The International Association of Certified Home Inspectors, the world’s largest inspector organization, recently published one of my articles.
The International Association of Certified Home Inspectors, the world’s largest inspector organization, recently published one of my articles.
I just ran across this excellent blog post from an independent insurance adjuster in Missouri. Excellent insight from an outsider. Obviously, the practices I have spoken of here before are widespread. Many thanks to Jim Bushart.
So, you’ve found a house that appeals to you and fits your budget. You have made an offer which was accepted by the seller, and are ready to have the house inspected prior to closing the deal. If you’re like most folks in this market you will have a 5 – 10 day option period in which to do this and many other things. Is that long enough? Probably not. Why?
1. Competent home inspectors are few and those few stay busy, as one might expect. The odds of getting a skilled expert within such a short window of time are definitely against you.
2. The inspector’s job is to identify significant issues found during an inspection and to direct you to the type of professional needed to further assess and offer remedial options. Even if you land an excellent inspector within your short time frame, you may not be so fortunate with the recommended repair persons. Like their inspector equivalents, experienced structural engineers, HVAC technicians, master electricians, et al., stay occupied.
This leaves you in the position to rely upon the B or C team to educate you regarding your prospective new home’s condition. These will usually come in the form of the obsequious that flock around your real estate agent for crumbs in the form of referrals, or those whose only drawing card is availability. Either of these is not likely to notice that the predominant angle of your future new home is not 90°, the roof leaks, or much else of significance.
What’s the answer? Extend your option period, if possible. If the seller is reluctant and your agent is incapable of negotiating an extension, you probably should move on. Rushing into a large purchase like this without being fully prepared benefits only the seller and his agent who is being paid to rush you.
Against Football: A Reluctant Manifesto, Steve Almond
The Art of Thinking Clearly, Rolf Dobelli
Don’t Fall for the Infrared Camera Hype
Many of you have heard of infrared (IR) cameras and the supposed unbelievable feats they can perform, but most have not taken the time to uncover the real truth about them. In 2010 a Canadian television celebrity, d.b.a. Mike Holmes, declared himself to be the leading authority of the home inspection industry in North America and beyond. Due to his popularity he launched a television series promoting this fallacy and his new Canadian home inspection company. In an effort to make himself stand out in the crowd of real home inspectors he chose to promote infrared cameras as a major, if not the only important, home inspection tool. Along with support consisting of pseudo-scientific hype derived from movies and forensic science television programs that focus on entertainment with little concern for facts, he proceeded to promote something different to the viewing public. Overall, it proved to be an extremely effective and profitable business strategy, which, in this case, resulted in a successful TV series for him. This, in turn, created a dramatic increase in sales for the manufacturers of infrared imagery equipment. Like him or not, Holmes is a showboat of a salesman. Yes, Mike, his sponsors and the infrared camera industry in general profited greatly from this media circus. And, all at the expense of the home-buying viewing audience and the real home inspectors who protect them.
Infrared cameras are diagnostic tools that have many applications, most of which have nothing to do with inspecting houses. They also have many limitations. They cannot see inside of or through walls, or anything else. They can’t see water. They can’t see mold. They can’t see termites. In fact, all they can see is the infrared energy or temperature of a surface. In order for infrared cameras to provide any useful information they require a very controlled set of conditions and operating environment, which are almost never available during the course of a home inspection.
Inexperienced and unscrupulous inspectors attempt to convince prospective clients that merely owning an infrared camera makes one a superior inspector. The fact is that a pricey camera does not make up for lack of education, training, certification, and experience. Owning a copy of Black’s Law Dictionary does not make one an attorney. Owning a stethoscope does not make you a doctor.
Ever since Mike Holmes’ broadcasted his first ‘Holmes Inspection’ program, home inspectors across North America have been lining up to buy the cheapest infrared cameras on the market so that they can tout infrared services as part of their inspection process. They have even given the use of the cameras a high-tech name – thermography, and the operators are called thermographers. Sounds impressive, huh? To return to the earlier analogy, owning a copy of Black’s Law Dictionary does not make one a lexicographer.
