Hi Kwadwo,

Not knowing any more than you what you have said here, I would say you have at least two options to protect yourself. One is to pay to lock-in your 5% rate with the lender and the other is to change the agreement's mortgage contingency cap rate BEFORE you sign it. Doing both may be the best answer, but without more information, it is hard to say.

One final point: If you are not willing or able to use a Realtor's services for this purchase, then you should definitely have an attorney look over the agreement before you sign it. Protect yourself!

Good luck,

Susan Meyers
Weichert Realtors
215-646-1700 x121
215-692-3518

Dear Kwadwo, my colleagues have said it all!:) You truly need to talk to a Realtor.....interview 2-3 and choose the person who you "c lick " with....and who you trust.....and who you believe has the knowledge and experience to protect YOUR interests.

By the way, in case you don't know, hiring a Realtor to represent you doesn't cost you a dime. It's the seller (or builder) who pays YOUR Realtor's commission. So there's really no reason not to have a Realtor to represent you in this homebuying process. (If you don't yet have a Realtor, I'd appreciate the opportunity to earn your business. To learn more about me, you can visit my website at http://www.JudysFineHomes.com.)

One other thought: please know that Realtors are specifically trained not only to deal with contracts, but also to negotiate for you. I can tell you that in this Buyers' Market, new construction/builders are indeed willing to make concessions and give incentives in order to sell their properties. Having a Realtor on your side who knows your local market can mean the difference between a positive homebuying experience....and one that leaves you frustrated, confused and, perhaps, feeling as if you've paid too much and/or failed to get a good "deal".

I offer FREE Special Reports for Buyers on my website at http://www.JudysFineHomes.com/meet/reports.htm. I encourage you to visit my site and request one or more of them.

Also, you can search the MLS -- for FREE -- at http://www.CollegevilleAreaHomes.com. It's very easy to navigate the site....and you can save your searches, etc. Check it out!

I wish you the very best of luck in your homebuying endeavor. Please call me at (610) 324-5240 if you have any further questions. It would be my sincere pleasure to assist you in any way that I can.

Warmly,
Judy

Judy May, Esquire, REALTOR
Your DIAMOND Realtor http://www.JudysFineHomes.com http://www.CollegevilleAreaHomes.com
judy@JudysFineHomes.com
O: 610.489.7700
C: 610.324.5240 (preferred)

Search the MLS! http://www.CollegevilleAreaHomes.com

Kwadwo,

This is a reminder of the importance of having a real estate professional in your corner when dealing with purchasing new construction from a builder. You are absolutely right questioning this clause. Interest rate caps, contract wording, in house financing, company selected appraisers, large deposits, etc. can be attempts to "lock in" the buyer and prevent them from walking away.

How do you deal with it?.......................Walk away and seek the terms that support you, not the builder!

Good luck
The Eckler Team

Kwado,

I answered your other question and it appears to me that you are very confused about the buying process as well as terms and their meaning and my question to you is where is your buyer agent?

My professional advice would be to stop what you are doing and hire a buyer agent who can work for you and explain everything to you. If you are working directly with the builder, that is your first mistake. They do not care about you at all.

No matter how any Realtor explains things to you here, you need to hire someone to protect you whether it be an attorney or a buyer agent.

Renee Porsia
Associate Broker
RE/MAX ACTION REALTY
(215) 669-0589 Direct
(215) 358-1100 Office Ask for Renee
http://www.reneeporsia.com