We are interested in building a home in an "almost" finished development. A few lots are left.

NitaE
Contributions:4

Will we be required to get an approval for home completion. How is the builder paid during the building stage? Will up front money be required such as "land cost" or will the bank withhold until the home is completed? We will sign an agreement of sale. But, what does that really mean until the home is complete and we sign a purchase agreement?

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April 11 2011 - US

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Replies (4)

Thomas Hall, "Tennessee Loans"
- 0.0/5.0
Contributions:381

It sounds like you are just going to be purchasing the home when it's completed. In these cases the builder requires an upfront deposit. The builder builds the home on his own credit and then sells it. If you back out of the transaction before the home is completed you will lose your deposit.

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April 11 2011

NitaE
Contributions:4

Thanks so much for your quick response!

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April 11 2011

Kim Bregman, "optimaproperties"
- 5.0/5.0
- (5 reviews)
Contributions:31

I agree with Tom's answer regarding the purchase but would also like to advise you that you will more than likely be entering into a "developer" contract which is notoriously one-sided with most of the terms benefiting the builder/developer. If you walked into the sales office without a Buyer's Broker representing you, then the person you are dealing with works for the developer as well. You do not have anyone representing your best interests and are not even using a BAR approved contract.
I would STRONGLY recommend that you consult with an attorney before you sign any agreement and thoroughly check out the developer to ensure that they are financially stable and well capitalized. At a minimum, I would try and negotiate that your deposit is held in Escrow by your attorney and not in the developer's accounts.

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April 12 2011

NitaE
Contributions:4

Thanks for your clear and knowledgeable advice. You are right and I did NOT sign the dual agent agreement that was reconfigured to be a "buyers" agent agreement. The builder's agent has been the only individual we have been talking to. While more than lovely as well as congenial, I was uncomfortable signing knowing she has a financial relationship with the builder. We are considering looking for a Buyer's Realtor or just a real estate atty to work with us in the area.