Profile picture for nikmarkose

When is down payment due?

Hi,

I recently entered an agreement with a builder to purchase a new home in Gwenette county Georgia. I already signed a purchase agreement and put 3% down as good earnest money. On January 2012 I am going to sign my contract and the builder will start building and am told they estimate to  complete the home by April and am supposed to close on April 30, 2012. My question is, is my down payment due on closing date or when I sign my contract in January? From what I read it's on closing date. Is this true also for new construction home purchases? Thank You very much in advance for your reply.
  • December 21 2011 - Tucker
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Answers (7)

Best Answer

Typically not until closing, although it all depends on how your contract is written. Some builders also request increased deposits throughout the building process and/or option deposits if you select certain upgrades. All of this will be in the contract though, so make sure to read it carefully and/or get an attorney to look at it for you.
  • December 21 2011
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Profile picture for Sally English
To others purchasing new construction:

1. If you walk in th door of a model home, sales trailer or new home and are geeted by an on-site real estate agent,,,,,,,,, then you will have no buyer represenation in the tansaction.  

The Builders agent will not be looking out for your best interests and you will not get full discosure fom the builder.

A buyers agent could have given good advice about the new home purchase that would have probably given you a better deal - and it would cost you nothing.

2. If you have a disagreement with the builder and you do not have a buyers agent - guess who the on-site listing agent is going to side with.

3. Your down payment is due at closing.

4. Any money you deposit with the Builder is At Risk.  Builders in Georgia do (and have) gone bankrupt during the construction phase and buyers have lost ALL their deposit.

Sally English
  • January 21 2013
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Since you have an agent, ask all questions in writing and demand that the agent respond in writing. Ask specific questions about the risk of you losing your deposit. If you do not feel comfortable with the answers, don't do it.
Thank you for defending all of us overseas.

  • October 05 2012
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Profile picture for BrokerAppraiser
New construction deals I've done have a non-refundable deposit made at contract signing, Upgrades or additionsa are usually paid "as you go" and the balance is paid at closing via the mortgage route.

USAA is a fine insurance company, I use them and use their banking as well since '80 when I entered the military. As far as mortgages, etc - they just refer folks out so you're not really dealing with them, just a referral they have a contract with.
  • December 21 2011
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Profile picture for nikmarkose
@ Ofe Polack,

Thank You for your reply. Yes I am using a real estate agent that's provided by my lender USAA federal savings bank through their Movers Advantage program for free, as you may know USSA is a very reputable bank that caters to the military community. The thing is I am currently in Afghanistan and I have very limited options to contact my agent or my lender because of limited communication means here in country. That's why I rather come here and ask this great community. I am using my own lender even though the builder offered me their own, I politely declined. Thanks again
  • December 21 2011
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Profile picture for Ofe Polack

Pity you are not working with a buyer agent, so you had somebody on your corner when you signed your offer.  Do you know if you are buying a turnkey property or you are purchasing on a construction loan?  On a turnkey, you would have given a certain amount to be held in escrow and the downpayment would be paid at closing.  On a construction loan, several payments are made between the time of offer and closing, then at closing the property is transferred to a conventional loan.  In any event, that decision was already made, now all you need to do is have a talk with your lender with your contract in hand, so that he can explain the details to you.  By any chance are you using a lender you selected on your own, or the builder's lender?

  • December 21 2011
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Profile picture for nikmarkose
Thank You for your reply. I will do that!
  • December 21 2011
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