Down Payment for New Home Construction?? (Leesburg, Purcellville: sales, real estate, renting)

[PrettyinMyOwnSkin]

We are strongly considering purchasing a new home with Khov to be completed mid-summer. The sales person is requesting a downpayment of 5 percent now, and 10 percent in 2 months. The home purchase amount is upper $500k. We definitely have the funds to accommodate the request, but is this an excessive amount for new home construction? I want to make sure the builder has enough funds and resources to complete the community they are opening.

Thanks!!

[bellasdad]

Hi, we're considering new home contruction as well but with NVHomes. They require 10% earnest money at contract then another 10% at settlement (for conventional loans). Depending on your financial situation, they will accept less than 10% at contract then the rest at settlement.

That said, the 5% KHov is requesting does not appear excessive. I'm not sure why they would require another 10% 2 months later. I guess different builders/lenders have different requirements.

[Riley09swb]

Where is the development? When we did new home construction we had to do 5 % but that was in 2005/2006. We also had to pay 15 % of our design center options as well.

IF you do go with Khov stay on them as the house gets built. We are currently in a Khov home (renting) and there is no way we would ever buy this house. The construction is shoddy. Some of the walls aren't straight and it's not well insultated at all. The windows are crap. Not a well built home at all.

[PrettyinMyOwnSkin]

The development is River Pointe in Leesburg. The salesperson claims the former construction manager from Pulte homes is now working with Khov for this development........ I initially requested the workmanship of KHov from this forum some weeks ago, unfortunately NO ONE responded. The reviews of KHov on the internet is quite mixed, mostly negative. I guess I'm swayed by the location and keeping my children in the same school. Maybe I should get a pre-existing home.....SIGH. Thanks for the feedback!!

[Riley09swb]

We are in Purcellville and Khov built most of the developments around town. All the houses pretty much look the same and are built the same shoddy way. We have a friend that bought one in 2004 and he says if he had the chance to go back he wouldn't have bought it. I do get trying to keep your kids in the same school. I will be there next year.

I must of missed seeing your other post asking for feedback.

[Tish Thompson]

New construction or resale, if your purchase is being financed, you're subject to the same rules....which are dictated by banks. New homes sales reps typically are not real estate agents and aren't required to make the disclosures that we are....they work for the builder, not you...so don't be surprised that they don't tell you much about the process.

Originally Posted by PrettyinMyOwnSkin

We are strongly considering purchasing a new home with Khov to be completed mid-summer. The sales person is requesting a downpayment of 5 percent now, and 10 percent in 2 months. The home purchase amount is upper $500k. We definitely have the funds to accommodate the request, but is this an excessive amount for new home construction? I want to make sure the builder has enough funds and resources to complete the community they are opening.

Thanks!!

[peanutrach]

Originally Posted by PrettyinMyOwnSkin

The salesperson claims the former construction manager from Pulte homes is now working with Khov for this development.

I wouldn't be so excited about someone from Pulte coming to oversee the building of your home. We purchased a new home from Pulte last year and are dealing with several issues around leaking windows and ceiling, among other things. Our neighbors are experiencing similar issues. We were not thrilled when all of these issues came up since you expect most things to be close to perfect when purchasing a new home. This will be the last new home we buy.

[ZakAttack]

We went with KHov also 3 years ago. All in all, pretty happy about the construction, absent the horribly insulated gas fireplace "doghouse" portion, which we are addressing now. We paid for several private inspections along the way of the construction process, which I would highly recommend (as "their" inspection is a joke) at the intervals of when they pour the foundation, pre-drywall, and final inspection. My inspector caught a ton of things, mostly minor but KHov fixed them all.

Regarding down payment, typically KHov will ask or "require" a certain % up front, but anything outside of that is considered an offer that they can either negotiate with you on, or refuse your contract. We put down 5,000, that was it.

[NYerinLondon]

Originally Posted by PrettyinMyOwnSkin

We are strongly considering purchasing a new home with Khov to be completed mid-summer. The sales person is requesting a downpayment of 5 percent now, and 10 percent in 2 months. The home purchase amount is upper $500k. We definitely have the funds to accommodate the request, but is this an excessive amount for new home construction? I want to make sure the builder has enough funds and resources to complete the community they are opening.

Thanks!!

In my experience--and it is merely that, my experience--5% earnest money is standard on new home construction. As others mentioned, you may have additional requirements relating to upgrades. Your purchase agreement should cover these points.

Their ask on the additional 10% is definitely subject to negotiation and should be considered in light of all the other terms of the agreement.

As others mentioned, you will typically supplement the 5% with your additional non-financed portion of the purchase amount (say, 15%) at closing.

Good luck!

[stpickrell]

Originally Posted by PrettyinMyOwnSkin

The development is River Pointe in Leesburg. The salesperson claims the former construction manager from Pulte homes is now working with Khov for this development........ I initially requested the workmanship of KHov from this forum some weeks ago, unfortunately NO ONE responded. The reviews of KHov on the internet is quite mixed, mostly negative. I guess I'm swayed by the location and keeping my children in the same school. Maybe I should get a pre-existing home.....SIGH. Thanks for the feedback!!

I assume you've factored in the school re-zoning -- I assume you are looking to move within the same ES zone?

As I've never considered new homes when house-hunting -- same drama, higher price, usually less attractive (for me) location, I had nothing to add for your KHov post -- sorry.

I would get people -- an attorney you can trust for the legal side and a home inspector you can trust for the construction side -- to represent YOUR interests.

Good luck
S.