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What is a Home Inspection?
Michael Abell of D.R. Horton in Austin Texas restricts inspections for homebuyers. Buyer Beware.  XML
Forum Index » Legislation, Licensing, Ethics, and Legal Issues
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Nathan
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5221
Location: Carmel, IN
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You may recall our last builder in Texas acting unethically, Mr. Clint Miller, who unfairly restricted inspections...See this link that got over 40,000 views AND a personal response from Clint Miller who continued to try to lie his way out of how badly Megatel homes is treating clients:

https://homeinspectionforum.net/posts/list/15/3447/ClintMillerofMegatelHomesinDallasTexas:NoFullInspectionsofourHomesAllowed!#31379

Now there's an even worse offender. Michael T. Abell of D.R. Horton who says (see attachment), "In regards to pre pour inspections, pre sheetrock / frame inspections etc.. It is D.R. Hortons policy that we no longer allow these inspections. You will be allowed to do a third party inspection at final. You can have your third party inspection completed the day prior to your orientation by Strand or after orientation day. We will review the third party inspection and complete items that are necessary to meet City or IRC code."

He goes on to say, "This does not mean that every item on third party list will be completed. Some inspectors call out items are suggestions or information from a different entiry that does not apply to this community. You and your client has purchased from the number one builder in the nation. If you have any questions or concerns with your home please feel free to contact your sales team and they will reach out to your builder and get you answers on any concerns."


We're going to deconstruct this statement over the next couple posts. Stay tuned
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P. Nathan Thornberry
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
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Location: Carmel, IN
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Before I go into an expert level analysis of this customer service equivalent of an abortion, let's first start with some good old-fashioned respect for someone I have a personal connection to...Mr. Donald Horton. He was born in 1950 and by 1978 at the age of only 28 he had built his first home in what would eventually become a company with nearly 10,000 employees doing $14 Billion in sales.

I've swung a hammer personally as the builder of a home. My father has. My cousin has. If you've ever built or developed properties as I have, you know it's a labor of love. The margins are thinner than most would expect and at least in my case I made those margins even thinner by making decisions on materials, quality, and even design because it was just the right way to do it (even when it didn't result in an upcharge to the client). I did okay in it, I know many that have done better, but Donald Horton, the 71 year old and still going CEO of the largest builder in America, didn't get there by sitting on his hands or without having that passion at some point in a big way.

Which brings us to the first point in this communication from Michael Abell of D.R. Horton at 10700 Pecan Park Blvd., Suite 400, Austin TX 78750 that I'd like to address: His claim that the client had "purchased from the number one builder in the nation," which on the scoreboards of staff, revenue, and units he seems to be on point. We credit you for your accuracy!

This message was edited 1 time. Last update was at 03/17/2021 03:35 AM EDT


P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5221
Location: Carmel, IN
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For one other cleanup issue here as we go into a full analysis here for any Real Estate Agents or Home Buyers looking at buying a D.R. Horton home anywhere in America, it's important to note that these policies that disadvantage clients of D.R. Horton and will likely result in millions of dollars in damages over time (time will tell) are, as stated by Mr. Abell, policies of the D.R. Horton company. Those responsible for these decisions don't include Mr. Abell, but rather those in charge. Here they are:

Key Executives
Name Title Pay Exercised Year Born
Mr. Donald R. Horton Chairman 19.01M N/A 1950
Mr. David V. Auld Pres & CEO 12.71M N/A 1956
Mr. Bill W. Wheat Exec. VP & CFO 2.56M 3.19M 1966
Mr. Michael J. Murray Exec. VP & COO 5.03M 6.02M 1966
Mr. Aron M. Odom VP & Corp. Controller N/A N/A 1974
Collin Dawson VP of Corp. Fin. & Treasurer N/A N/A N/A
Ms. Jessica Hansen VP of Investor Relations N/A N/A N/A
Mr. Thomas B. Montano VP, Corp. Compliance Officer & Sec. N/A N/A N/A
Matt Farris Pres of West Region N/A N/A N/A
Tom Hill Pres of East Region N/A N/A N/A


For clarity, I have no idea if anyone on this list personally wrote this policy being referenced by Mr. Abell (which we will post upon locating) and I couldn't even tell you with certainty that any of them are aware of how bad their company looks with this policy in the eyes of every one of their clients.

