Buying a New versus and Existing
home
Homeowners of Texas believes that consumers should have the same types of protections for
buying new homes as already exist for buying older homes (or even used
cars). This would help both home buyers and the homebuilding
industry.
Today there
are more protections for buying an existing home than a new one, as shown in the table below
and in LegislativeFlyer2_LicensingNewUsed.pdf
.
|
Buying an EXISTING
Home
|
Buying a
NEW Home
|
Realtors are
Licensed.
The Texas Real Estate Commission (TREC) assists and protects consumers of
real estate services, thereby fostering economic growth in Texas. Through its programs of education,
licensing and industry regulation, the Commission ensures the availability of capable and honest real
estate service providers. |
Homebuilders & Contractors
are NOT Licensed.
The Texas Residential Construction Commission (TRCC) registers builders and remodelers. The agency
does not license builders and instead protects them while regulating homeowners. Without licensing,
the agency has no way to ensure that builders are capable or honest and can’t weed out bad builders
or help consumers find good ones.
Note that HOT got lawmakers to abolish the
TRCC and its registration process. Next is to require licensing.
|
Real Estate
Inspectors are Licensed.
TREC requires education, experience and liability insurance to become a
real estate inspector. Inspections cover conditions that are present and visible. They don’t cover
unseen structural elements that can cause problems later, such as what’s behind walls or inside
foundations. |
Home Building Code Inspectors are NOT
Licensed.
Home inspectors need a
greater knowledge of building science and should monitor the construction process from one stage to
another. But unfortunately they are not licensed or regulated and may have long-established builder
relationships. |
State-approved Sales Contracts Protect
Buyers.
TREC requires the use of State-approved
contract forms for any agreement that binds the sale, exchange, option, lease or rental of real
property and defines the legal rights of all parties. Licensees may only fill in the blanks
provided and may not add to or strike standard wording. |
TAB-provided Contracts Favor
Builders.
The Texas Association of
Builders (TAB) promotes its Contracts Package as saving its members thousands of dollars in
attorney fees. The contracts include mandatory Binding Arbitration clauses that block homeowner
access to courts, are generally non-negotiable, and protect builders rather than
homeowners. |
Full Disclosure is
Required.
TREC requires the seller to disclose the
known condition of the property, including soil conditions, foundation, roof, ceilings and walls,
water penetration, aluminum wiring, termites, range, oven/microwave, dishwasher, disposal, water
heater, central A/C, security system, smoke detectors, intercom, plumbing, pool/spa, and garage
door openers. |
Disclosure is Not
Required.
Texas does not require
builders to disclose construction defects, soil conditions or other problems. Unscrupulous builders
take advantage of this deficiency and do their best to conceal known problems. Even when consumers
complained to the TRCC and defects were confirmed, the agency lacked the ability to compel
builders to fix the problems. |
Home Warranty is an
Option.
The Sellers' Disclosure of Property
Condition is not a substitute for any inspections or warranties the purchaser may wish to obtain.
Consumers can buy home warranty insurance regulated by the Texas Department of Insurance. Terms
vary, but policies don't generally cover the most expensive problems that can occur in
foundations and other structural elements. Neither did TRCC standards. |
New Home Warranties can have Illusory
Terms.
Texas requires builders to
provide minimum warranties of one year for workmanship and materials; two years for plumbing,
electrical and HVAC systems; and ten years for major structural components and habitability. The
terms were illusory because of TRCC defined exemptions and builders were allowed to shift
their responsibility to 3rd-party warranty companies. Without the TRCC, we revert back to the
Implied Warranty of Habitability. |
Buyers have Flexible Legal
Remedies.
If complaints are filed against licensed
professionals, their license can be revoked. In addition, homeowners have various other options for
resolving disputes with sellers, realtors, inspectors, attorneys, or title & mortgage
companies, including mediation, arbitration and civil suit. |
Buyers have Limited Legal
Remedies.
The Residential
Construction Liability Act (RCLA) already protects builders by preventing class action suits and
the recovery of punitive damages and attorney fees. TRCC further protected them through a State
Inspection Process that blocks access to other legal remedies. HOT helped to get the abusive agency
abolished. |
|
Delicious
Digg
Facebook
Google Bookmarks
Stumbleupon
Twitter