After renting in Chicago for several years, Stacy Lee Rodenkirch decided it was time to buy.
“I wanted to get a place of my own,” says Rodenkirch, 30, who is a retirement plan consultant. “I found a one-bedroom condo that I fell in love with. I loved the neighborhood and I bought it.”
“I researched the market as far as prices,” recalls the Wisconsin native who admits other aspects of the purchase were “pretty informal.”
So it was a jolt to learn soon after moving in that “there was a leakage problem for those on the top floor,” she says.
Although her unit was not affected by water damage, she and the other homeowners in the 5-year-old, 27-unit atrium building had to pony up for several special assessments to make building repairs.
“The builder is no longer in business. They had reorganized, which I guess is not unusual. There was no one to sue,” Rodenkirch says.
While it is hard to know how often a situation like Rodenkirch’s occurs, there is no doubt that one bad experience can turn the American dream into a nightmare.
First-time home buyers tend to concentrate on getting the biggest bang for the buck and the most home for the money, but Rodenkirch urges, “research the builder.”
That was a lesson she put into practice after her experience with the leaky condo building. When she moved into her present home — a townhouse in Kilbourn Court by Dubin Residential of Chicago — about six months ago, she quizzed her attorney and broker, “who knew the builder,” as well as friends who were renting in another Dubin development.
“I plan on staying in this for a while,” she says.
“The builder you go with is almost as important as the house you want,” says Susan Lanucha, sales manager for Park Place, a 187-home development in Oswego by Wheaton-based Smykal Associates.
Lanucha, who has worked with Smykal for 17 years and on several of the builder’s projects, suggests buyers first learn the advantages and disadvantages of working with different kinds of builders.
“There are different personalities to builders,” she notes.
A builder’s Web site may give clues to a building company’s personality as well as information about its housing, prices and developments, Lanucha says.
A large, national production builder may offer the reassurance of a brand name but may have limitations in customization and personalized service. A smaller regional or local builder may lack wide name recognition, but may have a more personal touch and have wider latitude in making changes.
Look for the history of the company, especially its longevity, she suggests.
In addition, Web sites about the builder and specific developments may highlight opinions and complaints as do a growing number of third party rating systems such as J.D. Powers & Associates.
Be sure to understand the criteria for negative as well as positive ratings before making a judgment, cautions Lanucha.
She advises buyers to go beyond the Internet to talk with municipal officials in the local building or planning department.
“They won’t endorse any builders but see what they might say,” she urged.
Check whether a builder is a member of the Northern Illinois Home Builders Association, one of several organizations of builders in the Chicago area.
While not a guarantee of quality, “if they are a member, it lends some credibility,” she says.
One important reason is that the 159-member NIHBA has an arbitration process where an unhappy buyer can plead the case against a builder before a panel of three of the builder’s peers.
“I’ve actually known someone who did this and won,” Lanucha said.
A call to the local title company may elicit helpful information.
“They will not usually give a scorecard, but ask if the [builder’s] closings are mostly trouble-free, without delays,” she says.
Check for complaints with the Better Business Bureau, says Christopher Shaxted, executive vice-president of Lakewood Homes, based in Hoffman Estates. Having several complaints “raises a red flag,” he says.
The most direct and best research is old-fashioned legwork by “looking at previous developments and driving through and knocking on doors,” Shaxted says.
Homeowner Boone Powell, 27, of Lakewood Springs in Plano, says “he drove around other neighborhoods [the builder] had built, then drove out to see the landscape” for the development before he decided to buy in November 2003, before construction began.
Lanucha says in all but the coldest winter months, it is easy for “suburban buyers and even those in the city to visit a neighborhood or a previous development.”
“I’d stroll around the neighborhood” to observe the housing up close and to look for opportunities to talk to current homeowners, she says.
“How do they like their home? Were you satisfied with the builder? Was the home done on time?” are among the questions Lanucha would ask.
“Residents of new developments are used to cars slowly going through the neighborhood as buyers inspect the housing,” she says.
A new house “is the biggest investment you will ever make,” so this is no time to be shy, she adds.
That advice applies to urban buyers as well, says Amy Settich, sales manager for New West Realty, Chicago.
She tells buyers to talk to homeowners in an existing building or, if a development has yet to break ground, to ask at the sales office for a list of the builder’s previous developments.
Most reputable builders have no qualms about supplying such information, Settich says.
“Go stand by the building and ask people exiting if they are residents. If so, tell them you are thinking of buying from the building. Ask about their experience and how do they like their unit,” she suggests.
“I think it is huge that you can talk to a person who has bought from the builder,” saysKathy Finn, a real estate lawyer who now works for an office property leasing firm.
Finn, 43, didn’t buy her first home until she was 35, in part because as an attorney then in private practice, she “had seen a lot of crap and I had reason to be wary.”
When she did buy a condo in the 1990s at Cinema Lofts by LR Development in Chicago’s Lakeview neighborhood, Finn says she knew people who worked for the company and who had bought from the company.
“I talked to as many people as I could find,” she says.
From her past experience at closings on homes in the city and the suburbs, she knows that the booming housing business has attracted newcomers, some well-intentioned but lacking professionalism.
Now living in a second LR Development after leaving Chicago for a while, she says she suggests looking for a builder who is organized, has a track record and does building full-time, not as a sideline.
Full-time builders “have access to good workers,” she says. Conversely, those who are working on a building in their spare time may not have established the relationships and contacts to get the best workers.
Missed deadlines and too many choices in certain features like countertops raise red flags for her.
A huge number of choices, say in countertops, far from being a good sign may be a warning that the builder “hasn’t done any work to help the buyer, didn’t know how to help the buyer or didn’t have the personnel,” according to Finn.
Her sister had about 300 countertop choices once, Finn said:
“I would have just collapsed. I wouldn’t know what to do. I had about 10 [choices] and it was more than enough.”
Finn has watched as her sister worked with an inexperienced builder who couldn’t meet deadlines.
“They get you in there and they are so not finished. It becomes a nightmare and a lot of fighting,” she warns.
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