One thing is for certain: There are NOT many good reviews of D.R. Horton online. Sure, you can't believe everything you read on the internet but I can't imagine being a company with sales in the billions with 1.5 stars on Yelp, only 80 reviews, and 70 none so flattering pictures that I can tell you as an expert in construction, structural failures, and mechanical systems include some very legitimate issues. Similar results can be found on other sites.

Here are some quick examples of pics posted publicly of home issues that might have been avoided with an unrestricted inspection policy. Take a look, you can see them on their Yelp reviews and read the stories if you'd like to.

So as to Michael's claim this is a company wide policy, we believe you and will confirm and post this policy publicly here. As to the claim that you're the "number one builder in the nation", we know that's true on many fronts...but would the Donald Horton of 1978 ignore some of these customer complaints as has been apparently the case according to review sites and further would he have looked at a home he built in 1978 compared to one built by the company in 2020 and felt the quality put D.R. Horton of today in the position of "best in the nation"? I doubt that highly.
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P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
[Email] [WWW]
Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5221
Location: Carmel, IN
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Now let's get into process specifics where D.R. Horton's policies is putting Superintendents in an impossible position. We'll do that in the form of a response to each of the statements made by D.R. Horton in this letter to their clients:

In regards to pre pour inspections, pre sheetrock / frame inspections etc., It is D.R. Horton's policy that we no longer allow these inspections. You will be allowed to do a third party inspection at final.

This is probably the most concerning statement I've ever seen a builder put in writing in my 20 years in Real Estate. Essentially what D.R. Horton is saying is that you, the buyer that is paying hundreds of thousands of dollars (plus interest), despite every claim they make about having "customer-driven principles" and the rest of the hype on their website, when it came to coming up with a policy that makes it so that defects unnoticed by you as an unqualified home buyer and not called out by municipal officials (and they miss a lot in their quick stop by) get covered up until they become a big problem down the road by concrete, insulation, drywall, and all other finishes before you can be given the opportunity to have a final inspection. The limitations this puts on you as a homebuyer are not only unacceptable, they're uncustomarily restrictive. You'd be treated better by almost every home builder in America.

Moving on...

You can have your third party inspection completed the day prior to your orientation by Strand or after orientation day. We will review the third party inspection and complete items that are necessary to meet City or IRC Code. This does not mean that every item on third party list will be completed. Some inspectors call out items are suggestions or information from a different entity that does not apply to this community.

Let me translate this for you: Not only does D.R. Horton make it so you can't have anyone look at the most crucial components of your home while exposed (like your foundation and the electrical and plumbing systems and whether the framing is up to standards), we're going to give you an impractical standard for scheduling the limited inspection we even permit by holding you, the home buyer we clearly have zero appreciation for, such a limited window for inspections (despite our own building contracts giving D.R. Horton plenty of flexibility on timing for when completion actually occurs), that you may miss your chance until after we've been paid in full and you've closed on the home. That's not to say they wouldn't absolutely come back and fix every issue out of the limited defects that would be visible, but common sense logic says they'll be a lot more inclined to resolve any issues to your satisfaction and quick when a closing is on the line. After that final document is signed, you might find your builder less amenable to any issues where there are "gray areas".

The superintendent goes on to say, in no shy way, that there will likely be nothing done for issues identified until you point to a building code they've violated. Again, D.R. Horton is suggesting something impractical and they know it. Inspection reports identify defects but they don't cite the building code when doing so (even though many of their findings coincide with code issues). This is something D.R. Horton is well aware of at their scale.

The last part of this statement, referencing a "different entity" and "does not apply to this community" is pure nonsense. While it's hard to understand with the grammar in the note from D.R. Horton, the only logical interpretation is that they do not respect that your home inspector and the agent that referred them are a part of your team and that they're willing to misrepresent facts to clients when they very well know, as an example from this Texas superintendent, that inspectors are licensed by the State. There isn't a community they "don't apply to" in the State. Same thing goes for all licensed States and in unlicensed States these inspectors are almost exclusively operating based on recognized trade group standards that mimic licensing standards.

It's unlikely that D.R. Horton really has such a severe misunderstanding of how the world of home building and home inspection work, so these statements qualify as clearly intentional misrepresentations in an effort to dissuade a home buyer from exercising their rights to make sure their home is built well and safe for their families.



Of course none of this matches up to any of the representations made by D.R. Horton on their website. Check some of them out here:



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P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5221
Location: Carmel, IN
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As you're reading all this you might be very interested. You may be bored. You might even be angry. Bottom line, this policy by D.R. Horton is so far below acceptable that it deserves sharing. It deserves to be heard. It deserves to be acted upon.

