, but it wasn't until January of 2022, before the foundation got
started. That's insane that it took that long and framing didn't get started until February of 2022.
We're now here in May of 2022, and the framing has not even been finished. The house is nowhere
near getting done. It's just a really, really bad situation. Her husband had been deployed.
And so the hope was that everything was gonna get done so they could move into their new house in
April. This being May, and there's no way in the world, they don't even have walls up so their
definitely no way they’re going to move in and to make matters worse, they made a huge mistake
beyond staying with this builder to the point of no return. They made a huge mistake in that they
sold their current house. So now Stephanie, her husband, their son and their dog are living with
family until this home is eventually done. They're out $12,000 on a builder deposit. They're out
$80,000 for their construction loan. A portion of their construction loan that went to the builder
and to make matters even worse, the lumber company that supplied the lumber for the
house has put an $18,000 lean on this property because they haven't gotten paid.
And Stephanie and her family are not the only ones that have suffered. There's been
families all in a bunch of different towns that have been in the same situation where
this builder just hasn't done any work, has taken the money and is now even contemplating,
according to this news article, this builder's now contemplating bankruptcy, which will mean
these four families won't have any opportunity or any recourse. Hopefully our hearts are going
out to them, hopefully there'll be some resolution on this situation soon, terrible, terrible story.
My team and I have also been involved in some real horror stories in the last little bit,
that were two different builders with two different clients who both promised our clients,
that the homes were going get done by a certain time. And they didn't follow through with that.
The homes did not get completed in the time that the builders promised they were going to be done.
And so this is not outrageous, this is to be expected. There are delays.
Where the problem came in, is the builder did not communicate when they knew the homes weren't going
to be done. My buyers both gave up their rentals that they were in. Long term rentals while they
were waiting for their homes to be done. They gave up their rentals because they were anticipating
their new homes were going to be completed. They weren't completed on time. And so both sets of
buyers had to move into temporary Airbnb housing, which if you have ever experienced that over, say
a three week, one month, two month period, those get really, really expensive. And to make matters,
even worse the builders were not willing to compensate the buyers for the delays because
in the contract it says we can delay things due to whatever process and they had their easy out.
One of the builders did make good a little bit to
one of the buyers in that they gave them some closing costs to kind of placate them
at closing. I think it had a little something to do with the fact that I was calling every day
screaming and demanding that the home be done, maybe that had something to do with it.
Those were two really bad situations. They got done. The buyers are in the homes now. They're
okay, everything's fine. But it really put a financial toll on the buyers. And really there
was nothing they could do about it other than walk away and give up their builder deposits,
which were substantial money. So they builder basically had them over a barrel and the buyers
couldn't do anything about it other than just have me scream all the time, which I was happy to do.
And then just today, one of our buyer clients had a very disappointing thing happen with a
national builder that I'm not a fan of, that she has contracted to build her a town home.
We went in to meet the builder today to kind of go over things as the process was getting started
and the foundation was going in, all of that. And she discovered that her sliding glass door
that she was expecting was going to be part of this plan that we went and visited another
version of this house that was under construction and had the sliding glass door. She was expecting
that sliding glass door to be in. And the builder was going through the whole process and saying,
and this is your back door. It was a single glass operable door. And she said, wait,
we have a sliding glass door on this plan. What's going on here? Well, come to find out during
the whole process of her electronically signing everything she signed, she initialed a floor plan
that showed the single glass door, not the sliding glass door that we expected was going to be
put in with this particular plan. She was devastated, upset today. I was embarrassed
because I didn't catch it. It's one of those things that you would've kind of expected.
Everything was going to be the same because the builder sort of builds again, national builder.
They don't build anything custom. They just build, basically make a cookie cutter version of
this townhouse. And they switch to a single door because sliding glass doors are more expensive. So
rather than letting us know that in advance, they slipped it in. Didn't let us know. We should have,
I should have caught it. We should have caught it, but we didn't because we expected it was
going be the same house that they'd been building all of this time for months and months and months,
big shock this national builder that again, did I mention, I'm not a fan of, did a bait and switch.
So what can you learn from all of these stories? Well, the first thing and most important thing,
hire a buyer agent. In most instances, the builder is going to compensate that agent.
There may be a chance that you may have to pay a portion of that agent's compensation yourself
due to the fact that some of these builders are reducing compensation to the agents.
I suspect they're doing that to keep the agents out of the transaction and keep them out of their
model homes. So that agents like me don't make a big stink and a big fuss,
but that's neither here nor there. So you may have to do some compensating.
It is very much well worth it in general. Most of the time that agent is going to be a very strong
advocate for you. They're going to if needed call on a daily basis and scream at the builder
until they get the work done. They're going to be able to provide you a list of good builders,
who don't do things like what these horror stories I've told you about today. They're not going to do
those things to you. So the agent's going to be helpful in that regard. They're going to be able
to do review searches, to see if any of the builders have any suspicious things going on.
