It’s a common belief that new build homes come free of defects. They were just made - right? They should be pretty perfect!
The reality, though, is that problems are all too common. Issues range from the minor and mundane - a window gets broken during construction, for example - to the extreme, like a shifting foundation.
“Normally, there shouldn't be many issues in new home inspections. Unfortunately, in an attempt to maximize profits and minimize expenses, property flippers and builders often take shortcuts that can introduce potential safety hazards,” explains Joel Comino, Founder & CEO of Next Modular.
During the height of the seller's market waiving the inspection contingency became commonplace - the tide has turned, however, and only 15% of buyers opted to do so in 2022.
If you’re buying a new home, here’s what you need to know.
One of the benefits of moving into a newly constructed home is that your home has usually been inspected both inside and out. Although requirements vary by municipality, typically both a foundation and pre-drywall inspection take place prior to the optional final home inspection (which takes place once construction is completed). This is the best and clearest look you will ever have into your home’s structure.
“During the building process, the city’s code compliance has checked out the home," notes Chad Eason, a Philadelphia-based Realtor. "There have been a lot of people looking at this and determining whether or not this house was built up to the safety standards and code that are both on the state level and national level.”
If your home is new, chances are it’s covered by a limited warranty for one to two years by the builder, which will help to mitigate any costs that arise from major issues. This warranty is often guaranteed by state law. So combined with the prior inspections, you aren't exactly throwing caution to the wind if you opt out of the final inspection.
Still, the warranty eventually ends, and general coverage may not include everything that can go wrong with your home.
The obvious benefit to not getting a new construction inspection is saving $500-$700, the cost of the inspection itself.
Whether or not you opt for an inspection depends on how useful it is to you to keep that money in your pocket, and how much peace of mind you’ll get from having an inspection - which is going to be different for each person.
Things can go wrong with a new home, though, and sometimes they do - here's what you might encounter.
So what can go wrong in a new home inspection - and why?
One reason for the problems: many people contribute to building a home. You may have chosen your builder because they have a great reputation, but they likely aren’t touching 100% of the project.
“Every builder uses subcontractors and because the subcontractors are so plentiful, it's hard to know that the builder that you trust - that name and that brand - is fully behind it. You don't know the names behind it that did the actual work," notes Eason.
Here's what a new home inspector might find:
According to a study conducted by Real Estate Witch, HVAC system issues, safety issues, and problems with finishes were the top three most common issues uncovered by new construction inspectors.
Why do so many new homes have HVAC issues if theirs was newly installed? For one, installation mistakes happen - and sometimes these mistakes go unnoticed if the home is finished in the spring and no one needs to turn on the heat for several months. In other cases, the HVAC unit may have been improperly cleaned during construction, trapping dirt and debris from various building projects inside.
“One of the most expensive fixes we encountered on a new build was an incorrect installation of the HVAC system. The contractor had not installed enough return air ducts, which caused imbalances in the airflow throughout the house,” recalls Comino.
Safety issues with new homes can range from the easily fixable (a lack of smoke alarms, for example) to the more concerning (radon gas, which requires radon remediation).
“A common safety issue that comes up on a new home inspection is the presence of carbon monoxide. Carbon monoxide is an odorless, colorless gas that can be deadly if inhaled in large amounts. It is important to have a carbon monoxide detector installed in the home to ensure the safety of the occupants,” explains Eric Lee, co-founder of real estate investment platform REIInsiders.com.
If there are mistakes with the construction itself, potentially dangerous conditions can arise.
“The worse issue I came across was a poorly constructed and secured balcony railing that, if not discovered during that inspection, would have certainly led to a serious accident for the new incoming family,” recalls Chris Matthias, DIY expert and founder of HouseAdorable.
Drainage is a potentially serious problem because if water pools around a house instead of flowing away from it, it can cause extensive damage to the home’s foundation and lead to other issues like mold and termites. Sometimes the fix can be simple (like adding downspout extenders) while other times the solution might be more complicated and expensive (like a drainage system in the basement).
“Drainage is probably the number one complaint I hear when performing warranty (11-month) inspections. The sides of houses where lot lines are tight can be difficult to design with good drainage in mind, so it is no wonder that many new home buyers have issues," warns Casey Callais, owner of Constructiva Realty Inspections.
There’s plenty of things that can cause water damage with a new build. If your home was flipped by someone who doesn’t have a ton of experience, for example, they might not realize that the shower has to be installed with waterproof wallboard or water-resistant glue in order to prevent water damage to the surrounding walls.
“Do a run all of your plumbing fixtures. So run your bathroom, your shower, your faucets all at the same time, both hot and cold water. Because a lot of times, they've never been tested. Let the pipes really clear out," recommends Eason.
