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New Buyer In…, Home Buyer in Clarksburg, MD

Do I need a real state attorney for approx. $3000 earnest money deposit for a $300,000 new townhome under construction? I do not have a realtor.

Asked by New Buyer In Clarksburg Md, Clarksburg, MD Mon Dec 26, 2011

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Yes, especially if you are a first time homebuyer. You need someone who has experience to know what looks weird and what is normal. I've seen first time homebuyers go directly to the SELLER's agent and when I looked at the contract I noticed that the SELLER's agent marked all the boxes and terms in favor of ...you guessed it... the SELLER. If you are new to real estate, you would save yourself many nervous sleepless night if you had your own BUYER's agent who had your best interest in mind.
1 vote Thank Flag Link Mon Dec 26, 2011
The deposit you put down is only one reason to hire a lawyer to represent you. The others include negotiating the terms of the sales contract, working with your bank to make sure the money for your mortgage comes through at the right time, and recording the deed for you after you close on the home.
1 vote Thank Flag Link Mon Dec 26, 2011
Even and maybe even more with new construction, you need a REALTOR. I would encourage you to go over the contract carefully, with an attorney if you have questions and I would feel more comfortable if you had your deposit held with at least a title attorney separate from the builder. Quite a few builders have their own financing and title partners and the buyer is enticed with discounts but then are they fully represented? Not if everything is held so close with the builder. Be cautious, read through, and understand what you've signed.
1 vote Thank Flag Link Mon Dec 26, 2011
Dear New Home Buyer:

We have a team of realtors and a real estate attorney on on team that will be able to give you some advise. This is why it's so important to have a buyers agent represent you on any purchase of real estate. Please contact me and I will be very happy to see if I can assist you or at least point you in the right direction.

Happy Holidays!
0 votes Thank Flag Link Tue Dec 27, 2011
To the New Home Buyer and anyone else watching this post...

I'm sorry my answer has ruffled feathers. I don't engage with this website to debate with an out of State agent about best business practices in Maryland regarding New Home sales. I gave my professional advice about spending money on an attorney to review the contract and the buyer can either take my advice or not take it just as he can do wtih anyone's advice resulting from this question.

The builders in the PUD's are large builders (Beazer, NV & Ryan, Advantage) and they do not allow any changes to their contracts and the contracts aren't complicated. The buyer can read it and understand everything it says just as a Realtor can. I've seen small builders allow changes to the contract but the large tract builders do not. And the sales agents are trained to explain everything in the contract (been there, done that) so the buyer understands everything. I've sold hundreds of new home on both sides of the table (as a builder agent and as a buyer agent) and a New Home contract and it's addendums is longer than a Resale Contract and all it's addendums but it's not complicated nor are they written to screw over buyers.

Here's an example of how the builder has to protect themselves in a contract: For a large home to be built, some builders (NV) oftentimes require 20% into the deal to start the build project... why? because each buyer customized his/her home with specific choices in cabinets, carpet, hardwood, granite... they design the home to their taste. I've seen some pretty weird choices, believe me! Let's say the couple has a big fight and break up just before settlement (I've seen this happen) and don't end up buying this house. If the builder is stuck with this house, the builder needs some financial recourse because it's highly likely the choices these buyers made customizing their home will be a hard sell. Not too many new home buyers want to buy a home someone else has customized unless they made amazing choices. So, it's this sort of scenario that a buyer needs to be educated about. If he/she decides not to move ahead with the purchase, be prepared to lose the deposit.

And this would be my FINAL ANSWER on this question. :-) lol

Cathy Chapman
cathy@cathychapman.com
0 votes Thank Flag Link Tue Dec 27, 2011
Cathy,

I'm also a broker, and frankly the # of years you have been practicing real estate makes it more concerning that your would make such a statement. Your advice has nothing that is state-specific, Yes... attorneys do the conveyance here in MA, which is utterly irrelevant to the subject, we still advise buyers to have an attorney to review and modify the contract, even though most are relatively standard. But as you know, new construction is different and the New const, contract we most recently signed was about 30 pages... of which there were protections our R.E. atty was able to put in, despite the builder and their atty not realizing the practical application of some of the language if the bleep ever hits the fan. So your point that nothing can be changed or protected is also not always true. My point, which has no bearing on state lines is that it is not responsible to tell a buyer to sign a contract ( and a one-sided builder one at that ) without at best having some protections.. or at WORST, having a clear understanding of their responsibilities and risk.

