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5 Lies New Home Builders Are Telling You! - YouTube
Channel: Kristina Smallhorn
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in the last 14 years i've seen some
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pretty crazy stuff when it comes to home
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builders and here recently i've read
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some headlines that have absolutely
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blown my mind so today we're going to be
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going over some of the biggest lies
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homebuilders have been telling you not
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only that i'm also going to be showing
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you if you really didn't want to hire a
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home builder but you wanted to build
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your own home i got something for you
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too there so one of the craziest stories
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i've heard coming out of 2020 into 2021
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is what homebuilders have been doing to
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home buyers builder cancels the contract
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for a new house they were building the
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couple was six months into the process
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and had already sold their current home
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last august they signed a contract with
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coventry homes things moved slowly but
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they trusted they'd get the house they
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were investing in cbs austin reached out
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to coventry homes but hasn't heard back
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according to their website the
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development where the browns were
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building is now sold out with new buyers
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on a waitlist so what has happened is
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that these home buyers had purchased the
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plan so there was just an empty vacant
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lot except for the fact that these home
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buyers had already agreed upon a price
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and you can pretty much be the judge of
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why they did that with the home prices
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going up
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building materials going up and they
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knew they had a bank of buyers sitting
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there in line waiting to purchase the
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house they didn't care it was a hundred
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thousand dollars more than it was six
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months earlier they're ready to purchase
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right now so they found every loophole
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under the sun to get those buyers to
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just go and walk away unless they are
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willing to pay the new amount which was
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a hundred thousand dollars more terrible
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way for a home builder to do business
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but they really don't care right now but
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they will care in the future whenever
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these home prices start balancing out
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but in the meantime
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it seems that greed is awry not all home
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builders are like that so don't even
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start with me in the comments section
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saying my home builder would never do
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that there are very reputable home
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builders out there so but in this
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specific case how would a home buyer
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protect themselves so they would still
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be able to purchase a house well there's
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one problem that most people don't know
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about when it comes to home builder
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contracts is that when you're dealing
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with a new home builder that's a track
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builder
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in most cases in most states they never
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sign the state contract they have their
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own specific contract that only protects
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them so you could go through that with a
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fine tooth comb and you would have a
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hard time finding any loopholes to be
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able to retain any kind of deposit or
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that you could sue them before you
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decide to hire an attorney to help you
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with your problems with your builder
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there is a letter that you probably want
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to try to write first make sure you
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include your name address and home or
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work telephone numbers type your letter
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if possible if not use printing or
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handwriting so it's easy to read keep
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your letter brief and to the point but
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include all your relevant details state
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exactly what you want done and how soon
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you expect the problem to be resolved
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but be reasonable include all the
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relevant documents regarding the problem
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send copies and not originals keep a
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copy of the letter for your files i
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touched on this but i'm gonna repeat it
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again
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another way that home builders flat out
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lie to you is the cost of the appliances
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and upgrades this is very common with a
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lot of home builders not all again not
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all home builders do this but in many
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cases they will tell you that this
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specific upgrade for a stove is going to
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cost you an extra 250
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but then if you actually like go online
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it ends up being a lot less than what
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they're saying that it costs but then
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they'll tell you well that's including
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the installation but did that include
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the installation for the cheaper uh
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stove yeah that's what i'm thinking so
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this happened to me when i was going to
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purchase my house here and i was having
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it built and these plumbers that were
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putting in all the sinks and everything
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had a tub that i really wanted and i'm
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like that tub seems extremely overpriced
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and it totally was the tub that i wanted