A home inspection consists of what is primarily a visual inspection and is best performed by an individual who possesses a broad base of knowledge of all the systems and components in a home through hands-on experience as a home builder and certification as a residential inspector through the code-authoring agency, the International Code Council. The inspection is visual in nature, since inspectors are not typically authorized to perform destructive forensic investigations of builders’ or sellers’ homes. Most inspector standards of practice which are promulgated by state licensing agencies and professional inspector organizations specify that visual inspections take place without the use of “special tools”.
The types of tools that are most often useful to inspectors and usually considered to be the most important are ladders, flashlights, electrical meters and testers, screwdrivers, moisture meters, binoculars, etc. While their usefulness is extremely limited in almost all types of home inspections, infrared cameras can be helpful on certain occasions if the cameras are of the best quality, the atmospheric and lighting conditions are just right, and the camera operator is highly trained in its use. Therein lies the rub.
The cameras that most inspectors buy are at the bottom end of the technology and comparatively cheap (<$500). They have very low resolution (about like a June bug’s vision) and an extremely narrow scope of field with limited accuracy. The idea that a home inspector can use these to scan an entire house is preposterous. The technology does present an opportunity for a home owner or home buyer to evaluate a dwelling from the standpoint of thermal bridges (missing or poorly detailed insulation), air leakage (poorly detailed air barrier), and even some moisture issues (rain leaks, plumbing leaks, & condensation in the walls). However a significant and accurate result can only be accomplished by using professional equipment (in the $45K+ range), utilizing an inspector who has the required training to operate the camera (in the $5k + range), understands the building science that indicates where and how to look, and has the overall experience and field training to interpret what the camera is indicating. In other words, you can buy a high-tech camera, but the system works only if the camera is pointed in the right place. Even then, the pictures are not self-explanatory. They need to be interpreted, and the human risk of interpretation is often a bigger obstacle than the technical task of picture taking.
Furthermore, in order to stay current with their skills, an infrared inspector has to use the technology at least weekly (preferably daily) and must continually update the required education and equipment over time. We are now into a minimum of a $50K investment just to get into the game. And then one would need to quit the home inspection profession in order to become a full-time thermographer. You cannot do both.
In order to perform quality Infrared inspections you must have the right equipment and right training behind you, and then you must perform the inspection under controlled conditions at the right time of the day. This usually means at night, when home inspections do not take place.
The infrared camera services that most home inspectors are advertising are really just a marketing gimmick, as opposed to providing the client any real level of additional security against liability. The services usually represent negligence at best (providing a service they are not trained to perform) and sometimes even fraud at the worst.
While Texas Inspector owns and uses an infrared camera from time to time when it proves to be practicable, he strongly urges anyone desiring a whole-house scan to hire a full-time professional, licensed HERS energy rating contractor. Do not fall victim to those that claim to provide infrared or IR inspections as part of their home inspection services. Look for these red flags that an inspection company does not have the proper training to perform an IR Inspection:
They advertise that they will be providing IR services during a relatively brief 3 hour or less home inspection.
They advise that they will be performing the IR portion of the inspection during daylight hours (Before sunrise or after sunset is required for accurate readings).
They advise that they will be performing the IR scans when the temperature differential between the exterior and interior of the building is not and cannot be made to be >20° F.
They advise that it will be easy to identify water related issues on the interior or exterior of the home. (This is just so much BS).
They advise that they can ascertain leaks in stucco exteriors. (Not true).
They advise they will only do an interior or exterior scan of the home (not both as is required for accurate interpretation).
