Realtor Austin Texas
Here is the problem. Contractors schedule construction on plats based on past sales volumes, timing and projected sales, given the economy. Historically, people are always trying to get out of contracts. You canâ€™t believe the number of reasons or excuses that are given. It is the nature of new construction. It is very difficult for contractors to schedule out construction on a new plat because of commitments that have to made to sub-contractors whose very financial existence may well depend on the general contractors projections or construction start commitments. So, to combat the â€œI love it today, want out tomorrowâ€ phenomenon, builders have retained attorneys to write iron clad contracts for Ernest money to be sure that a buyer with â€œbailitisâ€ (or â€œbuyers remorseâ€) will give up their Ernest money. If you were a contractor, you would as well. They have to have someway to cover the cost associated with failed transactions. In the retail business, we call this a â€œrestocking feeâ€. Doctorâ€™s call it a â€œmissed appointment feeâ€ and attorneyâ€™s may incorporate a â€œnon-refundable clauseâ€ into their contracts or retainer fee agreements.
I am from Washington, not Texas, so I am unfamiliar with state regulations pertaining to new construction commitments typically used in new construction. But, this issue is common in every state. My guess is that whatever your reason for bowing out, the contractor could take your earnest money. Your solution thus rests with the hope that your circumstances, once conveyed to the right individual, will prove to be what it takes to release your funds. Throw yourself at the mercy of the court (so to speak).
Now, if your original purchase required the addition of custom items to the home, there is usually a separate contract (or provision) that addresses that issue specifically. Construction supplies are usually ordered far in advance of construction. If THAT was involved in your contract (or is PART of what you have defined as Earnest money), the odds are you will have NO moral or legal ground to stand on to get that money back. Thus, re-securing that portion of your financial commitment may prove impossible regardless of your circumstances or the effectiveness of your appeal.
I agree with Dee that most likely those evil developers won't give it back. but try, try try....
To be honest, you usually can't get out of a contract with a builder if it's for medical reasons. Those reasons would have needed to be outlined in the contract itself. I highly doubt it was. Also, builders are not governed by the Texas Real Estate Commission (TREC), which is how agents are governed, so you don't have the same remedies. They are under the Texas Residential Construction Commission (TRCC), so you can call them for info about any builder. http://www.trcc.state.tx.us/default.asp
I wonder if you can get your earnest back due to lack of financing since you may not qualify. You may want to call your lender to get a letter. Again, this would need to be in the contract you signed, but it's worth a shot.
If you have a Realtor then have them draw up a Release of Earnest Money and a Termination of Contract. Regardless of whether this was put in writting under the builders contract or a TREC contract, both forms will express your intentions clearly. On another note, I have never heard of someone backing out of a contract for medical reasons, so you should try to claim financial troubles! Usually there is a clause that states that you are able to back out and are entitled to you Earnest Money refunded ONLY if you CAN NOT obtain FINANCING, so you would need a denial letter from your lender.