The Benefits of Buying New Tract Homes Vs Pre-Owned Homes

Unfortunately, one of the inherent problems of buying pre-owned homes is not knowing exactly what you're buying. No matter how good the inspector was that you hired to inspect the home before you bought it as an investment, the chances of a costly defect is always an ominous occurrence waiting to happen. However, when completing the purchase of a new tract home, even though the home may have a defect or two, the defect is correctable most of the time, if not all the time. This is accomplished through the built-in home warranty that comes with a home upon its purchase. More often than not, national, regional, and local builders have some type of warranty that covers even the smallest of defects, such as cracked tile, masonry work, squeaky floor boards, and caulking issues, or major issues, such as pipe leaks, roof problems, foundation cracks, and other structural issues. Structural issues may include a ten-year warranty to cover costs related to the defect. Generally, warranties are defined as standard and structural, as most major homebuilders provide these warranties, such as KB Homes, Centex, and Pulte Homes.

And yet, despite the coverage that most warranties will provide for a pre-owned or resell home, such as the warranty you can buy for $350 to $450 from Fidelity or Old Republic, nothing beats the comfort of acquiring a new home that has that bumper-to-bumper warranty coverage and still has that new car smell to it. Other negatives of pre-owned homes include the following: mold issues, termite infestation, hard to detect structural damage, and cracked foundation or slabs. It would be very rare for the latter issues to arise in a brand new tract home. These are only a few of the problems that may occur with pre-owned homes since there may be many more.

One such example of the beauty of newness and the benefit of having a home warranty provided by the builder was a new tract home I bought from Ryland Homes. This particular home had been the third home I had bought from Ryland; the second home incidentally was one door down, which I had bought at the same time. Long story short, I had just closed the home the day before, went out the next day to pick up the keys from the sales office in Moreno Valley, and proceeded to go to the brand new home. Upon proceeding through the front door, I was hit with a foul smell that was reminiscent of stagnant water and light sewage. Walking farther into the family room and then into the living room, I noticed two things that gave me immediate alarm. First, there was a leak coming from the first floor ceiling as I looked up, straight onto the carpet below. Second, I determined if there was a leak coming from the ceiling, that meant there was damage on the second floor, and if that was the case, it was likely from a burst pipe emanating from the master bathroom.

Going upstairs, my worst fears were realized. From the corner of the room that abutted the master bathroom, a huge three-by-three-foot section of wall in the master bedroom had begun to essentially melt away. This unsightly scene occurs when gypsum stone or drywall is exposed to substantial amounts of water on its surface.

Fortunately, the customer service department of Ryland Homes, being the outstanding professionals they are, responded quickly and were out there the next day to begin a ten-day cleanup and remediation of the damages. An outside company that specializes in mold detection and removal was brought in to remediate and repair. Ultimately, the tests came back negative, which meant there was no mold damage. This outcome was very critical since I had essentially pre-sold the home before I'd even closed it. Upon disclosing the potential mold damage to the prospective buyers-who eventually bought the property-there was a moment of dread, or rather a couple of days worth of dread, as a result of not knowing the extent of the damages and how it would affect the agreed upon sales price.

It can be surmised that if it were not for the reliability and responsiveness of the builder's warranty and customer service department, the outcome may have not been so positive. Even so, I netted $57,000 on this transaction, not to mention $64,000 on the other home one door down. I also had the pleasure of making two first time home buyers very happy. The people who bought the home were actually two sisters, both single mothers in their mid-forties who were moving from the Los Angeles area into Riverside County. This was the classic story of people moving into suburbia because of the high cost of housing in Los Angeles. One of the sisters actually worked only three blocks away at the local high school. Her sixty-five-mile daily commute had just been reduced to three blocks. Another happy customer and another closed transaction.