Most professional thermographers will take any scans of the exterior of the home prior to sun-up or after sunset. The whole purpose of using an IR camera is to look for temperature differences (indicated by the infrared light that radiates from an object) between various building components and trying to determine if they make sense. Once the sun is out, much of the ‘evidence’ is obliterated as the surfaces heat up under the rays of the sun. This will also very quickly affect the readings on the inside face of exterior walls and so even interior scans are often done before the sun has reached the particular wall(s) of concern.
Even a seasoned professional infrared inspector, with top of the line equipment, will advise that finding moisture issues is one of the hardest tasks to perform with an infrared camera. In order to perform this task properly, the technician usually has to artificially cause a significant temperature change to the structure of concern (often also accompanied by artificially lowering the air’s humidity in the region). This investigation takes a very thorough knowledge of building science (something the vast majority of home inspectors simply do not have) and much preparation. Even with all of this, useful results are not guaranteed.
A skilled thermographer will scan both the interior and exterior of a dwelling to allow a comparison between the two surfaces and seek to develop a hypothesis of what is occurring within the building structure at that particular location. Do you suppose that a home inspector would ever inspect just the exterior or interior of a home and advise that a given building envelope was OK based on only seeing only half of it?
To recap, an infrared camera is not a magic wand. It can also not impart to its operator magical skills or powers. It can be just another useful tool in the toolbox of a professional inspector. It should never be a reason to hire a home inspector.
Update 12/27/19: Not much has changed regarding this article other than the fact that the low-end cameras now available are many and cheap. One can even purchase an IR camera attachment for Android and Cult (Apple) Phones for under $200. June bugs squinting. Additionally, “inspectors” are now hawking IR cameras attached to their drones. Don’t get me started on the drone scam. That’s for an upcoming article.
Texas Home Builders and Rick Perry Fiddle While Texans Burn
In Texas in 2009, the Texas Municipal League, the Texas Association of Fire Chiefs, and the Texas Fire Marshal’s Association petitioned Governor Rick Perry to veto Senate Bill 1410, which prevents a city from having a residential fire-sprinkler ordinance. They lost out to the well-heeled lobby from the homebuilders’ organization, the Texas Association of Builders.
The Texas law was clearly a misguided preemptive strike against the International Code Council’s International Residential Code, the 2009 edition, which required residential sprinklers in 2011.
S.B. 1410 was initially a rewriting of the plumbing code. It required that contractors who install multi-purpose residential plumbing and fire sprinkler systems must be licensed plumbing contractors. The contractors have to prove to the Texas State Board of Plumbing Examiners that they have been trained to install residential fire sprinkler systems, pass a test as devised by the board and pay a fee. Contractors would have to renew their licenses every three years.
But, due to the pressure put on Rick Perry by at least one of the lobbies responsible for his election and reelections – the Texas Association of Builders, the law prohibits local sprinkler mandates.
“Notwithstanding any other provision of state law, after Jan. 1, 2009, a municipality may not enact an ordinance, bylaw, order, building code, or rule requiring the installation of a multipurpose residential fire protection sprinkler system or any other fire sprinkler protection system in a new or existing one or two-family dwelling,” the law reads.
Did anyone in Austin research this issue? Granted, this happened before Rick Perry’s wizard behind the curtain gave him his new eyeglasses intended to make him look like a studious simpleton and not just your run-of-the-mill brainless politician. Nevertheless, someone could have read the research performed by the National Fire Protection Agency, the Underwriter’s Laboratories, the Insurance Research Council, the Fire Suppression Systems Association, et al. The top statistics at the time looked like this:
(1) 85% of fire deaths in the U.S. occur in the home. See: http://www.cdc.gov/homeandrecreationalsafety/fire-prevention/fires-factsheet.html
(2) Fire sprinklers, when used in combination with smoke alarms, reduce the risk of fire deaths by 83%. See: http://www.nfpa.org/~/media/Files/Research/Research%20Foundation/sprinklerimpactfactsheet.pdf
(3) Fire hoses used by firefighters use 850% more water to suppress the same fire than fire sprinkler systems do. This is important in a state where water is becoming scarce. See: http://www.homefiresprinkler.org/newsletter/fall10/article5.html
(4) New, engineered building materials are lighter in weight than traditional sawn lumber. These members burn faster and fail structurally at a much more rapid rate. Fires now regularly flash over before the fire department personnel can even arrive on the scene.
