If you've been thinking about buying a house, I say go ahead and do it. Mortgage interest rates are shockingly low, between 6 and 7 percent. Better yet - if you're a buyer - local house prices are flat. Right now, you can buy a house for rent money. This is probably the best chance you'll ever have to buy a good house for cheap.
Even so, don't get all giddy and do something goofy, like driving into a new development, running into the model house, and signing a deal on the spot. That's the kind of thing that'll get you on TV, whining to a reporter about how your dream house is all flimsy and leaky, and nobody will fix it.
If you're going new-house shopping, here's the first thing you do: Get your very own real estate agent, to look out for your interests. It's not that the friendly sales staff in the model homes aren't good people, it's just that they're duty bound to sell you a house that their bosses built, whether it's good or bad. Also, there's this: You could probably get yourself abducted by space aliens quicker than you could find a real enough house expert at a model home. Bless their hearts, the salesfolk don't know what happens if the subfloor gets left out in the rain, then gets covered up with vinyl. They can't tell you whether or not the backhoe driver screwed up the finish grade. That's not their job. Their job is to make you feel good about buying their product. When you break it down, it's just like a big Amway party, except there's more money involved.
The next thing you need to know is that buying a new house is adversarial. When you peel away all the happy talk, it's you against the owner, who is also the builder. It won't seem that way, because the salesfolk will be pouring you coffee, bringing you cookies, complimenting your adorable children, and telling you how smart you are for choosing their award-winning home. You're going to hear all about their warranties, and their service after the sale. This is where you need to be wary, maybe even a little bit cynical. "The builder is no more your friend than the state-appointed psychiatrist is your friend," says smarty-pants lawyer Jean Harrison. "Anybody who doesn't believe that can go to the courthouse and look at my filings." At any given time, Harrison has a few clients who've been ripped off, lied to and generally abused by builders.
Which brings me to this: Before you sign a contract to buy a new house, hire a lawyer. Those contracts are not take-it-or-leave-it deals. Your lawyer should be able to swing some things in your favor. For instance, most new-house contracts require that any disputes go straight to arbitration. That's good for the builder, not so good for the buyer. If you get in a dispute over the color of the carpet, arbitration's fine. But if the builder screws up your house so it leaks, rots, and fills up with toxic mold, you'd be better off in front of a judge or jury.
Your lawyer would probably want to adjust the details of the builder's warranty. Most new-house warranties, if you read them closely, guarantee little more than a house that's not in danger of immediate collapse. If a house cracks because of a structural problem, a typical warranty would only require the builder to patch the crack, not fix the structural problem.
If I were buying a new house, I'd want a guarantee that the house will conform with the building code. If the house didn't conform, I'd want a guarantee that the builder would make it conform.
I know, I know. The local code inspectors are supposed to make sure that new houses conform with the building code. Well, I'm sorry to say, that ain't happening. Builders are quick to point out - truthfully - that their new houses have passed all their codes inspections. Well, shoot, they all pass. You can't move into a house unless it passes. But I'm here to tell you, they don't conform. In our little home inspection business, we haven't found many that were even close. Now you might be wondering, What are the code inspectors missing? The answers would fill up a fair-sized book, but mostly, the code inspectors are letting the builders slide on water-intrusion details. Coincidentally, most water-intrusion problems don't show up until after the builder's warranties run out. That's good if you're a builder, bad if you're a buyer.
One more thing: Hire a pro to inspect the house before you buy it. Do not rely on the comforting words of the salesfolk and building superintendent, and do not bring in your carpenter brother-in-law to do your inspection. That is the express lane to hell. If your home inspector finds problems with your new house - particularly code violations - you might just be able to get some things fixed before you close.
"Buyers should keep in mind," Harrison says, "the builders need you more than you need them." I suspect she's right. The shelf life of a buyer is longer than the shelf life of a new house.
Still, with the market the way it is, I wouldn't wait too long.
Walter Jowers is filling in for the vacationing Lissa Sims.