If you have any doubt about theadvice you have given... please ask your broker or Realtor board whether or not this statement " it is my professional opinion that you do not need an attorney to review the contract since it's written by attorney's already and yes it is written in favor of the builder " is one they agree with or not. I probably should not have made my response with reference to you or your answer personally ... but I stand by the overall point.
0 votes Thank Flag Link Tue Dec 27, 2011
Get your own Realtor instead. You can get a lawyer, but you may have to pay for that out of pocket. Having your own agent walk through this process with you could be thousands of dollars into your pocket, rather than potentially losing money going it alone.
0 votes Thank Flag Link Mon Dec 26, 2011
Hi Mikel,

Clearly real estate is conducted differently in Maryland than in MA. I believe in the northeast, Attorneys are always used in transactions. Anyway that's what my sister from CT informed me. So, I know we do things totally different in Maryland than in CT and I'd assume it's the same in Massachussetts. I think we agents need to stick to our home base (STATE) when offering advise. I've been a BROKER since 2005, licensed since 1986. I am confident in the advice I offer on this website.

Cathy Chapman
cathy@cathychapman.com
301-514-6839
0 votes Thank Flag Link Mon Dec 26, 2011
Wow... terrible advice Cathy. Sorry to put it so bluntly. You just told this potential buyer it's a one-sided contract but to sign it anyway without representation. First of all ... many items can be modified and even if NOT, then at least the buyer has a right to accurately assess the risks involved. Please be more careful in your advising someone not to seek legal advice, especially when you've disclosed you have a prior relationship with the seller.
0 votes Thank Flag Link Mon Dec 26, 2011
As others have said, you most likely do not need a real estate attorney, most of the new construction contracts are pretty straight forward. You can ask the listing agent to review a blank contract before going in to sign if you would like to see what is involved. I would recommend having your agent to look out for your interests, especially since a buyer's agent does not get paid unless you go to settlement, it does not cost you anything to have an agent assist you in your home buying process.

Good luck!
0 votes Thank Flag Link Mon Dec 26, 2011
I agree with Cathy - you don't need to spend money on an attorney to get thru the purchase process. The contracts are pretty basic and non-negotiable. There will be a settlement attorney to handle the closing that represents the contract, if any issues should arise.

However, if you are trying to get out of your contract, and the builder is not releasing your deposit, then you may need an attorney. The question is, will their fees make it worth fighting to get back $3000?
0 votes Thank Flag Link Mon Dec 26, 2011
Dear New Home Buyer,

It's me again. :-) I've worked as a Sales Agent for the builder so I am familiar with the New Home Sales Contract and again, there is nothing an attorney is going to be able to change nor is there anything he/she can do at this juncture to serve your best financial interests. You will spend money unnecessarily. If you have issues with your home after-the-fact, then you hire an attorney.

A REALTOR serves as a negotiator, advisor, and counselor, not an attorney therefore, it is my professional opinion that you do not need an attorney to review the contract since it's written by attorney's already and yes it is written in favor of the builder, however, it is not written to screw over a buyer but rather to clarify if, for example, a certain building material is not available at the time of the building process that they can substitute another building materials that is either equal to or greater than the quality of what was spec'd in.

If you'd like to call me with questions, I'd be glad to answer them.

Cathy Chapman, Certified New Home Specialist
cathy@cathychapman.com
301-514-68739
0 votes Thank Flag Link Mon Dec 26, 2011
The answer is yes since you don't have a realtor representing you and your best interests. Contracts for new homes in Maryland are written by the attorney(s) for the builder. Especially if you have not purchased real estate before you need an attorney to help you understand what you are signing including all the disclosures the builder is required to give you. I recommend you call Village Settlements, Inc. in Gaithersburg. They have a 24-hour law line, one of their attorneys will respond quickly and provide you with the information and guidance you are looking for. 301.406.8972

Good Luck!
0 votes Thank Flag Link Mon Dec 26, 2011
Dear New Home Buyer,

Having a specialty in New Homes, I would not recommend you spend money on an attorney. There is nothing you can change in the builders contract. Essentially, the contract is written to protect the builder and you by spelling everything out very carefully. The sale agent should go through the contract carefully with you to make sure you understand everything.

What you lose in not having an agent on your side of the table who has expertise in new home sales is this: no one to educate you on the best options to bring you dividends in a future sale, no one to negotiate on your behalf (a third party always has better leverage than a buyer themselves), no one to educate you about the difference between builders and the details that make a difference to a lot of buyers in the resale market, tricks in saving money on options and many more I won't get into here since it's a mute point now for you.

I wish you the best and hope you enjoy your new home!

Cathy Chapman
cathy@cathychapman.com
301-514-6839
0 votes Thank Flag Link Mon Dec 26, 2011
Short answer: Everyone in a transaction should be represented. My suggestion is you start with a Realtor. I have listed and sold real estate in Clarksburg and would be glad to answer your questions in person. Give me a call.
Web Reference: http://susankelly.lnf.com
0 votes Thank Flag Link Mon Dec 26, 2011
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