You have received many good responses to your question. I believe that you will be able to determine the best course for you and your family from them. The highlights I would suggest are:
1. Always consult a professional on a purchase of this size, they can advise you of potential issues such as this.
2. If you did use a Realtor, please contact them immediately to review your contract terms with you.
3. By signing the builders contract, you have entered into a legally binding agreement with them. Read over your contract to see what your options are, as they will be clearly stated.
4. If you did not use a Realtor, then I suggest contacting the builder's on-site salesperson.
5. If you are unable to get your earnest money back you really only have 2 choices. Take a loss on the money by cancelling the contract OR move forward with the home and continue building.
If you continue building, you could re-sell the home, lease the home, or if your move out of the country is through your job you may qualify for relocation assistance. If you think you qualify for relocation assistance, contact your Human Resources manager at work.
Good luck out there!
Please contact me at 214-418-0180 if I can be of further assistance.
Coldwell Banker, Jane Henry Realtors
I agree with Kevin: Talk to you real estate attorney. You may or may not be out luck, depending on the builder's specific contract.
Builder contracts are very tight and strongly favor the builder. Unless the deposit is very large, it would be hard to hire an attorney. You might be able to pay an attorney a nominal fee to simply review the contract to adivse you of the likelihood of success.
From your description, I would lean toward the probablility that the deposit is forfeited.
Perhaps your stint out of the country will bring greater things than that deposit could ever represent. :)
Depending on the builder, you may be able to negotiate the transfer of that earnest deposit to a new home site to start the construction process again. Would this be an option as you are moving out of the county for several months? The backyard was an objection that I think that you could use as leverage to have a builder agree to build you another home with a transfer of earnest deposit.
I will give you great advice. You have signed a legally binding contract. Without know EVERYTHING that is in the contract, I can't answer. The advice I would give my client would be seek out the opinion of an attorney.
Earnest money refund is a sticky issue. If you had what we call an option period built into the contract then you could cancel at any time within that period (typically 7-10 days) and get a full refund of your earnest money for any reason what-so-ever. If the contract didn't contain that clause then it will be much more difficult.
You should talk to an attorney about the backyard issue. It might be something to hang your hat on.
Good luck and I hope you get it back,
RE/MAX Bryan-College Station
It does not sound like you have cause for terminating the agreement. You will have undoubtedly signed off on the lot choice, property dimensions, placement of the house on the lot, etc. Further, just because your plans have changed, that doesn't mean you are not breaching the agreement you had in place. With the woes in the mortgage industry and many markets being short on buyers at present, it could be a very difficult task to persuade the builder to release you from obligation with earnest money intact. Another crucial factor to consider with new builds. The earnest money is not in a neutral escrow account. It is being utilized by the builder for construction costs, marketing, etc. Much more difficult to get your funds returned from the other principal in the agreement than a third party. Lastly, did you know that in most cases, the builder will further insulate itself by specifying that you risk losing your earnest funds if the builder is unwilling or unable to complete the build? You get lots of heavy handed terms such as these in builder contracts. I really hope you are working with a good buyer's agent.
Contracts need to be taken very serious no matter if they are half a page or twelve pages. If you do not agree with a particular contractual term or you feel that adding some of your own language to the contract could be in your best interest, delete/add it. Of course the other party needs to agree by initialling the change but this is perfectly ok to do. If someone were uneasy about making any changes to a contract they themselves issued without discussing the terms, that should raise suspicion. Afterall, changes to the "official" contract are nothing more than simple negotiation.
Regarding your backyard objection, I'm sure you have a property plat and without having the projects concept committed to a plan by a civil engineer, it would not be surprising to find the front or rear yard to be larger/smaller than "discussed" as it is dependent on the home location. Obiously your land's shape/features haven't changed.
In the absence of any contractual protections for either of you in this matter, I encourage you to go back to your builder withreasonable expectations. If you find the builder unreasonable, then there are several things you can do and I'd be prepared to let them know face to face that you mean business . . .
There is a particular power in looking someone in the eye . . .