Buying a home is exciting. It is also one of the largest financial decisions most families will ever make. After years of litigating construction defect cases, I can say with confidence that many disputes could have been avoided if buyers understood a few key issues before signing an agreement of sale.
Whether you are purchasing your first home or your fifth, there are five legal issues worth considering before you move forward. Over the coming weeks, we will examine each of these in greater detail. For now, here is where every buyer should begin.
1. Know Who Built the Home
If the home is newly constructed—or even just a few years old—the identity of the builder matters. It is not a minor detail.
Before signing an agreement of sale, confirm the builder’s full legal name and conduct basic research. Visit the builder’s website. Review prior projects. Consider how long the company has been in business. Call the office and assess whether they are responsive and still actively building.
You should also determine whether the builder has been involved in prior litigation. Most states provide public access to civil court dockets that allow name searches for filed cases. Not every lawsuit indicates wrongdoing, but a pattern of repeated claims is worth understanding before committing to a purchase.
From a legal standpoint, knowing who built your home can affect your rights. In certain circumstances, claims may depend on representations made by the builder and whether you relied on them. At a minimum, you should know whether the company responsible for constructing your home is likely to be available if a problem arises.
2. Think Carefully Before Having—or Waiving—a Home Inspection
In competitive markets, buyers are often encouraged to waive inspections, sometimes by their realtor, in order to make an offer more attractive. But the decision is not simply “inspection or no inspection.” It requires careful thought.
An inspection can identify visible concerns before settlement. It can also place you on notice of potential issues. If a report identifies a condition and you proceed with the purchase, that knowledge may affect your ability to bring certain claims later.
If you choose to proceed with an inspection, select your own inspector. Do not rely solely on an inspector recommended by your realtor. You should independently verify credentials and experience and ensure the inspector works for you—not for the transaction.
3. Read the Seller’s Disclosure Carefully
Seller disclosures are often treated as routine paperwork. They should not be.
In many transactions, the disclosure contains the primary written representations about the property’s condition. Read it carefully. Pay attention to prior water intrusion, roof or foundation repairs, drainage issues, mold history and repeated repairs.
If you receive revised disclosures, compare them closely. Changes matter.
4. There Is No Such Thing as a “Standard” Agreement of Sale
Buyers are frequently told that the agreement of sale is “standard.” It is not.
Addendums can often contains provisions that materially affect your rights. These may determine where disputes are resolved, whether arbitration is required, how long you have to bring claims or whether damages are limited.
Before signing, consider what would happen if the builder fails to correct a defect. A brief consultation with a construction attorney can prevent unintended limitations on your rights.
5. Understand the Builder’s Warranty Before You Rely on It
Many buyers assume that a builder’s warranty provides additional protection. That assumption deserves scrutiny.
Some warranties shorten the time to bring claims, narrowly define covered defects or require dispute resolution procedures that favor the builder. In certain situations, a warranty may reduce your legal options rather than expand them.
Protecting Your Investment
Most homebuyers do not anticipate construction disputes. But understanding risk before signing is far easier—and far less costly—than resolving problems after closing.
Before purchasing a home, research the builder, make an informed decision about inspections, read every disclosure carefully, review the agreement and its addenda thoroughly and understand the scope of any builder’s warranty.