Home Buying in Arlington>Question Details

Sll2543, Home Buyer in Arlington, VA

How long does it take to get a ratified contract for a New Construction home purchase?

Asked by Sll2543, Arlington, VA Sun Dec 5, 2010

We signed a purchase contract for a new construction house and still have not received the ratified contract and it has been 2 weeks. Is there a time period that we should have got this back? Is this because they are covering something up or there is a problem? They keep telling us its fine and we will have it soon. I think its in our interest to find a real estate attorney to look over all our paperwork and guide us through the process.

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You should NEVER EVER buy a home without a Buyer Agent representing you. Period. Whether it's new or resale. A Buyer Agent is the one who can help you review the purchase offer with the builder, help negotiate best deals, and make sure that you are protected and that dates and deliverables are "tracked" and accounted for according to law, contract terms, and addendums. Normally the builder/developers sign new construction offers and deal with counter offers immediately so as to get the contract ratified. Until you have a signed copy by the seller then you don't have a contract. It's a unilateral offer to purchase. I'm not an attorney and neither are the other agents here, but we all have good knowledge. You don't get any better deals if you skip using your own agent and normally you get better deals. You can tell them that if you don't receive it by X date/time that you are withdrawing your offer. Then do some research, get yourself a good agent, and go back and make the offer again. Hopefully, you researched the project and ran the comps on it to make sure that you aren't paying too much for a property that might already be less than sale price on the resale market - which is oftentimes the case with new construction.

No what you are getting into with new construction. Do some quality control yourself. Don't let them tell you something is "normal" when you sense that it isn't. If your gut tells you something doesn't seem right, then it probably isn't. Remember, most of them will skip having a home inspection. You should ALWAYS do a home inspection with a professional home inspector. I cannot tell you how many people have bought new places only to find electrical, plumbing and other issues. Construction is only as good as the laborers used to do the job - the builder isn't the one at your house 8 hours a day watching it being built. Yes, they have a QC person, but he/she isn't there very often either. Esp. if you are building a spec home. Trust me, I've been through it personally. If it has a basement do Radon. Check for mold if you live in a climate where there's moisture during the construction period. I know about one new house, very good builder, which turned out to have black mold in the walls, which didn't show up for several months. Of course the builder was liable, but that didn't help with the severe inconvenience that they buyers suffered during the remediation period. The buyers eventually had to file a lawsuit and the builder bought the house back from them....Get yourself a good Buyer Agent that can help you through the new home purchase process. Remember, the sales people and others represent the Builder's best interest, not yours. And get your own settlement company and lender that way you can control the process and the closing activities.
1 vote Thank Flag Link Mon Dec 6, 2010

Home buyer sometime the actual seller is out of state on these builders, so it may take some time to receive a ratified contract back to you. I am assuming you met with the sales agent for the builder, and they should have provide you some times line for the purchasing process, selection of materials (if applicable), inspections, etc.

if you feel something is out of sorts I would talk to the person you have been dealing with an express this to them. if you walk unsatisfied you can always seek legal advice.
0 votes Thank Flag Link Tue Feb 15, 2011
Its not out of the ordinary for a medium sized home builder to deliver a ratified contract back to you in a period of 2-3 weeks. Its usually just a logistical issue, not an agenda to dupe you, etc.
You would be well served to employ a real estate agent even when purchasing NEW. NEW Homes are NOT purely "retail" transactions, and real estate agents can often help you negotiate the price significantly. Further, Agents are able to help you through the contract process such as what you are going through now, and apply the pressure needed to get the responses.
All said, if the builders rep has accepted your contract and earnest money, you should rest assured that you have tied the property up.
And by the way, even though you are buying NEW, get a home inspection!
0 votes Thank Flag Link Wed Dec 8, 2010
New Home Buyer,
Many buyers think that if they do not use an agent that they will get that amount of their commission in a discount toward their home purchase. This is not the case. Also, without a buyer agent advising and guiding you though the home purchase and what to expect, you are on your own. You could have been represented, advised and have someone else deal with getting the answers to your questions.

Your next step would be to read through the contract thoroughly and retain a Real Estate Attorney to get you through the process and their time is not free.

I have a contact in the Arlington area. Feel free to contact me should you desire further information.
Jeanne Little (703) 973-7742
0 votes Thank Flag Link Sun Dec 5, 2010
If this is a condo or townhouse with a large number of units to sell, it could take longer as the principals may be out of the area or have a number of contracts to deal with. If it is a single family home, particularly in Arlington or a close-in area, most of the homebuilders build only a few houses at a time, so they are more likely to be local and accessible. If you are not being represented by a buyer's agent, you should definitely have a good real estate lawyer look at the contract and the entire process of purchasing a new home. The builder's contract is very much in favor of the builder as you may have already noted. One thing to understand in particular is that most new properties are sold with a special warranty deed rather than a general warranty deed. There will also be a one year statutory warranty for the property as well as any other warranties offered by the builder and the typical warranties for items in the property such as appliances. You can review the Virginia Statutory Warranty on-line. Many builders will give you concessions, such as closing costs or upgrades, if you use their lender and their title company. Be sure you understand the implications of using someone likely related to the builder as the builder will receive a fee for referring those companies to you. Under the Virginia Consumer Real Estate Settlement Procedures Act, you have the right to select your own settlement agent. The settlement agent is important as they are doing the title search on your behalf and making sure that all liens are paid off at settlement. They can also advise you on mechanics liens and the type of title insurance you need. Again, liens by mechanics, i.e., people who have worked on the property such as electricians, plumbers and roofers, can be filed against the property after settlement. There is a great deal more to understand in the process, so your money will be well spent with a good lawyer who will represent your interests and educate you.
0 votes Thank Flag Link Sun Dec 5, 2010
Dear Home buyer: Yes, most likely there is some sort of issue. Have they verbally accepted your offer? In Virginia, a verbal agreement is not enforceable so from a legal standpoint you don't have a contract that you can enforce. Generally, as soon as all terms are agreed to the contract is ratified. If the sellers is ok with your terms then it certainly is in their interest to ratify and lock you into the contract. It is possible they are hoping for another (better) offer, or it could just be inefficiency on their part (something you really don't won't to see from someone building your home). Either way, if you have not used realtor representation I would suggest having a discussion with a real estate attorney and decide how long you will wait before rescinding your offer.
0 votes Thank Flag Link Sun Dec 5, 2010
The builder has a buyer who wants one of their houses but can't deliver an executed contact after two weeks? Is this any indication of the ability of the builder to deliver? Check this builder out thoroughly if it is not a well known major builder. Do what you can to avoid being involved with a bankrupt builder to whom you have paid a bunch of money and who is unable to deliver your house.
0 votes Thank Flag Link Sun Dec 5, 2010
You should have had a ratified contract back by now. The delay could just be circumstantial, but if you're really concerned, give them a drop dead date. If they don't ratify your offer by a certain date, you're going to withdraw your offer.

Good luck,
0 votes Thank Flag Link Sun Dec 5, 2010
It's too bad you didn't use an agent. A real estate agent wouldn't have cost you a penny.
If you're dealing with a small company it could depend on the availability of the principals of the company to sign the contract.
0 votes Thank Flag Link Sun Dec 5, 2010
If you don't have an agent, it is in your best interest to consult with an attorney who specializes in real estate--have all documentation reviewed and go from there.
0 votes Thank Flag Link Sun Dec 5, 2010
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