No, the only statistics that were reviewed were the bloated and inaccurate estimates by the National Association of Homebuilders that fire sprinklers would cost an additional $2.94 per square foot to install in new houses. The actual figure at the time was $1.61 per square foot. See: http://www.nfpa.org/~/media/Files/Research/Research%20Foundation/Research%20Foundation%20reports/Suppression/HomeFireSprinklerCostAssessment2013.pdf
This would add a mere $4K to the average 2500 s.f. house. And, it is even less today. The average cost per s.f. is $1.35 or $3375 for a 2500 s.f. house. It is easy to spend that much on cheap Venetian blinds. Let’s agree not to even discuss those ubiquitous and passé granite countertops, or the downright counterintuitive (read harebrained) ideas like wood floors in kitchens and bathrooms. But wait, the builders charge a 300% markup on upgrades like these. They simply cannot charge for mandated safety systems like fire sprinklers. No profit, no interest.
Larger houses, townhouses, and condominiums in most North Texas metropolitan areas are required by local codes to have sprinklers anyway. So, the folks not being protected are the average homebuyers, like you.
You can bet that most of the meaningful statistics researched by Perry’s people were in the form of reading the checks sent to the right places (Rick Perry’s re-election campaign(s), by folks like HOMEPAC, the political action arm of the Texas Association of Builders (TAB) and the Associated Builders and Contractors of Texas PAC.
Money talks. Rick’s got his eyes on Washington, is not running for governor again (thankfully), and he and his big builder buddies could not care less if Texans burn.
Texas Home Builder Warranties – Bet on the Roll
You have their equivalent hanging in a tight little roll on your bathroom wall. Third-party warranty companies sell their warranties to home builders. These are insurance companies who make a profit by minimizing coverage and denying claims. Just how good could these warranties be?
If you buy a $64.99 monitor from Wal-Mart you get a manufacturer’s warranty and the ability to return it to Wal-Mart within a certain period of time if it is defective. If you buy a $13,900 Kia Soul you get a 10-year and 100,000 mile bumper-to-bumper warranty, plus you are covered by both state and federal lemon laws. But, in Texas, if you buy a new house for any price you get, at the very best, a warranty that will cover nearly nothing during the first 2 years other than what is covered by equipment manufacturer warranties, and absolutely nothing of value in your 10-year structural warranty.
Don’t believe it? Let’s examine this more closely. One of the biggest selling points that a builder harangues clients with is his warranty. Many will not even allow you to view the warranty until after the initial paperwork is signed. Wonder why? Well, it’s quite simple actually. The warranty is a farce.
One of the leading warranty companies says this about what they cover if you have a foundation failure:
“A Major Structural Defect is:
1. Actual physical damage;
2. to the designated load-bearing portions of a Home;
3. caused by failure of such load-bearing portions that affects their load-bearing functions; and
4. to the extent that the Home becomes unsafe, unsanitary, or otherwise unlivable.
All four portions of the definition must be met to qualify the Home for Major Structural Defect Warranty coverage.”
Just how bad does a foundation have to be distressed in order to meet all four of those criteria? “ . . .to the extent that the Home becomes unsafe, unsanitary, or otherwise unlivable.” Pretty bad, huh? In other words, they will do nothing to repair your foundation unless you can actually no longer inhabit the house. Sad, but true.
