Name almost any list for the hottest market and Austin is near the top, if not number one. Just like during the early 1980s, this attracts home builders and contractors from all over the country.  Some will no doubt have staying power, but many will not.  So what does that mean for the consumer?

When considering builders, I urge clients to consider two important factors before committing.  First, how good is the builder’s product?

New housing is in the pipeline in many areas surrounding Austin.  As during the early 1980s, we have and will continue to see an influx of new or out-of-town builders.  Having seen the results of such a trend back in the 80s, I caution buyers to do their homework when choosing a home builder.  in particular, I urge clients to focus on two primary areas of concern.  First, it is vital to understand the quality of the builder’s product.  A model home may not remotely reflect the workmanship or materials used in the builder’s other homes.  When I used to evaluate builder applicants for a local warranty company, I wanted to see some of the builders’ homes while in various stages of progress so that I could determine the following:

• Quality of materials and workmanship
• Degree of on-site supervision
• Is the jobsite neat and organized?
• Is work was being done in the correct sequence?

A stalled job is often a sign of financial problems, as is a clear drop off in the quality of subcontractors.

The second area of concern is the one most ignored during good economic times . . .  how is their service after the sale?  Today’s younger buyers have not experienced a severe economic downturn and few have given much thought to the longevity of their chosen home builder.  Some of today’s buyers are going to be shocked in a few years when they cannot find a trace of the firm that built their home.  Once a builder is under serious consideration, buyers would be wise to contact a reasonable number of their past customers to find out if they have been satisfied with the builder’s efforts before and after the sale.

Typically, the builder is responsible for all materials and workmanship the first year.  The second year the builder is responsible for “systems” and structural.  Finally, the builder is responsible for major structural defects for years three through ten.  The final eight years is where I have seen the most disputes.  What the homeowner may believe to be a structural defect, seldom rises to the accepted level of a “major” structural problem.

While far from the perfect solution, I suggest buyers attempt to obtain from the builder a written ten-year warranty from a strong national home warranty company. Hopefully the warranty company will still be in business even if the builder goes away.

Jeff Stewart, CCIM

PLEASE READ: Texas law requires all real estate licensees provide the following Information About Brokerage Services (IABS) to prospective buyers, tenants, sellers and landlords. To review document click on this link: IABS

Stanberry & Associates, REALTORS

jstewart@stanberry.com