Home Builders and Their Inspectors.
Many Home Buyers are duped by Home Builder’s Tactics!
Several local Home Builders and I’m sure many others around the State and Nation use the same deceptive tactics that we are going to discuss. Companies such as D.R. Horton and Sivage Home Builders are companies in the San Antonio area using the old smoke and mirror tactics to help confuse home buyers into not having a home properly inspected.
D.R. Horton and Sivage Homes hires what they call a Third Party Independent Home Inspector (Charles Hankins Firm, Bruce C. Bealor, Burgess Inspection Group) These Home Builders convince many home buyers to not employ their own home inspector to inspect the home during construction or for their final inspection prior to closing. These tactics are in violation of the Texas Real Estate Commissions Rules (TREC). The Builder will adamantly tell the Buyer there is no need to have the home inspected we will hire a Third Party Independent Home Inspector for you, these Home Inspections are being set up by the Builders and often paid for by the Builder. These tactics have no indication that would lead you to believe these companies are a Independent Home Inspection Company.
When a home inspection is being conducted as part of a Real Estate Transaction and fees are being paid the inspector must be licensed, follow the TREC Standards Of Practice and use the TREC Promulgated Report (7A-
These types of home inspections are conducted on a simple one page form and come nowhere close to complying with current State Guidelines; as well these Inspection Companies are in no way independent from the builder. It has been said that in some cases the Superintendent/Construction Managers job or bonuses are tied to these inspectors’ reports. If an Inspector does a proper and thorough inspection chances are the Inspector will not be given anymore inspections from the Superintendent/Construction Manager.
I have personally witnessed these inspection companies conducting these farce inspections to state they can’t go up in the attic its not allowed. One Inspector stated in a D.R. Horton neighborhood that he could not go outside on the side of the home because it had rained. Some of these Inspectors have also told clients that they cannot go up on the roof it is not allowed. What kind of inspection are they doing? No doubt one that will discover almost now defects and help the builder sell his home with the highest rate of return.
If the consumer tries to discuss the major differences in the 2 different Inspectors reports the Builder will defend their product and will tell the buyer that your inspector just not understand the Builders way of construction. D.R. Horton and Sivage Homes will use their inspectors report or even Municipality Inspections to try to substantiate their claims and tell the buyer their home past all inspections. (we will talk about this more in another issue)
Excerpts from D.R. Horton’s Hand Book
Read carefully the paragraph below.
Private Home Inspectors
D·R·Horton does not allow any Private Home Inspector on or about any property that is under construction without prior authorization from our office. Any Private Home Inspectors wishing to perform inspections on any of our homes must first provide us with the required proof of insurance and any other required documentation in order to be on our job sites. Our office can provide you with a list of Private Home Inspectors who have already met these requirements. D·R·Horton does not endorse any Private Home Inspectors nor do we receive any compensation from them.
Now let’s see if what you read is what it is saying, please note some of these key words.
1) D·R·Horton does not allow any Private Home Inspector on or about any property that is under construction without prior authorization from our office.
This is allowing D.R. Horton to control who you use to inspect your new home, D.R. Horton must give you authorization to have your home inspected and approve your home inspector.
2) Any Private Home Inspectors wishing to perform inspections on any of our homes must first provide us with the required proof of insurance and any other required documentation in order to be on our job sites.
All Home Inspectors carry E&O insurance if licensed in the state of Texas, many home builders are requiring home inspectors to purchase additional insurance to inspect the home, in same cases this insurance policy must name the builder as a beneficiary to the inspectors policy. There have been all kinds of excuses given as to why the inspector needs additional insurance but the fact is only the inspectors are required to do this in most cases. The Realtor, Appraiser, Time Warner Cable, ADT Security Company, the Window Blind Company none of these Companies that I can find have to carry additional insurance that names a builder as the beneficiary to the policy. Some home builders (Medallion Homes, McNair Homes, Prestige Homes) go as far as to require the Inspector to sign a hold harmless agreement relieving the builder of all liability even in the builders own negligence. In this case the inspector’s insurance carrier can drop him for increasing their risk to liability.
Please note the wording and any other required documentation in order to be on our job sites. They leave this wide open by not specifying the type of documentation required so as to allow D.R Horton to specify at will additional documentation. Also notice D.R. Horton does not specify the amounts of insurance that has to be carried (does this change depending on which inspection companies they don’t want on their site)
3) Our office can provide you with a list of Private Home Inspectors who have already met these requirements. D·R·Horton does not endorse any Private Home Inspectors nor do we receive any compensation from them.
D.R Horton has set these guidelines that only a few Inspectors have met, yet they go further on to say that they do not endorse any Private Home Inspectors but they can provide you a list of Inspectors that have meet their requirements. Requirements that are not published or listed in these materials, If this is not an endorsement I must not understand the word endorsement at all. Although D.R. Horton is not very transparent in their tactics it is very easy to see through them, these Inspection companies are being referred by D.R. Horton and the compensation D.R. Horton receives is in Illegal Inspection Report and Poor Business Tactics. These inspection reports not calling out the deficiencies in the home saves the Builders across the State Millions in cost; this is a form of compensation!!
We will be going into more detail and providing you inspection reports that have been done and further break this problem down in other articles at a later date.