Home Buying in 52722>Question Details

Buyingblues, Home Buyer in 52722

We are buying a house that is still under construction. It is a unique circumstance and have had the

Asked by Buyingblues, 52722 Sat Jul 25, 2009

opportunity to upgrade appliances, tiling, and paint colors before actually purchasing. In the contract, there is a clause that states we, the buyers, will pay the difference in cost of those items at closing. My question is this, if settlement does not occur for whatever reason, given that the clause regarding payment in our contract, do we need to give the difference in money to the seller anyway? Our agent seems to think yes and I feel that clause is in there to protect us if we don't actually get the house. Also, we agreed to a settlement date and based locking in our interest rates, etc around that date. Now, the seller will not have the house done by the signed on date, causing our locked in rates to expire and penalties to occur. Legally, do we have any right to hold the seller to the signed on date and demand they pay the penalties? Our agent doesn't seem to have much comment and he is supposed to be representing us!

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John Beltramea’s answer
Dear Buyingblues,
Your agent should be fighting for your best interest! If he's not, consult with his broker, and if neither helps contact an attorney. If you were to pay the difference at closing and the closing doesn't take place without you agreeing to an extension you may have options. The dates on the contract may indicate the contract is invalid if closing hasn't taken place...Good Luck!
John Beltramea
Broker/Owner
Elite GMAC Real Estate
Cedar Rapids
319-329-JOHN(5646)
Iowa Licensed Real Estate Broker
Serving Eastern Iowa with Premier Service
0 votes Thank Flag Link Tue Jul 28, 2009
I personally do not like the QCARA Board contract for new construction. I never use it. I have been building homes in the area for 25 years and a Broker Associate for 31 years. My opinion is the it is not a good contract.

There should be a paragraph the talks about closing date and penilties for both parties if either is late.

The rate lock in should have been for a worse case situation.

Everybody goes in with great intentions, changes, weather and supplies not having items cause delays. This happens almost every time.

Now the next thing is the actual closing date requires that there be A certificate of Occupany by the city where the home is being built. you should not close without this and can not move into the house with out it.

Have your attorney review the contract to see if there is a penalty clause, if there is you should be able to work something out.
0 votes Thank Flag Link Sun Jul 26, 2009
Read the entire contract to learn if there is a clause allowing the contractor / seller any flexibility in the closing date. Is there any contract language that provide penalties to the seller if they do not close on time?

The clause that says you have to pay for the upgrades at closing most likely does not mean that the seller will be liable for a delayed closing or that you are relieved from paying from the upgrades. You are probably using a contract written by the developer's attorney, so you can be sure that most of the contract language is there to protect the rights of the contractor/developer rather than you as the buyer. It may or may not have been possible to add or modify any of the language in the Purchase Contract.

Your Realtor is probably not also an attorney. However, an attorney who can actually read the entire contract will be able to advise you for sure. Good luck.
0 votes Thank Flag Link Sat Jul 25, 2009
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