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  • July 10, 2007 at 3:59 PM #9484
    flyer
    Participant

    I am new to the forum, so please excuse if this question has been answered before.

    We are in the market for a new home, and don’t know (especially after reading the posts here)
    when we’ll take the leap, but I wondered if someone might know if, when you place a deposit on a new home with a builder, in the
    6 months or so that it takes to build the home, you find it will not appraise for the original selling price on the close date, what the legal options of the buyer are at this point?

    Thanks!

    July 10, 2007 at 4:07 PM #65061
    Bugs
    Participant

    It depends on what terms you agree to when you place your deposit.

    July 10, 2007 at 4:07 PM #65122
    Bugs
    Participant

    It depends on what terms you agree to when you place your deposit.

    July 10, 2007 at 4:22 PM #65069
    Anonymous
    Guest

    Michelle Steffes

    Read you contract very carefully and determine exactly whether you can return all some or none of your deposit.

    July 10, 2007 at 4:22 PM #65130
    Anonymous
    Guest

    Michelle Steffes

    Read you contract very carefully and determine exactly whether you can return all some or none of your deposit.

    July 10, 2007 at 4:25 PM #65073
    SD Realtor
    Participant

    What Bugs says absolutely rings true. In general the purchase contracts that you enter into with the builder are quite restrictive. Many people who end up backing out because of cold feet or the shock of reality about the loan payment they are about to undertake do indeed lose their deposit. However if you can prove hardship of some type the lender may let you out of it. Furthermore if you really kick up and make a fight out of it and get an attorney then in all likelihood the lender will back off.

    Once again, read your purchase contract BEFORE you sign it. Take the contract and bring it to an attorney if you like or even a Realtor.

    You can even ask the salespeople your question you posed here and it would be interesting to see the response they give you. My bet is that they would give a blank look or say something like, “well that has never happened, you will not need to worry about that…”

    SD Realtor

    July 10, 2007 at 4:25 PM #65134
    SD Realtor
    Participant

    What Bugs says absolutely rings true. In general the purchase contracts that you enter into with the builder are quite restrictive. Many people who end up backing out because of cold feet or the shock of reality about the loan payment they are about to undertake do indeed lose their deposit. However if you can prove hardship of some type the lender may let you out of it. Furthermore if you really kick up and make a fight out of it and get an attorney then in all likelihood the lender will back off.

    Once again, read your purchase contract BEFORE you sign it. Take the contract and bring it to an attorney if you like or even a Realtor.

    You can even ask the salespeople your question you posed here and it would be interesting to see the response they give you. My bet is that they would give a blank look or say something like, “well that has never happened, you will not need to worry about that…”

    SD Realtor

    July 11, 2007 at 8:22 AM #65177
    Arraya
    Participant

    On a general purchase contract there is the “loan contigency” clause. That states if for any reason you can not get financing that you should get your deposit back. If you can not appraise at the requested price you can not get financing therefor should be able get your deposit back or a lower price. Lenders will not allow you to buy a home that is not worht the asking price. They do not like people being upside down in there home. I am sure the contractor would not mind however tha bank would block financing in a case like that.

    Now that is a general purchase contract, I am not sure how it may work on a new construction contract but I am sure there is a similar provision…

    July 11, 2007 at 8:22 AM #65239
    Arraya
    Participant

    On a general purchase contract there is the “loan contigency” clause. That states if for any reason you can not get financing that you should get your deposit back. If you can not appraise at the requested price you can not get financing therefor should be able get your deposit back or a lower price. Lenders will not allow you to buy a home that is not worht the asking price. They do not like people being upside down in there home. I am sure the contractor would not mind however tha bank would block financing in a case like that.

    Now that is a general purchase contract, I am not sure how it may work on a new construction contract but I am sure there is a similar provision…

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