First Time Home Buyer Tips

 

CHAPTER 18
Why Buying a New Home is Different

New Homes For Sale

 Buying a new home requires more patience and flexibility. Pretty much when you buy a resale you know the close of escrow date, the Seller knows when they have to leave, and you know when to plan your move-in. None of this is true with a new home.

Here are just a few of the things that can lead to delayed closings.

Weather – In 1998 in Escondido, California the builder dug the trenches for the footings of 10 homes, put up the concrete forms and was ready to pour concrete the following day. Then it rained for two days. They let them dry out for four days. Then dug the trenches a little deeper, ready to pour the next day. Then it rained for three days. This pattern repeated over and over and 22 days later the footings were finally poured (and by the way, there is so much concrete there those houses will still be in the same spot 400 years from now.) Result – closing pushed out three weeks

Supplies and material – One year the number of homes being built, I think 2003, was so large that the drywall companies couldn’t keep up with production, though they  were running 24 hour shifts. This also resulted in the importation of poison drywall from China. Result – closings pushed out 2-6 weeks depending on who you knew and how much pressure you could put on the supplier to get drywall.

Labor – Union laborers have lower guidelines about when they can walk off the job. Production plumbers draw a circle on the slab and if a specific number of rain drops fall within the circle in a specific number of minutes they are to leave the job. Non-union laborers may choose to stay, regardless.

Workers and those who hire them – In a tight labor market, when many homes are being built simultaneously, an entire crew may be pulled from a job. This usually happens when someone down the street is behind schedule and goes to the owner or foreman and says, “I will pay you double if you come finish painting my 10 houses on Tuesday and Wednesday.”

Individual workers – they tend to call in sick more around the holidays when times are good. And of course sometimes they really are sick. A family emergency, often in a different state or even a different country will pull them off the job. This maybe a weeks-long absence instead of a day or two.

Government – a city or county inspector can come on the job and do anything from disapproving a nailing pattern to shutting the entire project down. In conjunction with other elements this can be disastrous. In many parts of the country a construction site must now capture ALL runoff water to let it silt out before draining to the streams and rivers and ocean. An inspector coming onto the site can demand that the precautionary construction of catch pools and other filters is inadequate and shut down the project until it is complete. AND when the contractor has made the correction the inspector doesn’t come zipping back out to pat them on the back for a good job. It may be as much as a week before they are seen again.

Cash flow – if a company is just barely making their financial obligations, there may be points in time when they have to delay payments to a tradegroup. Suddenly the stucco application team doesn’t show up because they haven’t been paid for the last job they finished for the same company. Also, if there is a dispute about quality of work at one job, the contractor might hold off payment for that job, and then the tradegroup says, “Well if that is the case, we won’t finish this new job.”

Equipment failure – this is rare in home construction but can happen. The Westin Hotel in Denver was under construction and nearing completion. Six weeks before opening day, around which were planned festivities and the first of  several  large  conventions, the single man responsible for the construction of the beautiful cabinetry  known as the Front Desk and Lobby had his millwork machine break down. It had to be completely replaced or rebuilt; the latter would take several weeks. And the tradesman didn’t have the cash to buy the new machine. The hotel company had to loan him the money. In home construction there are usually competing companies that can jump in and supply things like, concrete pump trucks, stucco shooters, forklifts, trenching machines, etc. A subtler element of this problem is when the tradegroup says the delay will only be two days, then they say three, and before you know it a week or more has passed.

Etc. etc. etc. - In 2004 I was driving to work and almost went off the road when I saw the company that was doing our framing advertising for carpenters by dragging a banner behind an airplane. Made my blood run cold because I knew all of our closings on 12 projects would now be running late.

So for the long term you have to plan your close of escrow on two levels: the contract says level, and the what-if-it-is-delayed level. Don’t tell your Uncle Nick, a month in advance, to take a week off from his job in Portland to help you move in Cleveland. The odds that you will hit the dates right are low. Even short term, remember the city inspector has to pass the C of O (certificate of occupancy) during the final days of construction, the ability to predict can be off by several days with only a week to go.

For once in your life, this is a good time to be a renter. Families who are selling their home to move to another one usually coordinate the flow of money and their move to a tight one or two day schedule. As a renter you can create an overlap between your tenancy home and the new home and have both places at the same time. This will take a lot of pressure off your moving week (s). And if things slip, well, you have some cushion. If you want to do some custom painting or wall papering this will provide time for that as well.

You may think that no one cares about your move-in date. This is not true. The builder is losing money every day that the home cannot be delivered, a LOT of money. So, trust me, they are even more motivated than you are to deliver the home on time. Many of the delays are things that are out of their control. 

 

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About the author

Robert N. “Bob” Bekins is the Owner/Broker of North County Realty Associates headquartered in San Diego County, California. He has been a Sales Manager with major national home building companies, in international property sales, and in traditional resale. With over 1,000 homes transacted he is qualified to be a fine advocate for your needs in that part of California. You may reach him by texting or calling 760-505-9397 or at Bob@NorthCountyRealtyAssociates.com. Hope you have enjoyed the book and now Happy Hunting and may you live long and prosper in your new home!