This is the case with nearly every aspect of the house and the warranty. In addition to this lackluster coverage, take a look at the list of exclusions:
“B. EXCLUSIONS – Items Not Covered By The Warranty
The following exclusions from warranty coverage apply to any and all warranties issued by (NAME REDACTED), including Workmanship, Materials, Systems and Major Structural Defect warranties. The Home is warranted as constructed by
the (NAME REDACTED) approved Builder. (NAME REDACTED) does not warrant deficiencies or defects regardless of (a) the cause of the excluded event; or (b) other causes of loss; or (c) whether other causes acted concurrently or in any sequence with the excluded events to produce the deficiency or defect. The following are excluded from coverage under this warranty:
1. Deficiency or defects to any property, or part of the property, that was not included in the Closing Contract Price shown on the Warranty Confirmation page;
2. Off-site improvements or any improvements installed after the Warranty Start Date whether provided by the Builder or others;
3. Drainage deficiencies that do not affect the structural integrity of the Home;
4. Any and all landscaping (including sodding, seeding, shrubs, trees, and plantings) and landscaping irrigation systems including but not limited to sprinkler systems, sprinkler heads and/or sprinkler control systems;
5. Fences, boundary walls, retaining walls and bulkheads, except those retaining walls and bulkheads that contain structural or foundation walls at the Home and/or provide structural support to the Home;
6. Outbuildings, sheds, storage buildings, porches, cabanas or any other detached structures including but not limited to detached carports and detached garages (except those outbuildings which contain the plumbing, electrical, heating, cooling or ventilation systems built or installed with and serving the Home);
7. Patios, decks, balconies, sidewalks, walkways, driveways, swimming pools, hot tubs, spas, exterior steam rooms, covered screen enclosures, and/or other recreational facilities;
8. Any damage caused by soil movement, if compensation is provided by state legislation or covered by other insurance;
9. Any damage as a result of insufficient (or change in) load-bearing capacity of the soil, sub-soils or surfaces of the soil or sub-soils on a lot prepared by You;
10. Any damage caused or made worse by inadequate, excessive or uneven watering of soils within close proximity of foundations in areas with active soil; or damage by trees planted within 10 feet of foundations;
11. After the first year, concrete floors of basements and attached garages that are built separate from foundation floors or other structural elements of the Home;
12. Failure of the Builder to complete construction of the Home or any component part of the Home in conformity with construction plans or specifications or building codes or to complete agreed upon walk-through “punch-out” items;
13. Failure of the Builder, their employees, agents, or subcontractors to perform pre-closing cleanup of any kind or failure to remove any spillage, or debris from construction site;
14. Any defects or deficiency caused by materials, design, construction, or work supplied by other than the original Builder of the Home, or their employees, agents, or subcontractors;
15. Changes, alterations or additions made to the Home by anyone other than those performed under obligations of this warranty;
16. Changes of the grading of the site by anyone other than the Builder originally building the Home or their employees, agents, or subcontractors;
17. Deficiency or defects caused or made worse by owners, occupants, or guests;
18. Any deficiencies or defects in workmanship, materials or structural portions normally covered by another warranty or insurance policy whether or not paid by such warranty or insurance policy;
19. Deficiency or defects resulting from accidents, riot, civil commotion, terror attacks, war, or Acts of God; including but not limited to fire, explosion, smoke, water escape, windstorm, mudslide, erosion, hail, lightning, hurricanes,
tsunamis, falling trees, aircraft, vehicles, flood, earthquakes, sink holes, underground springs, volcanic eruptions, saturated soils or change in the level of the under ground water table;
20. Deficiency or defects resulting from burn holes, buried debris, or organic materials;
21. Any contamination caused or created by natural or man-made chemicals, compounds, or substances, or breakdown or adverse effects of chemicals, compounds, or substances used in the construction of the Home or site. Such contamination is not covered even if the Home is rendered unlivable;
22. Insect damage including termites;
23. Any damage caused by water intrusion, including but not limited to roof leaks, window sealants, plumbing or failure of vapor barriers, except as provided in the Workmanship, Materials and Systems warranty;
24. Dampness or condensation due to Your failure to maintain adequate ventilation;
25. Any loss, damages or other condition which is not a deficiency or defect of construction;