So if you're asking yourself what you can do, here's a short list:

1. Share a link to this post. Just copy and past the URL above if you're looking at this post. It will work. Share it along with a headline of your own along the lines of "Beware D.R. Horton" or "What is D.R. Horton Hiding?" or "Check this out before you buy a home from D.R. Horton".

2. Don't sign a contract with them until they include a exception in your contract to 100% of their home inspection restrictions. If they don't agree, it's okay. While they're a big builder they don't build most homes. There are a lot of options where you can be assured the quality you're paying good money for.

3. If you're in real estate, bring up this issue at your next sales meeting.

4. Regardless of who you are, you can write, email, call, and share publicly your opinion on this matter. In the coming weeks I will be posting the personal contact info of their entire leadership team here to make that easy for you.

5. If you're in a position to make a policy or legislative change in your state (or want to suggest it to a State House of Representatives Member), send them a link to all of this with the following language suggested as an add in (adjusted to match up with existing statutes in your State of course) to the next piece of legislation they see. It's a free way to support small business (home inspections) while simultaneously protecting the public.

Verbiage: No builder shall restrict in any way a home buyer's rights to inspect their property at any stage of construction so long as the home inspector hired is duly qualified and does not impede on construction in progress.


6. If you're with D.R. Horton, fix this. Post here when you do. Get my thumbs up endorsement and a resounding applause from your deserving clients for respecting them. Tell your leadership that Home Inspectors aren't the enemy - if they need to hear hundreds of examples of Home Inspectors identifying an issue early on in construction that could have been fixed by a builder's sub contractors for free instead of becoming an argument later or discovered two months after their sub disappears that they should pick up the phone and call me. I'll be happy to explain to them exactly how this policy disadvantages clients while simultaneously costing the builder in more ways then one. In fact the only beneficiary from this is a subcontractor that does unsatisfactory work for an extended period of time before the problems start affecting customers, a builder's reputation, and the pocketbooks of both in many cases.



If you think I'm bluffing about part 6, I'm not. Many years ago my father and his company, the largest home inspection company in Central Indiana, started getting calls from homeowners in a neighborhood with various environmental and water intrusion issues. Every home he went to in the neighborhood had brick facade installed incorrectly, with no air gap or weep holes. As news spread of this throughout the neighborhood, the builder started getting claims from homeowners. That builder now suggests inspections instead of so irresponsibly dissuading as their salespeople tended to do prior. I don't know what the going rate is for tearing the brick off 200 homes and reinstalling is, but it's a lot!

So D.R. Horton save yourself money while making your reputation awesome by addressing this quick. I'll give you full credit!

P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
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Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
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D.R. Horton's Official Response to all of this:


From: Jessica L Hansen <JLHansen@drhorton.com>
Date: Wednesday, March 17, 2021 at 9:26 PM
To: "nathan@nathanthornberry.com" <nathan@nathanthornberry.com>
Subject: RE: I realize this isn’t your policy

Nathan,

In response to your inquiry to Michael, we would like to clarify D.R. Horton’s position on third-party inspections.

It is not company policy to disallow third-party inspections throughout the home construction process. Local market rules, regulations and market dynamics differ significantly across the U.S., and our local teams have the autonomy to make adjustments to their processes as necessary to continue to meet homebuyer demands for a high-quality home on an appropriate timeline. This includes our local teams considering other important factors, such as ensuring the health and safety of our employees and third-party contractors, including following our COVID-19 protocols.

We build according to local building codes all across the county. To stand behind our quality, every home that D.R. Horton closes is backed by a robust warranty. D.R. Horton is predominantly a spec builder; approximately 80% of the homes we close each quarter begin as a spec, or pre-planned production start, and are purchased by our homeowners at all different points in the construction process, many of whom purchase their homes at or near completion. For the 20% of buyers who may sign their sales contract before home construction begins, the process may differ slightly. Regardless of what point in the process a homebuyer signs the sales contract, all of our homes are built to high-quality standards.

Regards,
Jessica

P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
[Email] [WWW]
Nathan
King
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Joined: 06/17/2014 09:32 PM EDT
Messages: 5221
Location: Carmel, IN
Online

My Response to D.R. Horton's response immediately above (which actually included a COVID excuse lol):


I’m absolutely in shock at this response.

First, you say you’re going to clarify, and then you did no such thing (see below) and instead wrote about largely issues that are irrelevant and not even a part of the conversation. You maintained a position that is indefensible while talking about issues that don’t matter and even making up COVID issues.

