I'm closing on new construction home, with walk thru and closing dates set very close together.?

Question

My builder told me that the walk-through for my new home would be on a Friday (24 Aug) - that my inspector should be scheduled on the Thurs (23 August) , and to get the report submitted to the builder 1 day later on Fri (same day as walk-thru). THEN the final walk-thru to be on the Monday (27 August), followed immediately by closing (an hour after final walk-thru). My gut feeling is - what work can possibly be done between the walk-thru on Friday and the final walkthru on Monday...and the closing set just 1 hour after the final walk-thru. The builder assures me that any work needed can be finished in hours and the final walk-through should not take more than 20 mins, and thus closing can be done just one hour later. I get the feeling the builder is in a hurry to close before the end of August for some reason. It is 5 August and the house is not even ready (floors, fixtures etc all not in). I need some advice as to whether this rushed timeline is typical of new home construction.

Answer 1

Yes, rushed timelines are typical. HOWEVER, you are never mandated to close if things are not completed to your satisfaction. That's the purpose of a walk through and inspection.

If there are unfinished issues which are not addressed by the time you reach closing, THAT is the time to raise a complaint and request an escrow amount be held until the work is satisfactorily completed. If you estimate that $10,000 worth of work remains, insist on an escrow of $15,000, to give yourself a cushion.

The escrow money will be paid by you to the title firm, with an agreement that it cannot be released to the builder without your signature and agreement.

Feel free to speak to the builder about your intentions, should he not have the work timely completed. If the builder refuses to agree to this escrow, your option is to refuse to close because he did not meet his contract on time.

Consult an attorney for further guidance.

Answer 2

Let me tell you the REAL story of what is going to happen.

If you look over your contract, I guarantee it probably addressed a buyer's home inspector's report and anything that you want fixed will be fixed at the BUILDER'S sole discretion, and the only requirement that the contractor has to have...is a Certificate of Occupancy to require you to close.

Everything that will be in your inspector's report, will most likely be a cosmetic issue, b/c in new construction, the city or county, has inspected the property numerous times at different stages, and all it as to meet, is code, and you'll know it does by the issuance of the C of O.

That is why the builder isn't concerned with the dates being close together, b/c anything your inspector finds, they are most-likely not going to fix...and if you read the fine print in your contract, you will most likely find that you agreed to that.

Dirty, but that's par for the course.

That is why on new construction homes, home inspections are actually a waste of money, b/c the city and county has already inspected it...and your home inspector only sees the finished product..and the builder won't fix it anyway. Other geographical areas might be different, but around here, they are all like that, and if you don't agree to it, they refuse to contract.

PS: Anything in the punch list at closing....make SURE that it's something that if it never gets fixed, that you are ok with either fixing it yourself or suing them over....these lists are rarely completed by the builder's representatives...once they get their money, the sense of urgency goes away.

Answer 3

Frankly, you will have to live in a home for a while to see all the mistakes and have them fixed. You're allowed for several months, sometimes up to a year or more to get those corrected if it's a new house. Ask what that time limit is.

Contractors do work fast so more than likely they will have everything in place when you do the walkthru. They must meet code and such so they know the rules, and if they don't have everything in place then you can sign the papers but you don't have to move in until it's finished.

If things aren't right later on or they don't fix it within a certain amount of time you can take them to court, and you can even move into a hotel till they fix it (but it must be a major item to do that) and then in court make the demand that they pay your hotel bill as well. But I don't think it will get to that. I just think you're nervous about a new home in general. Don't you have an attorney going with you when you sign the papers?

Answer 4

It sounds as if you are nervous about being rushed to close. Change the closing date to Tuesday.

Unfortunately, you won't know until Monday if everything on the final walkthough was completed. If things are not complete and you need to work anything out you won't feel pressured.

Typically in any real estate transaction you should have a final walk though 24 hours before close. Regardless of new construction or not.

Felicia Randall
www.cherrycapitalhomes.com

Answer 5

That's not a problem at all. You can go ahead and close on the property with the condition that any outstanding work is to be completed by the builder within a specified time.

Then, ask your lawyer to withold money for any unfinished work in the escrow account. Once the work is complete to your satisfaction, you can release the funds.

Answer 6

I dont honeslty know , but it does seem like he's trying to rush things along for some reason... Make sure things are the way you want them done, before you sign on the dotted line