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Beware when buying new construction
Old 05-13-2009, 06:44 PM   #1
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Beware when buying new construction

Wife is a realestate agent here in PA. What she tells me at this time
is if you buy new construction you cannot get mechanics lien insurance
from the title company. The insurance companies are not issuing the coverage, due to builders going under. This may be going on in other
states, dont know. But what is happening, wife knows of several cases where the people settled on the house, the next thing you know is that
they get a letter with a lien on the house from some unpaid mechanic.
Not the mechanics fault the builders are not paying them.
Just thought I would pass this along, just in case you know anyone who
intends buy new construction, watch out.
Old Mike
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Old 05-13-2009, 10:17 PM   #2
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There are time frames for filing a mechanic's lien. This is a time to have a LOCAL real estate lawyer on your team. That attorney should know who the usual and customary materials providers are in your area, the scuttlebut in the community about the builder. Go down to the building department and look through the permit file. BTW, passing an inspection does not mean that the work was done well.

There are other reasons, IMHO, not to buy new construction. The quality of the work is uncertian and a builder's 'warantee' is worth zilch if the builder is out of business or the house lender owned.
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Old 05-14-2009, 07:21 AM   #3
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There are other reasons, IMHO, not to buy new construction. The quality of the work is uncertian and a builder's 'warantee' is worth zilch if the builder is out of business or the house lender owned.
Last week I read an article somewhere about Chinese drywall being used in new $500K condos in Florida - they were a few cents cheaper per panel. Now, some units are uninhabitable because there is a sulfur smell coming out of them and they wreck all metals nearby (wiring, jewelry, silverware).

I knew a RE agent who told me "I would never buy a new condo". Now I'm beginning to see why.
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Old 05-14-2009, 10:06 AM   #4
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Add to that list condos in converted buildings. I would wait until a building is 10 years old, that is when construction defects are usually known.

Husband and I have finally made the emotional committment to sell our home and move close to grandchildren. There are exactly two buildings with units that I would consider. One was built in the late 50's (and the entry looks it) BUT it is very well maintained because it's board has a long term view of maintance and enforces their covanants - one local calls it "Mother may I" (but her building doesn't to that and has issues). The other was built in the 70s and has historically commanded a premium sales price, hence higher property taxes. When I push the numbers the oldest building looks looks like the smart move.
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Old 05-14-2009, 10:20 AM   #5
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Last week I read an article somewhere about Chinese drywall being used in new $500K condos in Florida - they were a few cents cheaper per panel. Now, some units are uninhabitable because there is a sulfur smell coming out of them and they wreck all metals nearby (wiring, jewelry, silverware).

I knew a RE agent who told me "I would never buy a new condo". Now I'm beginning to see why.
The drywall from China was used during the construction boom a couple years. The drywall was made using formaldehyde as I understand. It is giving off odor making the structure uninhabitibal. Not only that but apparently it is causing copper piping and wiring to detiorate. I forget the builders involved in this but there is a law suit filed in Tampa that is coming before the bench shortly. Last I heard was that one builder is gutting their houses and rebuilding the interiors. Don't know where all this will lead but its a real fiasco.
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Old 05-14-2009, 01:35 PM   #6
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Quote:
Originally Posted by mf15 View Post
Just thought I would pass this along, just in case you know anyone who
intends buy new construction, watch out.
Old Mike
Thanks for the advice!
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Old 05-14-2009, 03:20 PM   #7
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Husband and I have finally made the emotional committment to sell our home and move close to grandchildren. There are exactly two buildings with units that I would consider. One was built in the late 50's (and the entry looks it) BUT it is very well maintained because it's board has a long term view of maintance and enforces their covanants - one local calls it "Mother may I" (but her building doesn't to that and has issues). The other was built in the 70s and has historically commanded a premium sales price, hence higher property taxes. When I push the numbers the oldest building looks looks like the smart move.
Problem with older buildings is expectation of a special assessment - ones around me range from about $7K to $40K PER UNIT.

IMO, there are a lot of thorny issues with condos, such as, is property management licensed with the state, does the BOD have free and fair elections, is there an audit done of the books once every 2 years that is made public. I would also recommend buying in a complex with at least 100 units, that is, so competent members of the board may rise to the top and, if there is a special assessment needed (for roofs or whatever), the cost can be split among many owners.

I would also buy a condo that is the same price or more than a single family home in the same area - folks are there because they want to be, not because they can't afford anything else (and then they're angry and noisy).

I love living in my condo, have a nice social life (happy hour!) and would recommend asking these kinds of questions.
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Old 05-14-2009, 03:24 PM   #8
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Add to that list condos in converted buildings. I would wait until a building is 10 years old, that is when construction defects are usually known.

Husband and I have finally made the emotional committment to sell our home and move close to grandchildren. There are exactly two buildings with units that I would consider. One was built in the late 50's (and the entry looks it) BUT it is very well maintained because it's board has a long term view of maintance and enforces their covanants - one local calls it "Mother may I" (but her building doesn't to that and has issues). The other was built in the 70s and has historically commanded a premium sales price, hence higher property taxes. When I push the numbers the oldest building looks looks like the smart move.
How do you feel about wiring, plumbing and insulation in these older buildings? How about asbestos?

I like older building esthetically, but I wonder about all the above issues.

Ha
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Old 05-14-2009, 03:41 PM   #9
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The rentals I bought that were built in the 70s and 80s are better built overall than the flips I sold that were built in the 90s and 2000s. Most of the newer homes had issues with the argon gas leaking out of the window panes and fogging up. Lots of cheap material that wouldn't last 30 years like the 70s homes.
I wouldn't buy a new home. Our neighbor has had so many AC/plumbing issues with their house and it's only 3 years old. The builders are throwing up houses in our neighborhood in about 3 months. A lot of short cuts.
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Old 05-14-2009, 04:37 PM   #10
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The oldest condo completely replaced its plumbing about 10 years ago, the engineering firm featured the project on it's website. The building wiring as far as the distribution box on each floor is up to date (replaced that too). The condition of the wiring of each unit will depend on what the owner has done. It is large enough to have on-site maintenance. If the owner has an issue they fix it for the cost of materials. All remodeling that involves electrical or plumbing must be done under a building permit in the name of the building.

Ah, no pets, period.

Not for everyone to be sure, but for an older (not quite elderly) couple ..

Oh yes, the comment about condos that sell for the surrounding single family dwellings... that describes the other option when relative square footage is accounted for.
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Old 05-14-2009, 10:56 PM   #11
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Thanks for the helpful comments.

Ha
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Old 05-17-2009, 01:35 PM   #12
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Was at the lake a couple weeks ago ... my neighbor had roofers working his 3 yo roof (we built together ... YIKES!). Turns out they "ran out" off tar paper. And didn't use lead to seal the chimney. Nasty leakage around the chimney ... running all the way to the ground floor. Now MOLD in the wall cavity on the ground floor. Tried to make an insurance claim ... was told it's a legacy problem "sue the builder".

Keeping my finger - and toes crossed - no leaks yet.
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Old 05-17-2009, 04:52 PM   #13
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A little OT, but I went to an open house today - a cute house near the beach all renovated. The next door neighbor has two ROOSTERS and a penchant for flying flags (like the Japanese flag on July 4th).
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