26. Consequential Damage: Any property damage or bodily injury which follows as a result of structural damage, or other defects covered under this warranty including defects in plumbing, electrical, heating and cooling;
27. Normal wear and tear or normal deterioration;
28. Cost of transportation, food, storage, moving contents, shelter, or other incidental expenses related to Your relocating during repair;
29. Any loss or damage which may arise while the Home is not being used primarily for residential purposes;
30. Any loss or physically inflicted damage which is not a construction deficiency or defect, including but not limited to chips, scratches, and dents in materials, fixtures, appliances, or other types of equipment;
31. Failure by You to give notice to the Builder and/or BBWG of any deficiencies or defects within a reasonable time or as specified in this warranty;
32. Negligence and/or improper maintenance or improper operation of items warranted under this warranty;
33. Failure of You or anyone to comply with the warranty requirements of manufacturers of appliances, equipment or fixtures;
34. Any loss or damage which You have not taken reasonable timely actions to minimize;
35. Any dispute received by (NAME REDACTED) later than 30 days after the applicable Warranty Expiration Date for claimed items of deficiency or defect;
36. Any alleged deficiency or defect for which there is no evidence of deficiency or defects at the time of the claims investigation; or which has been repaired prior to a (NAME REDACTED) claims investigation unless such deficiency or defect is considered by (NAME REDACTED) to be an emergency repair which was repaired by You after the Builder failed to respond within a reasonable time. Emergency items will be determined by (NAME REDACTED) considering imminent danger of resulting damage to the Home. Emergency items will not include items of comfort to You such as but not limited to problems with air conditioners;
37. Any condition which does not result in actual physical damage to the covered Home;
38. Diminished market value of Your Home.”
While many of the above items may sound reasonable when they relate to deferred homeowner maintenance, what is not said is more important. If the builder constructed the house in such a manner so that it was not code-compliant you may be liable for his sins. One example is that the builder does not properly grade the soil to provide positive drainage around the foundation perimeter. The foundation fails due to this lack of proper drainage. Even though you did nothing to cause this, you will be held responsible for not maintaining the proper grading and drainage, thus making your already lame foundation warranty void.
In almost every circumstance these useless warranties are written so that the myriad of defects which arise during the warranty period will not rise to the level of distress required for the warranty company to take any corrective action.
How To Avoid Being (Completely) Screwed When Buying A New Home in Texas
When purchasing a new home from a Texas home builder, you are entering a veritable mine field from which you will not escape totally unscathed, all prudent preparations on your part notwithstanding. Regardless how intelligent, street smart, savvy, or tough-minded you envision yourself to be, you are outgunned from the start. Your opponents are corporate production builders who spend more money on lobbying the Texas legislature than nearly any other group. The laws regarding home building are written to protect them – not you. Unconvinced? Let’s take a closer look.
When a conflict arises from your learning that your builder is shoddily constructing your new home (which is inevitable), you have little viable recourse. All builders’ contracts contain a clause that limits your legal action against them to binding arbitration. This is an expensive process that is heavily weighted in the builders’ favor. The arbitrators are always from the American Arbitration Association. This group is in close affiliation with the National Association of Home Builders (NAHB). From their site: “As the provider of choice for dispute resolution services, the AAA through its National Construction Dispute Resolution Committee (NCDRC), has worked closely with the industry to develop the Construction Industry Arbitration Rules and Mediation Procedures and other project specific approaches to prevent and manage conflict.” These rules are written by the builders and for the builders.
The building codes adopted by the various municipalities in the state of Texas are based upon those authored by the International Code Council (ICC). While, at first blush, appearing to be an independent code-authoring organization, further investigation reveals undue influence from the NAHB. Just one glaring example is that, from its inception in 2000, the ICC’s International Residential Code stated its purpose in 101.3 as “The purpose of this code is to provide minimum requirements to safeguard life or limb, health and public welfare.”