They're going to be able to, if they don't know about that builder, they're going be able to ask
their friends in the real estate industry. Hey, what do you know about XYZ builder? And they're
going to be able to report that back to you. So in many ways, they're going be an advocate to you.
They're also going to help you set up some very important inspections that are going to happen.
A pre drywall inspection and a final inspection just before your orientation with the builder.
These two inspections are going to go a long way to making sure you are buying a good house,
that's not going to come back and, and bite you in the butt later on. And at the very least,
it's gonna make it a lot easier for you to move into that home without any issues going on.
I distinctly remember, and I've shared on our channel here in the past, my client who had bought
a town home from a very good builder that we like very much. And unfortunately, the builder is only
as good as the subcontractors that do the work well. A plumber subcontractor, did not hook up
the plumbing line in the tub upstairs above the kitchen. The inspector thankfully did a test drive
of that tub like he should do and the ceiling started caving in from the second floor into
the first floor, big, giant puddle of water in the floor. My folks would have never known that until
they had moved into the home, had tried to take a bath or a shower in that tub and made a giant mess
downstairs. And then they would've had to get the builder back in to fix it.
It would've been a big hassle. They'd had to take time off work, on and on and on. And on this way,
it was all completed, fixed, buttoned up and made right by my buyer before closing. So
hire yourself a buyer agent. It'll be the best thing you can possibly do for yourself.
And the next tip we have for you remember the builder representative
does not work for you, they work for the builder. They are paid to be nice to you,
but they are not paid to advocate for you. Know that their job is to get the
most amount of money out of you they can and to represent the builder and they are going to
do nothing that will damage the builder's position in this transaction. Know that.
The next tip is to always review your contract with the builder very carefully before you
sign it. There may very well be some hidden things in that contract such as, and this is
a true story, a builder has the right to build your home and take up to two years to do so.
How many people do you know you can wait two years for their new home to be built?
I don't know anyone, so know to look through those contracts very, very carefully. They are slanted
and written for the builder. Some of them are written with extreme legalese that makes it very
difficult for you to understand what's going on. Yet another reason to have a buyer agent
represent you, who can read through that, decode it and translate from builder-ese language to
layman's terms language, and help get you through that process. Read your contract.
The next tip review over that floor plan very, very carefully. Make sure everything that you
were promised is on that floor plan. Such that you know how that home is going to be built, what is
supposed to be in that home prior to them getting started. I feel terrible for my client. Hopefully
we're going to get some resolution and hopefully the builder's going to make good by her. I don't
have any faith in that, but hopefully that's going to be the case with that sliding door. But
know to look over the floor plan, you shouldn't have to do that with a fine tooth come, but use
this as a learning lesson that we all should go over those floor plans with a fine tooth.
Next tip, never, ever, ever sell your home your current home until you've at least gotten to the
drywall stage of your new home. So when you've had that pre-drywall inspection with the builder,
with your inspector I should say, before you have a meeting with the builder to go over
the whole process of where things stand before they put the drywall up. Before they put your
walls up. That meeting with the builder is a great time to have the conversation,
when do you expect this home will be done approximately not officially to a day.
When do you expect it so that I can put my home on the market. You're looking at generally 75 days,
90 days, from that drywall meeting with the builder to the point that your home should
be done. Unless you're in a luxury home, it's going to take a couple months longer beyond that,
but that should give you a good idea of when you should put your home on the market so that you can
time it so that you are not like my poor clients, homeless and having to rent in
an Airbnb that's super expensive. Or like Stephanie, the client of the Sanford builder
who's having to live with family. That's not what you want to have happen.
Do not sell your home until you're absolutely sure when your new home is going to be complete.
Make sure you check online reviews of these builders. See what other people
are saying. If other people have had horror stories with this builder,
do not think it's going to be fine. They were just outliers. No, do not think that. Run,
run, run, away from that builder. There are plenty of other really good builders out there.
Your agent can help you find them. Avoid the bad builders with the bad reviews and make sure
you check the North Carolina licensing board for general contractors. Check to see if there's any
complaints on that builder. Check to see if they've done anything that was kind of slimy
that had been reported to that licensing bureau because that is definitely a place where you can
go to see some accurate information on a builder. So we hope this information has been helpful.
If you are contemplating a move either into or out of the Raleigh triangle real estate market,
my team, and I would love to be your agents of choice. You can contact us by clicking
on the link in the description below or emailing us at hello@mortonbradbury.com,
please like, and subscribe this video if you haven't already done. So,
and we'll see you on the next one. Take care, bye bye.