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when he went into their uh showroom was
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six thousand five hundred dollars which
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was insanity and i again i went on home
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depot and some other websites and it
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ended up finding almost the identical
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tub for a lot less money a lot less but
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this is one more way that home builders
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lie to you it isn't just necessarily the
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cost of those specific upgrades
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this is something else that can happen
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and it's super important for you as a
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home buyer that's building a house to
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watch every single step because once
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that tub was delivered i had them open
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the box
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right at the location of where my house
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was being built because i wanted to
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luckily wanted to take a picture to show
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people at my work
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when we opened the box everything was
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perfect and i taken several pictures
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later that same exact day i came in
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because they had installed everything
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and then i get to where the bathtub is
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and there is a gigantic thick scratch
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going all the way down in a chip where
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the drain is and you know what their
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first words out of those plumber's
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mouths were right you know exactly what
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it was the scratch was already there so
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i called my builder up and he's like
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well you know the thing is is we that's
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not stuff that we warrant
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we didn't we didn't do that and i'm like
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but i opened up the box and i took a
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picture of it that morning and those
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scratches weren't there so they had to
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replace my tub so that is another
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warning if you're building a house
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and you're going to get upgrades and
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you're going to have them bring in your
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own stuff from another location make
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sure you take photos of it before you
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have it put into your house because you
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never know what's going to happen if
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they get a chip on their shoulder
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because you're not using their specific
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products now with every new home build
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here in louisiana we have something
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called a new home warranty act many
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states have something very similar and
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this will cover certain aspects of your
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house you'll have a warranty for how
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long your foundation is under warranty
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you'll have a warranty for the actual
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structure itself and then like we have
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like what they call the bumper-to-bumper
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warranty everything inside the house is
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warranted for one exact year so that
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includes paint chips and you know things
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that are loose anything that needs to be
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kind of touched up and that's worn in
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for one year but every year after that
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things start to fall off a warranty home
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builders don't tell you there's other
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warranties that are included besides the
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home warranty act so you can have
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windows put in your house and each of
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those windows has a warranty attached to
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it so you can have those windows
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warranted up to eight years and you may
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not know that because they don't tell
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you
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a lot of your appliances are going to be
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warranted as well so whenever you move
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into your house make sure you pull out
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all those cards that have the warranty
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and fill them out so you have them all
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under warranty so like three years later
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down the road if you have an issue it's
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still under those warranties some
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appliances are up to five years on on a
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warranty so just make sure you fill out
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those cards that homebuilders will do is
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sometimes especially here in our area
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they already have a alarm company come
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in and put an alarm system in that does
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not mean you have to use that specific
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alarm company they have made some kind
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of deal with the builder to go ahead and
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put that alarm system in but that does
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not mean you have to use their specific
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alarm company that's been in there now
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does it make it more convenient sure it
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does but i definitely think that you
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should shop around those prices because
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alarm companies as far as what they do
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and how much they cost are all over the
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map so do your due diligence when it
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comes to having an alarm system put in
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after you've had your house built now
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one of the things that really stinks
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about buying from some home builders
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that you're not familiar with is if they
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have a specific model home so just like
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any builder or if you go to a car lot
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they always put their best foot forward
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as the actual model so they'll have
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every single upgrade in that specific
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model
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and then by the time that a lot of the
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houses are built you're like where are
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all the upgrades but of course those
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cost extra but sometimes they'll put
