New house gamblers note: The following has nothing to do with PHM.
Ask the builder if they have a 'Standards of Construction' document. The builder may call this document by another name, but its contents will be the same. Obtain this and read it. Pay particular attention to the term, 'standards of the industry'. Do not assume your house will be of the same quality as the builder's models.
Ask YOUR ATTORNEY to modify/delete the arbitration clause. If the builder is not willing to do this go elsewhere, or require that monies be escrowed to protect your interests. NOTHING in the documents you sign is designed to protect YOUR interests aside from the transfer of title. Fannie Mae and Freddie Mac will no longer purchase mortgages when the sale contract contains an arbitration clause. This should speak volumes about the risks involved in the purchase of a new house.
Ensure that your attorney, if you have representation regarding ANY aspect of your new house, is not a shill for the builder. Ask the attorney if he has represented, or is currently representing, other customers of the builder, has ever filed a lawsuit against the builder, has ever participated in an arbitration against the builder, has ever refused an arbitration with the builder, and what were the circumstances and results of any of these proceedings. Do not assume the attorney or the builder will behave in an honorable manner.
An independent, pre-closing house inspection will not protect your interests regarding leaking windows, a leaky roof, a faulty foundation, settling/heaving/shifting concrete flatwork, or other long term consequences of shoddy construction and other cost cutting measures.
Do not assume you are dealing with honorable people. Get an independent, second opinion regarding ANYTHING of substance related to your new house. YOUR interests are YOUR interests, only.
There is not a legal product available in the marketplace today that carries the degree of financial and emotional risk for the purchaser as does that of a new house.
Visit Homeowners Against Deficient Dwellings, HADD.com, WESH.com, Building Houses: Building Problems, Consumer Reports' research study: Housewrecked--link available at the HADD web site, 10 Things Your House Builder Won't Tell You, www.smartmoney.com/consumer/index.cfm?story=tenthings-jan00, How To Prevent A New House Nightmare, www.lakesidepress.com/dreams/section4.html, ourrylandhomes.com, and ANY search engine (your builder's name, defects, complaints, etc.) to examine the 'isolated' nature of this issue and to gain insight into the business practices of the corporate/public new house building industry and to protect your financial and emotional interests. Reading the court cases available on-line is a good idea, too.