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Background: Wrote a contract to build a home with a well-known national builder in end of April and at that time, permitting was going to take 2 months and construction about 6-7 months so were looking at January closing. Home is being built in FL.
We had previously booked X-mas travel plans and are scheduled to be out of the country.
Now, builder is hinting at invoking a contract language letting us know we will be in-default if we don't close on 12/29. I told the builder that we are back on 01/07 and we can close the next business day provided I schedule a final inspection and everything turns out OK.
Why is the builder insisting on closing 12/29? perhaps, financial year end closing? Any recourse for us?
Please don't tell us "hire a lawyer" or "do you have an attorney or real-estate agent".
I think that I know the builder. They did the same thing to my wife and I. Buy one of those devices that checks the wiring by plugging it in. Drop your keys in the middle of the tiles. Our tiles have a suspicious hollow sound. Make sure that all of the hardware is there for hurricane shutters. Look for cracks in the tiles especially around the toilets.
The builder is obviously being pressured by upper management to shove as many closings into the year 2017 as possible. DO NOT close in a hurry and DO NOT close until everything on the punch list is 100% correct and you're happy with the house. Once you close, you've accepted the house as is. Everything from that point on is covered under warranty. Warranty does not cover everything especially cosmetics. Any details from the punch list will most likely never get done as warranty will not finish the punch list. The builder is not in a position to make any demands on you. Frankly, I'd tell them you're not going to be in town to close and they can wait. More than likely, the house will stop as soon as they get your response and the efforts and resources will be on other houses to make them close 2017. Expect a delayed closing in January. This is typical at every year ending for builders. This is where they make their bonus checks. The more closings, the bigger the bonus checks. Some of these guys will hammer out a 6 figure bonus check. Get the idea, now.
I know if I was building a house, I would be ready for closing any day and wouldn't be takin any international vacations. I wouldn't be planning a vacation at all near the end...so much to do with moving!
This is my take on it. I suggest doing yourself a favor and postponing the trip. Take care of the important details first and in person, then you can relax on the vacation, without worrying about how someone else managed your affairs. Get yourself moved first, too and not have the prospect of that dampening your fun on the trip.
As an agent, I would probably decline performing the POA you suggest.
Conflict of interest could not be clearer than an agent signing off on consumer documents to get paid.
Yeah, I was curious about this when it was mentioned earlier -- I had a client that needed a POA, and couldn't understand why I couldn't be his POA. Broker was adamant -- absolutely not. No argument from me -- way too many opportunities for "misunderstandings" and conflict of interest.
1. Close wherever you are....no need to be in the same location.
2. Have someone else close for you....Power of Attorney works well.
3. Close before you go.
4. You may want to be in the house to get your homestead exemption for 2018.
5. See if title company will allow for video closing.
6. Change your travel dates.
7. Fly back for a day to close.
Are they really going to be ready by December 20th for example for you to do your home inspection?
Since Hurricane Irma, the builder has been rushing thro' homes to complete and there is concern about the quality being affected and hence, we want to hire a home inspector a week before closing.
If we need to close on 12/29, we need to hire inspector to perform inspection the week before(12/22) which means the home has to be ready few days before 12/22 say 12/20 and 12/20 is only 2 weeks out from today. Right now, I would say home is about 80% done and maybe with more bodies, you can get it done in 2 weeks.
Penalty is $500 per day and for 9-day delay we are looking at $4500 penalty. Again, if it's per business day, penalty will be lower. Contract simply says per day. Am assuming they can't close on holidays and weekends.
It will cost us 20K to change our travel plan as it's non-refundable. We booked this vacation in April so we got a good deal.
Paying 4500 is no-brainer considering we would be out 20K.
Do we have any leeway in negotiating a middle ground? We can fly back but will incur cost.
I don't know what incentives the builder has, to close on 12/29 - would it be more than 20K on a 500K home?
Since Hurricane Irma, the builder has been rushing thro' homes to complete and there is concern about the quality being affected and hence, we want to hire a home inspector a week before closing.
If we need to close on 12/29, we need to hire inspector to perform inspection the week before(12/22) which means the home has to be ready few days before 12/22 say 12/20 and 12/20 is only 2 weeks out from today. Right now, I would say home is about 80% done and maybe with more bodies, you can get it done in 2 weeks.
Penalty is $500 per day and for 9-day delay we are looking at $4500 penalty. Again, if it's per business day, penalty will be lower. Contract simply says per day. Am assuming they can't close on holidays and weekends.
It will cost us 20K to change our travel plan as it's non-refundable. We booked this vacation in April so we got a good deal.
Paying 4500 is no-brainer considering we would be out 20K.
Do we have any leeway in negotiating a middle ground? We can fly back but will incur cost.
I don't know what incentives the builder has, to close on 12/29 - would it be more than 20K on a 500K home?
You signed that legal binding contract. You can always give POA to someone to sign the closing documents or you can sign them in advance. The choice is yours. No idea why you'd plan an international vacation while building a house especially at the end, but you did so now you need to figure out how to deal with it. You can speak to your real estate attorney about being POA, trying to negotiate your contract, etc.
Builders don't disclose what their incentives are. They're probably trying to get as many closings done by the end of the year as possible to make their books look better. The builder has 500,000 reasons to close on a $500K house.
The builder has 500,000 reasons to close on a $500K house.
I understand they want to close by year-end. what are the other 500,000 reasons?
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