Now let’s watch the changes that occurred in 101.3 during subsequent versions.
The 2003 version states, “The purpose of this code is to provide minimum requirements to safeguard the public safety, health and general welfare, through affordability, structural strength, means of egress facilities, stability, sanitation, light and ventilation, energy conservation and safety to life and property from fire and other hazards attributed to the built environment.” This is an improvement. The 2006 version states exactly the same. All is well so far.
The 2009 version introduces a fly into the ointment: “R101.3 Intent. The purpose of this code is to establish minimum requirements to safeguard the public safety, health and general welfare through affordability, structural strength, means of egress facilities, stability, sanitation, light and ventilation, energy conservation and safety to life and property from fire and other hazards attributed to the built environment and to provide safety to fire fighters and emergency responders during emergency operations.” Now, the minimal building code, which is the worse way one can legally build a house, hinges upon affordability and not safety. And, the picture gets even more bleak.
Municipal Building Inspectors
When a municipality in Texas adopts a building code it becomes and has the force of law. The municipal building inspectors are tasked with the job of enforcing this code, or are they?
In IRC 104.1, we find, “The building official is hereby authorized and directed to enforce the provisions of this code . . .” So far, it sounds like the onus is on the building official to enforce the building code. But wait.
The rest of that citation goes like this, “. . . The building official shall have the authority to render interpretations of this code and to adopt policies and procedures in order to clarify the application of its provisions. Such interpretations, policies and procedures shall be in conformance with the intent and purpose of this code. Such policies and procedures shall not have the effect of waiving requirements specifically provided for in this code.”
That still sounds like the building official must enforce the spirit, if not the letter, of the code. However, on January 19, 2005, Greg Abbott, Attorney General of Texas (yes, the same bozo that would have you elect his sorry self for governor) rendered a rather specious opinion on the matter that concluded with this, “Local Government Code section 214.212(c)(1), which permits a municipality to adopt local amendments to the International Residential Code, does not limit the municipality to adopting only local amendments that are equivalent to or more stringent than the standards of the International Residential Code.” In other words the municipal inspectors can do as they please. The building code be damned.
Remember that the building officials work for the corporations that are the municipalities. It is their job to protect that corporations and not you. They are also stuck between the developers wanting to build in their jurisdictions and the politicians they work for. So who will be on your side?
Hire an attorney before you sign any paperwork with any builder. Not just any attorney will do. Your run-of-the-mill, paper-shuffling bar-passer will not suffice. You need an attorney who is experienced in dealing with builders and their contracts. If you need a referral, contact me.
Strike the binding arbitration clause. Add to the contract that your builder shall repair everything that your third-party inspector finds to be in conflict with the letter and spirit of the adopted building codes. You should also insist that the builder supply you with a complete set of the construction documents (blueprints). Do not fall for his story about them being copyrighted. While they are indeed copyrighted, the copyright only prevents you from selling the plans or using the plans to build a house, it does not prohibit your possessing a set of plans to the house you have bought. As the owner of the home your possession of the plans would fall under the doctrine of fair use.
Hire a competent home inspector. The minimum requirements for this inspector are, (1) Significant prior home construction experience, (2) International Code Council certification as an R-5 Combination Residential Inspector, (3) Licensed by the Texas Real Estate Commission or the Texas Board of Professional Engineers.
Grow a set of cojones. Take charge of the project from the outset, stay on top of every phase of construction, and do not succumb to the builder’s bullshit and outright lies. Take no prisoners. Make no mistake. This is an adversarial relationship you are entering into with your builder. He is not your friend.
If you follow the three steps above you will not end up with a perfect house. You will also not be on the receiving end of quality construction. These are unattainable goals in the current Texas home building milieu. You will, however, be in charge of an otherwise uncontrollable process that will result in a substandard house replete with defects.