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things in that model that they don't
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even offer in the houses this happened
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to one of my clients and when she walked
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into the model home they had a specific
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type of texture on the walls and she
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thought it was absolutely beautiful it
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was called knock down and so she was
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more than ready to have her house built
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with these rounded corners and this
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knocked down texture on the walls and
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then once the house was being built it
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was all framed up and the drywall goes
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up and then they start mudding she walks
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in the house and it was orange peel
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totally different texture and the
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homebuilder says well we don't do that
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anymore that was something we used to
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offer but we don't offer it anymore now
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let me just tell you the subdivision was
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only six months old and knocked on takes
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a lot more time than orange peel so that
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was the reason really they just wanted
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to it was almost like a bait and switch
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it wasn't the only thing that happened
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so needless to say with all these things
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she was able to get her deposit back and
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she didn't have to work with that
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specific builder i wanted to say just as
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fyi did not recommend this specific
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builder now there's tons of stories
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throughout the internet of people that
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have had horrible experiences with home
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builders so what is it that you can do
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so here's a few things i know you're
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going to hate me for saying this but
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hire yourself a good real estate agent
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because they are going to know the home
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builders that are going to be easy to
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work with and work with you instead of
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against you
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if you plan on not using a real estate
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agent get yourself a real estate a
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turning that can go over that builder's
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contract before you sign anything so
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that way you have a good understanding
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of what's going on in that contract and
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what kinds of things that you're going
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to be liable for even if things go wrong
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on your specific home build go ahead and
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find out if you have any kind of
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referrals for that specific builder
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himself if it's a private builder try to
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see if you can go into any of the houses
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that he's built previously and talk to
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some of those homeowners and see if they
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have any complaints look online people
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love to air out their grievances online
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so see if there's anything on that
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specific builder online if you don't
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want to work with a home builder i
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actually have a really cool solution for
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you especially if you're thinking about
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building your house yourself as crazy as
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that might sound it's becoming more and
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more common because it's so hard to get
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a new house right now all right i'm here
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with mike luckadoo the coolest last name
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i've ever heard michael can you tell us
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a little bit about you and your company
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so yeah i started in the home building
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industry about
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i'm not going to say how long ago
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decades ago right after college i
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graduated with a degree in civil
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engineering construction management
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started building houses
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built a couple of thousand houses since
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then and maybe 10 years ago somebody
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asked me to help them build their own
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house even as a builder as a friend of
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mine and i realized that there's a lot
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of people out there that wanted help to
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build their own house so i launched a
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company 10 years ago to kind of help
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owner builders people that want to take
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on the management role for their home as
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a project manager and been doing it ever
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since and we've kind of progressed
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through the time we two years ago
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launched a company called open book
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build that really takes it to the next
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level what we did was we created a house
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plan that's easy to build it's got
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custom features and it's and it's an
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affordably built house where owner
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builders can take it and actually build
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it on their own lot we created an online
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course on how to build it so kind of
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like the ultimate how-to booklet with
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video you know diagrams everything that
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you would need to learn how to build
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that house and then we have a package of
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our stuff that we include with the plan
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for free basically you know we call our
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company open book build because we want
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to share all the stuff that we created
[685]
from building the house so every line
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item from the budget most builders
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wouldn't do that but we're saying hey
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here it is we've created it it took us a
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long time to build why don't you guys
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share with it and you know make your job
[695]
a lot easier will your you know budgeted
[698]
items be exactly the same no it's going
