Purchasing new construction home?

Question

We put a deposit on a new home. We decided to forgo a realtor because the builder was giving a lot of incentives to do w/out a buyers realtor. I was wondering what kind of obligation the builder has on building the house on time. I've heard horror stories about the construction being delayed 3/4months from the promised date. If that happens, is the builder obligated to do something for us?? Especially, since the builder is already getting payments for the house, even before we are able to live there. Thanks.

Answer 1

First of all, your builder contract should have language in it that states an approximate build duration... approx. 150 days in my area for a production home (not custom or semi-custom). Read your contract carefully!

Second... are you using a "construction loan" or an "end loan"? A construction loan has you at the bank each time you need to draw for the various milestone events in your build. An end loan is a loan that doesn't start until you close... all the while, the builder is funding the trades, the land purchase, etc.

Basically, it all comes back to reading your contract carefully. It should mention all the particulars. Just as a side-note, I've never seen a performance clause in a builder's own contract where they guarantee a home done on a certain drop dead date!

Best of luck to you!!

Answer 2

You entered into an agreement and if you signed anything you are bound by that agreement.
The way you are doing this purchase is risky. If the contractor fails to complete the house when it was agreed to, your only recourse is to spend more money by taking him to court.
I think that your mistake was to forgo the realtor in all honesty. The realtor has the ability to get the contractor to sign documents that assure you of price reductions if the house isn't completed in a timely fashion, and it doesn't cost you any more money. It sounds to me like your contractor was just trying to get out of paying his part of the realtors commission, and convinced you to do it.
You should have had an attorney also review the contract before giving a deposit to the contractor if forgoing the realtor. You put yourself in a bad situation doing things this way. I hope that your contractor treats you right, and things go well.

Answer 3

You got the incentives, and now you have to live with whatever you signed as an agreement. Check your purchase contract to see if there are any penalties which accrue to the builder for late completion.

If not, you have a problem. If nothing is in your contractual agreement, you get nothing if the house is delayed.

Do you STILL think it was wise to do this deal without professional representation ?

Answer 4

Of course the builder gave you "incentives" not to have a Realtor. The builder wanted you to have advice not from a local professional, he wanted you to get information from "experts" here on Yahoo.