Is this the norm for AZ builders thesedays?? (Phoenix: short sale, real estate) - Arizona - Page 2 - City-Data Forum

altus2006 · 03-03-2009, 02:32 PM

Quote:

Originally Posted by TIFF116

Ok Thank you. I haven't signed anything. I'll add this to my long wish list. It's worth a try, but Im not holding my breath!

I would not give any builder that kind of upfront money now. Too many are going bankrupt and getting back your deposit would be difficult at best.

altus2006

Ponderosa · 03-03-2009, 02:35 PM

Quote:

Originally Posted by TIFF116

I'm not sure what a security title agency is, I will have to research that to see if it is an option. But I am not optimistic because it states in the wonderful contract something like... your earnest money is not going into a neutral escrow, it's going to our bank, we are going to cash your check and use your money and you wont get it back! I guess they can do that, since they are their own lender. Is this even legal or heard of??

The clause you paraphrase is exactly what you need to be concerned about. It is perfectly legal. Any one of these builders could go BK these days and if they have your deposit, you can kiss it goodbye.

You can negotiate with them over the escrow - or anything else. You put your funds in a third party escrow account - usually with a title agency and they pay out according to terms of the contract. It is a very good idea if your builder will go along. They might, but I think they will be less likely to reduce the escrow. Builders have been burned badly by buyers who commit to purchase and then back out when they find a foreclosure for less.

altus2006 · 03-03-2009, 02:38 PM

Quote:

Originally Posted by thedreamteam

And when it comes to resale a 2009 home will be woirth mroe than one that is 2-3 yrs old.

This is not true. Condition and location are more important when figuring price than age.

altus2006

TIFF116 · 03-03-2009, 03:36 PM

So basically I should just walk. It's seems like too many risk and I already have a bad feeling. I was already going to comply with their crazy contact, then the sales rep. started giving me grief over the lot I chose and tried to make me pay for another elevation I didn't even like, cause the neighbor had the same one blah..blah..blah.. Still love the home and community, would it be easier to wait for an inventory and make a deal and quick close with that?

altus2006 · 03-03-2009, 04:04 PM

Quote:

Originally Posted by TIFF116

So basically I should just walk. It's seems like too many risk and I already have a bad feeling. I was already going to comply with their crazy contact, then the sales rep. started giving me grief over the lot I chose and tried to make me pay for another elevation I didn't even like, cause the neighbor had the same one blah..blah..blah.. Still love the home and community, would it be easier to wait for an inventory and make a deal and quick close with that?

Run now.

altus2006

rjrcm · 03-03-2009, 04:08 PM

Before walking, it's worth a shot to press for modifying the contract to hold the earnest money in an escrow account at a title co. All they can do is say no. Otherwise, wait for spec where you can get a quick close.

Ponderosa · 03-03-2009, 04:16 PM

Quote:

Originally Posted by rjrcm

Before walking, it's worth a shot to press for modifying the contract to hold the earnest money in an escrow account at a title co. All they can do is say no. Otherwise, wait for spec where you can get a quick close.

Yes, of course, if you like the house. The earnest money with builder is standard practice - it is not some scam. If you don't want to do that then tell the builder that you will only buy the house if you can place the earnest in a neutral escrow account. Then decide what to do.

Greatday · 03-03-2009, 04:34 PM

Security Title is the name of a Title and Escrow Company in Arizona

I would suggest, along the lines of the ther poster suggestion, that you request, in the contract, that any monies you put up be placed in a neutral trust account with any of the licensed Title / Escrow companies.

TIFF116 · 03-03-2009, 04:48 PM

What are the advantages of using a neutral escrow, if it states in the contract that they are entitled to any earnest money?? Here is the the line exatly...(At least it is up front, honest & in big bold letters. It sounds like they need my $ to fund the build of my prospective home!

SUCH MONIES WILL BE PAID DIRECTLY TO SELLER AND MAY BE USED BY SELLER. THIS MEANS BUYER
ASSUMES A RISK OF LOSING SUCH MONIES IF SELLER IS UNABLE OR UNWILLING TO
PERFORM UNDER THE TERMS OF THE CONTRACT.

Captain Bill · 03-03-2009, 06:35 PM

Quote:

Originally Posted by TIFF116

What are the advantages of using a neutral escrow, if it states in the contract that they are entitled to any earnest money?? Here is the the line exatly...(At least it is up front, honest & in big bold letters. It sounds like they need my $ to fund the build of my prospective home!

SUCH MONIES WILL BE PAID DIRECTLY TO SELLER AND MAY BE USED BY SELLER. THIS MEANS BUYER
ASSUMES A RISK OF LOSING SUCH MONIES IF SELLER IS UNABLE OR UNWILLING TO
PERFORM UNDER THE TERMS OF THE CONTRACT.

If they negotiate putting the money into an escrow account, there must be a clause that states that the money is fully refundable.

However, what they're telling you is that they need your money for working capital. That would be my red flag to run, not walk, away from that builder.