Some of These Builders Are Crooks

[Terrel L. Shields]

And city inspectors are incompetent if they miss a lot of these things.

 

[ucbruin]

Back in the early '90s my coworker purchased a newly build condo from a builder while her master carpenter boyfriend was out of state....
Once he came back and saw the unit, he said to me that his girlfriend bought a brand new fixer upper....

 

[Terrel L. Shields]

I've seen some shoddy work and I've seen good work. But some things are inexcusable. And should be caught on inspection. Appraisers doing final walk thru's need to be alert to flawed work. I've seen broken floor tiles, poor fitting tiles, rooms with mirrors where you had to do some measuring to see one corner was 7'10" high and the other corner was 7' 8.5" high. Our local city inspector was one of my high school classmates and was a plumber and AC guy years before he went to work for the city. It was hard to slip anything past him. He had to retire and is now dying of brain cancer. I don't know the new inspector but Dave replaced a long time electrician and carpenter who was equally good.

I was by a Horton project and noticed that several pieces of siding on one house was seriously buckled. These were built only last year.

 

[Surf Cat]

It's not just fast and cheap in appraising.....

I always see south of the border crews pulling up in their beat up trucks and vans (obviously insured) to the new construction projects in my neighborhood. Cheap labor is what everyone wants....

 

[RCA]

And city inspectors are incompetent if they miss a lot of these things.

And this presents a problem to appraisers when they are made aware of such defects: How do you discount for the value of the property? After all, it might be the case that the typical buyer in the market doesn't know to look for or be concerned about such defects. On the one hand you are after "market reaction." On the other hand, your SOW definition of "Market Value" presumes knowledgeable buyers and sellers.

So ....

1. Most buyers if made aware of such defects will choose a home without defects over one with defects, all other things being equal. Unfortunately you probably don't have this information for all of your comps. Yes, look at the MLS listing, and maybe perhaps the agent put in disclosures that admit to the defects. Also call the agent and ask if there were defects that the owner was aware of before he signed the contract, and whether such defects, if they existed, influenced the buyers decision.

2. You are probably left with a cost to cure and an "estimate" of market reaction to that, under the assumption the buyer or potential buyer knows the dirty details and is conscientious, i.e. cares, ---> or even has a choice to buy another competing property without such defects. This is why a good appraiser needs to know enough about construction and associated building codes and regulations, to estimate the effort needed to fix the problems, and the approximate costs.

 

[ucbruin]

Workmanship is not part of the appraiser's job description....

 

[Surf Cat]

And this presents a problem to appraisers when they are made aware of such defects

It's been my experience that realtors, and/or borrowers do their very best to hide said defects from the appraiser.

This is why a good appraiser needs to know enough about construction and associated building codes and regulations, to estimate the effort needed to fix the problems, and the approximate costs.

That's on building and home inspectors..... sure, I can call out the obvious. But I'm not going to go digging for it. First, that's not our role and secondly we're just not paid enough. Third, lenders don't really seem to be too worried about it as they're sending out Uber drivers to do property data collecting.

Buyer beware.... everything can't be on the Appraiser's shoulders.

 

[J Grant]

I've seen some shoddy work and I've seen good work. But some things are inexcusable. And should be caught on inspection. Appraisers doing final walk thru's need to be alert to flawed work. I've seen broken floor tiles, poor fitting tiles, rooms with mirrors where you had to do some measuring to see one corner was 7'10" high and the other corner was 7' 8.5" high. Our local city inspector was one of my high school classmates and was a plumber and AC guy years before he went to work for the city. It was hard to slip anything past him. He had to retire and is now dying of brain cancer. I don't know the new inspector but Dave replaced a long time electrician and carpenter who was equally good.

I was by a Horton project and noticed that several pieces of siding on one house was seriously buckled. These were built only last year.

The final 1004 D home inspection is to see if it is complete, not to see if it is perfect. If the builder offers shoddy workmanship, ,not our problem. We compared to other sales in the community with same workmanship or similar comps of Q4.

If I see a repair issue or a portion not finished on final inspection, I will mark that up of course.

BTW, lenders are allowing homeowners to check off their own box now with a photo that something is finished or repaired. They are no longer asking for a 1004 D in many cases. The lending requirements for properties, or who is allowed to do parts of a valuation and getting more and more lenient, while appraiser /appraisal expectations and requirements become more onerous and draconian,

 

[RCA]

It's been my experience that realtors, and/or borrowers do their very best to hide said defects from the appraiser.


That's on building and home inspectors..... sure, I can call out the obvious. But I'm not going to go digging for it. First, that's not our role and secondly we're just not paid enough. Third, lenders don't really seem to be too worried about it as they're sending out Uber drivers to do property data collecting.

Buyer beware.... everything can't be on the Appraiser's shoulders.

You are in California and should know, that most sales agents are scared to death of not disclosing significant defects - the type agents often get sued for not disclosing, such as windows that leak during heavy rains. However, some defects are just aesthetic and minor. They also run into problems from potential buyers if the the MLS photos do not show realistic colors are are touched up. So most competent Real Estate Photographers are in the habit of taking all photographs under pure white flash light.

-- There is very real danger here. I like to think of the owner-builder who never got through final inspection because he had put 14-gauge wire in the kitchen, where 12-guage is required. That is a safety violation --- a fire hazard. - You could probably discover this just by pulling some receptacle cover to look at the wiring.

 

[J Grant]

It's a requirement in FL that an owner disclose known defects, and a RE agent can not hide a defect they know about. Most builders offer a one-year or town-year home warranty with a new home. If a defect or health/safety hazard is uncovered at some later point, owners often sue the builder for it.