Essential Things to Know About New Home Builder Contracts
New home builder contracts differ from resale contracts. They are written in favor of builders by the building attorneys. Like with any business agreement, it's crucial to understand every detail before agreeing to the terms and conditions.
Understand the fine print to know the risk before signing one. Here are crucial things to know before signing a new builder's contract. The contracts offer little or no builder flexibility.
You cannot customize your house plan or make changes to the construction. Instead, you are only able to pick from preselected options given by the builder. You also have a short period to get your earnest money back if you pull out of the contract. It is non-refundable in most cases, unlike with resale contracts, which should be kept in mind when making your decision to sign.
The contracts provide for 30 days to pursue a loan-out. It is unaffected by appraisal or inspections. You should consult experts to avoid the risk of paying more than your property's value. Buyers can withdraw or demand repairs in resale contracts without losing money. In financing, the interest for resale is locked within 30 to 60 days, while the new build takes nine to twelve months.
