Expert: Connie Wildasinn-Broker,GRI,Realtor® - 12/5/2008

Question
QUESTION: My husband and I decided to purchase a home at the beginning of the year. My mother set me up with a family friend whom is a wonderful real estate agent, and she recommended that we build. She is a builders agent. We were reluctant at first, but since they made it sound so great, we went for it. Now, I'll add here, that the builder just so happens to be our real estate agent's boyfriend. Okay, the house was built in about 2 months, and we moved in. The process went rather quickly, almost too quick according to my husband. Now that we have lived in our home for about 10 months now, many many things have been falling apart and cracking. For example, our bedroom door fell off its hinges, our kitchen cabinets are falling off the walls, our fireplace is cracking all over, and there is a huge crack going all the way across the garage(which is the foundation). We have tried to contact our builder many times concerning these problems, and he will never return our phone calls. We ended up having to contact our real estate agent just so we can get a response. My husband reminds me every day that it was just too good to be true. We both feel that our home is falling apart, and we haven't even lived there for a year! We are concerned that if we continue to stay, it will get worse, however i'm also concerned about the appreciation value. I want to know any advice you may have on our situation.  We want to make a correct decision, however, being that this is our first home, we just feel trapped at this point. We live in Georgia, and the housing market is not in a stable condition. We are wondering should we fix these problems and put our home up for sale? Financially, is this going to hurt us in the long run, or should we wait for the appreciation to build?

ANSWER: Hi Amanda,

I am so sorry to here that you are having this experience, your first home should be a joyous time!  I would advise you to find a real estate lawyer. It sounds like you have a number of construction issues that are in failure.  You didn't mention if you received a warranty with the home, most home builders give something in way of warranty, but since this does not sound like one of the big boys, KBHomes etc... you may be working with someone who has nothing... was he licensed and bonded? May be no, hence he has not returned your call, or perhaps he thinks if he doesn't answer you will 'go away' either way you need to get to the bottom of the issue and get these items corrected, or monies to compensate.  

Have you had a different contractor give you repair bids? I would get lined up all of my information so that you can start making your 'case' should this end up in court. Conversation logs, when you called, messages you left, all parties involved...  If you win, you may not get money today, but you can put a lien on him (the contractor) for years, it will be an up hill battle, but the dollar amount may be worth it.  But always try to settle out if you can... my experience the lawyers always get more in the end... so if you can find a way to settle ... move on with life...

The second thing I would do is contact the brokerage that your 'friend-agent' works for and let the broker know what is happening and that your 'agent' advised to build and 'use her boyfriend' ... when we as agents recommend friends and family it is always in our benefit to fully disclose to our clients, have them check reference separately, speak with the contact, and even get other bids to help the client make an informed decision... sometimes our personal contacts are the best available, sometimes not... and as a client... you should have the option to hire or not at will who you'd like...

Also I assume the city was around with inspectors during the construction? did the city sign off on all of the permits, did you get a final occupancy certificate?  Ask the city what your remedy is for shoddy work they approved.

I would seek legal council on this, I assume you spent a lot of good money for the home and now if it is becoming unlivable... that is unacceptable....

But get moving- in law time can make a difference...

On the fix and sell... you will need to disclose to a buyer any issues you are aware of that you are not remedying... so they can decide if they want to take on the issue...  if you fix everything and then sell, you would not necessary need to tell the buyer the issues, the issue is gone... although I would let them know all the 'remodeling' that was done to get the home on the market... buyer want to know ... and the more disclosure the better they feel later...  and make sure whoever does the work is licensed and bonded ... and if you do all the fixing, you will most likely just like to stay and enjoy the home... Let me know how it goes! Good luck with everything..



---------- FOLLOW-UP ----------

QUESTION: Thanks so much for your advice! We actually have a 1 year warranty, and I think that the builders goal was to have that run out. We actually have one of his "handymen" coming to our home on Monday. I'm not exactly sure how they will handle the issues that we have. And, I am not sure if this builder is licensed and bonded. That is something I will ask my real estate agent ASAP. We received a list of contacts from our builder at the time of closing (plumber, electrician, etc.) however the numbers are not working numbers. (??) The builder's son is responsible for the concrete and most of the building crews. Also, we were frequent visitors to our lot at the time of construction, and we never saw any city inspectors around. Only a county inspector came, and I believe they just put up the construction sign, and checked for mud in the road. I will be also checking on an occupancy certificate; I'm not exactly sure if that is mixed in with our closing documents.

We do want to sell our home, however if the problems can be fixed without coming back, then I believe we may feel better about it all. My husband contacted his personal lawyer, and we are waiting on his return call to seek legal advise. Thanks so much for all your help, and I will be sure to fill you in on our progress!

Answer
good to hear you are on top of it! I would be concerned that the numbers to the sub contractors are not working, that is a bad sign.. and the fact that another 'family' member the builder son... it seems to go on and on...

In California we have building inspectors, via each county... similar to your I am sure, although they may be call via a different name... all come from building and safety at City Hall... and on new construction there should have been a building permit, which you can pull right now at city hall and if you are occupying the property it should have a clearance (what every your area calls it) that allows a person to move in... it is cleared with the city so that they know you are moving into a safe building... Every state I believe uses the Universal Building Code... 'where each nail, screw, wood member, fiber board, piece of plumbing, and electrical outlet, etc is placed on a property) and signed off...

Keep in mind a warranty is only as good as the company / person behind it!

Don't be slack on this... time does matter... and you may want a second opinion from someone who comes with references... you have verified... as a second set of eyes... Good luck!