He notes that finding issues during a new construction inspection can ultimately make life easier for you, regardless of whether the home is covered by warranty:
“A common issue is diverters - they switch the water from going to the faucet in the tub to the shower head. And sometimes when you pull that, it'll be broken, it'll spray water all behind the walls," he says. "If you catch that at an inspection, it's a lot better than if you catch it after you've moved in, and you've painted the walls, and you have your carpets down, and your rug that you just bought for $800.”
While you might associate structural problems with old homes, it remains a common issue with 32% of new builds.
Homebuyers hate foundation issues because the solutions to solve these issues can be both expensive and invasive. Unlike an issue with a hot water heater - which might set you back $600 - an issue with your foundation can set you back $10,000 (depending on the severity of the issue).
If the foundation was insufficiently reinforced, for example, it might not be able to fully support the weight of the house. Soil movement can also cause issues - as it moves, the foundation that rests on it shifts and cracks.
“The worst issue I have come across in a new build was a faulty foundation. The foundation was not properly installed and caused the entire structure to be unstable. This was a very expensive fix and required the entire foundation to be replaced,” explains Lee.
Hopefully the issues you’d encounter in a new build are more minor issues like a crack in the sheetrock around the exterior of the house, but if there was a foundation issue you’re going to want to know about it before closing on the house.
When doors and windows aren’t installed and/or sealed properly, a draft can result. Sometimes this can be a result of the windows not properly fitting in the opening - perhaps an incorrect measurement led to a mismatch in sizing. Sloppy painting and installation could also result in windows not opening and shutting properly, which is an issue that will come up in your inspection. If the builder was cutting corners, faulty materials can also be a culprit.
When asked about the most common problem he’s encountered in new home inspections, Chad revealed: “Broken windows. The glass broke somehow and the builder typically knows about it and that they need to get a new window, but it's going to be on backorder for like three months.”
You’ll have a new roof when you move in - a huge plus, considering that the average cost of a roof replacement is around $8,000. Like with anything, though, mistakes can happen, especially when you consider roof anatomy. If flashing is installed incorrectly, water can pool where it shouldn’t and potentially infiltrate your home. It’s also possible that the membrane underneath the roof - which is used to make low-sloped roofs waterproof - is improperly installed.
“The number one issue I see with roofs on new construction are improperly placed nails and damaged shingles. You can imagine that with thousands of nails driven into a roof, that there might be a few of them that get shot below the drip line of the shingles. And with enough people walking the roof during installation, there are often smudged or torn shingles. Both deficiencies have the potential to become bigger issues if moisture intrudes. That usually manifests itself well after the warranty has expired," warns Callais.
Electricity is a major component of your home, and there's a lot that can go wrong during the building process. Since it's not an old home, you're unlikely to find ungrounded outlets or knob and tube wiring. However, because so many different parts of the home are overlapping and being worked on at the same time, mistakes can definitely happen.
“The most expensive fix I have encountered in a new build was due to faulty wiring. The homeowner hadn't noticed any issues with the electrical when they purchased the home, but upon further inspection by an experienced electrician, it was revealed that there were several code violations and the entire electrical system needed to be replaced," says Alex Capozzolo, Co-Founder of SD House Guys. "This ended up costing thousands of dollars to repair."
Callais notes that this is a frequent problem in the homes they inspect.
"Issues with the electrical system are the most common safety issues that come up in new home inspections. It is not unusual for electricians to miss the ever-important GFCI protection at required locations," he explains. "The newer electrical code expanded the areas for protected circuits, and I often find outlets such as dryers and car chargers in the garage not GFCI protected."
He also points out that one small mistake can cause larger issues if it goes unnoticed.
"If the first outlet on the circuit is not properly wired, it may leave the others down the line inoperable. The electricity runs from the breaker to the outlets down the line, so if that first one isn't tied in correctly, the rest of the circuit is dark," he says.
There’s no “pass” or “fail” to a home inspection: it’s better to think of it as an informative snapshot of the condition of your home. Home inspections for a new home can still be 20 pages long, depending on how thorough the inspector is - so don’t be surprised that your inspection turns up some issues.
There's no right or wrong answer to getting a new home inspection - it depends on your comfort level with the risk.
“I don't know if it's always worth it to get an inspection," notes Chad. "I would base it on the house, the builder, and what state the house is in. Ultimately - the HVAC system is brand new, the plumbing’s brand new, and you can go in and test everything. And if something doesn't work right, say hey, I need you to look at this and get this taken care of, and that way, you save $600.”
Since new builds are covered by a warranty for the first year, in other words, there are inherently protections in place to get things fixed even if you don’t notice the issue right away.
Ultimately, it’s your choice whether you want a home inspection for peace of mind.
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