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to be different wherever you are but it
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has a really good point to start from
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and then like we include our spreadsheet
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schedule that you plug in a start date
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and it shows you the end date and every
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day what should be going on in that
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house and there's just a whole suite of
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stuff that we use of digital resources
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that i've created over the years as a
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builder to make the home building
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process easier i think it's it makes
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what can be a really complicated process
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much easier for people so our thing is
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to make home building easier for anyone
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who wants to take on this project
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themselves so basically you become your
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own general contractor
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yes like what's the smallest to the
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largest size in your floor plans um we
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just have one plan um but we have the
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the blueprint i should say for the whole
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process for anyone to choose any plan
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they want that's out there our plan is
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one it starts at it's 1120 square feet
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our plan in is with the basement i know
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where you are they don't have too many
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basements but that's something that can
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be addressed so we we offer the plan and
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an autocad version where you could
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change it to any way you want with a
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local architect i always mention that to
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people you know
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everybody has their own idea of like how
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big the you know each bedroom should be
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and maybe you want to take that and give
[770]
that to your local architect to make
[772]
those minor adjustments or to the
[773]
foundation we have people in florida
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that have built our plan on slab but our
[777]
version of the plan is actually has a
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basement so if you wanted to build it on
[780]
other versions of of foundations it's
[783]
pretty easy to for an architect to take
[785]
the plan and just make those adjustments
[786]
to it into local building codes how much
[789]
of a savings would somebody get from
[791]
using your type of plan instead of
[793]
actually hiring somebody to build them a
[795]
house at the same size um builders are
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so in demand right now you guys know
[800]
there's such a shortage of any house out
[802]
there right now but on the affordable
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side it's even worse what i'm hearing
[806]
from all the builders out there if you
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look at some of the publicly traded
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companies if you see a 300 000 sales
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price their cost is probably 225 so
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their markups about 33
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so on a 300 000 sales price their
[819]
markups 75 000 which gives you a 25
[822]
gross profit margin whereas we're
[824]
selling it for like less than a thousand
[826]
with all of our free resources with it
[828]
showing you guys all the stuff that we
[830]
did to build it significant savings no
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matter what people do i would recommend
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if you do build a house like your own
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house i would look for some of these
[838]
stock house plans out there lots of
[840]
tremendous amount of savings for you if
[842]
you go that route versus just starting
[844]
from scratch with an architect because
[845]
the time time of going back and forth
[848]
with the architect over you know what
[849]
you might want in terms of products in
[851]
the house or layout in the house or you
[854]
know the orientation of rooms and that
[856]
kind of thing it's just way time
[858]
consuming these guys make really good
[859]
money so every time you have that phone
[861]
call or email you pay for it so it can
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be very expensive you could spend 20 30
[865]
000 on a set of plans for a you know a
[868]
semi-custom home so stock can be a
[870]
really affordable way to generate your
[872]
design for your house
[873]
let me ask you can you make these into
[876]
off the grid type of homes i mean do you
[878]
have any kind of like
[880]
options where people could add like
[882]
battery packs and and solar panel panels
[884]
and that kind of thing
[886]
absolutely yeah these um power um supply
[889]
to the house where we put it right next
[891]
to the garage so you could easily add
[892]
charging for electric vehicles whatever
[894]
into the future we we made sure that in
[897]
our plan we
[898]
have a 200 amp service which means you
[900]
have lots of power to add on other
[902]
things but yeah solar power easy to add
[904]
either on the roof or next to the house
[906]
so you can get to it and make
[907]
adjustments or repairs well or septic is
[910]
easy to add where you could do that just
[911]
about anywhere or catchment wherever you
[914]
are if you've got enough water coming
[915]
down rain water you can easily add that
[917]
so these types of homes they are
[919]
considered as standard home build or
[921]
modular home build they're just a
[923]
standard for home build right
[924]
this is a traditional build so it'll be
[927]
on a foundation it should be easy to get
[928]
financing final financing for sure as an
[931]
owner builder there's some challenges in
[932]
there and that's one of the things we go
[934]
over in our online course and how to
[935]
what are the best options and who you go
[937]
to and you know obviously you want good
[939]
credit and you want you know a down
[941]
payment and all those things but there's
[943]
specific sources that you can go to
[945]
credit unions are really good local i
[947]
always tell people local banks are
[948]
fantastic i mean we want to make you
[951]
know we want to make home building
[952]
easier for people people that want to
[955]
build their own home you know how can we
[957]
make
[958]
building a house easier and and you know
[960]
the good thing about building a new home
[961]
versus renovating an old one is it's a
[963]
very straightforward process when you're
[965]
renovating a house there can be issues
[968]
with the existing home in terms of
[970]
structure and the way it's built and
[972]
lots of things that you can't see until
[973]
you actually start renovating it on a
[975]
new build once you dig the foundation
[977]
everything is very predictable i mean
[979]
we've had really good feedback from
[981]
people that have taken our course or
[982]
used our plan and our kit stuff i would
[985]
love to
[986]
take this and expand into other house
[989]
plans it's a really time consuming and
[991]
an expensive process but i think people
[993]
want more choice and you know definitely
[995]
one plan isn't enough so i hope
[997]
hopefully we can get there at that point
[999]
and you know and sometime in the future
[1000]
and offer more plans so if people want
[1003]
more information on your uh company and
[1005]
to get your house planned yeah where can
[1007]
they find it they can go to
[1008]
openbookbuild.com
[1010]
that's if you want to try and build our
[1012]
plan if you have a house plan that you
[1014]
want to build and you already kind of
[1015]
know what you want to do
[1017]
ownerbuilderclass.com is where we show
[1020]
people how to build any plan and take
[1022]
them through the process so i think if
[1025]
if you're very specific on what you want
[1027]
then owner builder class is the way to
[1029]
go how cool would that be to say that
[1031]
you built your own house now if you
[1032]
decide to go this route make sure that
[1034]
your specific piece of land is prepped
[1037]
properly prepped properly to have a
[1040]
house put on it and mike basically walks
[1042]
you through every single tiny step so
[1045]
also make sure that you can put a house
[1047]
in that location as well and make sure
[1049]
you get the proper permits mike's
[1052]
website explains all of that as well
[1054]
if you want to watch some more videos
[1056]
about the differences of different kinds
[1057]
of home builds go ahead and watch this
[1059]
video right here
[1061]
my name is christina smallhorn your real
[1063]
estate whisperer and i tell you all this
[1065]
because good real estate information
[1067]
matters
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