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Quick history: new to the state as of this summer, made 4 house-hunting trips and among those put 3 offers on existing homes and each had an issue and never culminated with us ending up in a home, sadly. Husband finally convinced me to build, and I've always heard (whether correct or not) that building is a challenge, so I'm not totally convinced it is the right thing for us, but now my husband is more convinced that we should build (for various reasons, not just that we couldn't find what we were looking for).
Anyway, this thread is not about who is right or not, but rather:
1. Once you give a deposit to a builder, say after you pick floor plans and interior features, etc, does anyone know how long they can sit on that money without taking action (e.g. without applying for a permit)?
2. My parents (who are sometimes right and sometimes wrong) have a negative viewpoint and said, all builders take forever to move because they want to wait until they get 4-5 new home starts before they call in the contracting crew to actually build it. They are cautioning me that it may be months before they even do land clearing.
3. Is there any way to write-in that you want them to apply for permit by such-and-such a date or time period? Does that have to be drafted by a lawyer I suppose, right? Can a buyer's agent help in adding anything like timeline to the contract at all?
4. Are the answers to these questions different for custom builders vs. tract builders?
We do have a buyer's agent, but that person hasn't been helpful really, and even had less knowledge than us in some very important matters, so I want second opinions rather than solely relying on that person.
Sorry to sound so lacking in knowledge but I know absolutely nothing about building, and neither does my husband, but he doesn't seem to be as concerned as I am.
These are questions your buyer's agent SHOULD know. If she doesn't, she should set up a meeting with you, your husband, her and her BROKER IN CHARGE! These are not difficult questions and the contract you sign with the builder should address much of this.
And, don't hesitate to have an attorney review the contract and addenda. Drafting clauses and language outside the standard NCAR forms is very much legal work.
And just so you don't think these two fine realtors are pulling your leg....
I'm not a realtor, but they're right. I'd go a step further and say that I'd fire my buyers agent if (he/she) didn't have answers for me. Solid answers.
These are questions your buyer's agent SHOULD know. If she doesn't, she should set up a meeting with you, your husband, her and her BROKER IN CHARGE! These are not difficult questions and the contract you sign with the builder should address much of this.
Vicki
This ^^^^^
(but frankly, I'd probably want to fire the agent and ask the broker to let me out of the contract so that I can find somebody qualified.)
You should try to have your attorney escrow any substantial deposits.
Builders can and do fold with little or no warning.
Actually, this isn't a bad idea.
I think it depends on how much you are handing over to the builder and who the builder is. With so many smaller builders going bankrupt, giving money to a builder, you need to proceed with caution.
If the funds are going into the listing agent's escrow, that is a trust account and it is quite different than giving a builder a deposit.
I've only ever built one house, and that was in another state, but in our contract with our builder we specified both dates by which (a) construction had to begin, and (b) the house had to be substantially complete. On the first date, we had a right to terminate and have deposit returned if date was not met. On the second date, the builder would have to pay penalties to cover ongoing rent we would incur.
Is this a larger builder or a small custom builder. If it is a larger or national builder you probably won't be able to get anything into the contract, but a local company might be willing to do it. On the other hand, the large companies might have a better idea on when they can start as they have more capital usually.
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any recommendations for real estate attorneys?
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