It is company policy to disallow the necessary and appropriate inspections that protect consumers, including issues that will be hidden behind drywall and assurance that the foundation is properly poured. It’s beyond a misrepresentation to simply play semantic games with this as you did throughout your response.

There are zero local market rules in any market in this country that differ on this. I’m perfectly aware of all of them as a licensed inspection school owner everywhere in this country and owner of the largest compliance department in home inspection and real estate nationwide. Your statement is factually and demonstrably false and I know that you know this, or at least I would hope. There’s no way that D.R. Horton’s position is actually that there is a different “regulation and market dynamic” that would affect anything related to the rights of your home buyers to ensure they are not buying a home with a hidden issue (caused by a subcontractor in many cases) through these policies. The “market dynamic” is sort of a weird phrase to use here but I suppose that could be referencing the fact that you don’t enforce these policies in certain markets where maybe you played with the limitation of inspections and experienced backlash. That would be a plausible reasoning as to why some of your sales reps/superintendents are very open to 3 phase new construction inspections and even in some cases openly promoting the idea, but it’s not a good excuse for disadvantaging clients in other markets because you have found you can sustain sales while doing it. D.R. Horton’s position here, in its simplest form, is “we restrict inspections for home buyers wherever we can.”

The fact you would bring COVID into this response, something completely irrelevant to foundation and rough-in stage inspections since the home is still in an open air condition, is mind-blowing. Did you really believe anyone wouldn’t call you out on that when you wrote this response? D.R. Horton’s position is really that an inspection of a foundation about to be poured is a COVID risk? Walking around an open air, framed home plumbed, wired, and ducted is a COVID issue?

As for your statement about building to local building codes, factually there are two issues with this statement: 1. There has probably never been a home built in the last 30 years that abided by every word of the IBC by any builder, and I wouldn’t expect it as that would be overdoing it but of course I’m certain you aim for the common, customary, and typical minimums of building to deliver a safe and sustainable home and 2. This is a minimum standard. Not exactly something to brag about. It’s like saying you follow just enough of the laws to keep yourself out of jail when arguing you’re a model citizen.

This issue isn’t about your warranty, which isn’t robust but rather falls in line with the typical and customary warranties of large production builders candidly (but we’ll let that one slide because it’s fine and I’m not criticizing that now nor have I ever- most importantly you deliver a HUD compliant builder warranty to make financing possible for many), but this statement is nothing but a detour from the actual issue…just like the statements about homes that are well past the foundation and rough in phase – this issue isn’t relevant to those situations. Whether or not you strive to build to “high standards”…once again, irrelevant.

I’m going to suggest you send this to someone else to resolve and change policy and respond to me with something other than the nonsense you sent. This isn’t about your warranty or your claims of quality. This isn’t about your new construction warranty. This isn’t about COVID at all. The issue is very simply superintendents and salespeople dissuading and restricting home buyers, making their biggest investment of their lives in many cases, from having a chance to ensure their home is as perfect and high quality and without hidden issues as buyers of homes from other builders.

Bottom line if you restrict these inspections that cause you zero inconvenience, you’re saying that your confidence that those inspections will come back without issues to address is low, or worse yet that you believe there are going to be some issues now and then (potentially even minor ones) that you don’t want to address for your clients. There’s no other way to interpret your position.

For the person in charge that can fix this obvious and imminent PR nightmare, I’d like to tell them that there’s nobody in the home inspection industry that wouldn’t support common sense scheduling guidelines in those first two phases particularly that keep the project moving. We all run businesses too, we understand the timing dilemma. Many of us came from construction and home service backgrounds, so we respect safety on a site as well. A majority of inspectors have great E&O/GL policies as well and demanding coverage is something all of the reasonably minded participants in the home inspection industry accept as well.

I’ll look forward to a real response tomorrow.


P. Nathan Thornberry
www.Nathan.tv
Take Your Career to the Next Level > https://youtu.be/hdBCJbl5byo
The #1 Vendor in Real Estate & Home Inspection
www.InspectionSuccess.net
www.RWSwarranty.com
www.InspectorServicesGroup.com
www.RecallChek.com
www.InspectorLab.com
www.InspectionSuperConference.com

Find a Certified Inspection Expert exclusively at www.InspectionCentral.net
Get your E&O Insurance at 20%+ off your current rates at www.RWSinsurance.com
[Email] [WWW]
 
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