Home Buying in 77077>Question Details

Sudhir, Home Buyer in 77077

Cancellation of a new home contract

Asked by Sudhir, 77077 Fri Oct 1, 2010

We signed a new home contract with Meritage and opted for a covered Patio as an upgrade. In the pre drywall meeting we realized that bcoz of the covered patio we would loose one of the arched windows in the living room. It looks so weird out of 3 windows 2 are arched and one is a rectangular.

1. Builder did not make us aware of this issue with a covered patio
2. They insist that it's per their plan, but we have not signed their plan...

Before cancelling the contract, I want to understand how to get back our earnest money, which is 2000 dollars...

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Stephanie Clancy’s answer
Not sure if already have a Realtor in the mix representing you, but if not, you may want to run your contract by one or if you have an attorney who can quickly review the terms of the agreement for you to give you the high points of the deal that would be a good idea. Knowing your contract and what you can/cannot do is going to be essential for you in this deal - especially now that you're thinking of pulling out. A real estate broker or attorney can tell you whether or not you can get your $2000 back based on the language of the agreement. Have them take a look at the clause titled "Termination" if there is one...
1 vote Thank Flag Link Fri Oct 1, 2010
It's more important what the wording of the contract states then the reason. Read the contract for the terms of cancellation and returning of your escrow money. Realtors can not give legal advice.

Having said that, most home builders want to work with you as a client and will gladly return your ernest money as it's not worth fighting someone over two thousand dollars and getting a bad reputation. Your problem may be resolved as simply as asking the salesperson to terminate the contract and return the ernest money.

In your future purchase, I would recommend having someone represent you. It's always a good idea to have a Realtor represent your best interest.

Feel free to contact me for your future needs.
1 vote Thank Flag Link Fri Oct 1, 2010
This is an old discussion but is applicable even today.

It looks like you don't have an agent representing you. So I suggest that you read all the documents that you have signed with the builder and go from there. You may want to hire an attorney to assist you. Most likely, though, is that you'll lose your earnest money.

For the future, I would suggest that you have an agent representing you. Your agent is there to look after you and not the builder. The cost of having an agent is free and any reputable builder is not going to give you a price break because you don't have an agent.

I hope that makes sense!
0 votes Thank Flag Link Tue Nov 17, 2015
Any new builder will most likely start with a 'we can't make any changes' response. They are not custom home builders so everyone must realize they don't do special request during construction. The plans they are using to build the patio version is already approved with the county and I doubt they can be changed. Luckily its only a $2000 deposit so if you feel you can't live it I'd cut your loses and move on. Can you transfer the deposit to another home by Meritage? Is the window issue more important to you than shade in your backyard? You most likely will forget the window is there after you have moved in and you are enjoying a beverage under your awesome covered patio.
0 votes Thank Flag Link Mon Nov 16, 2015
I'd say the answer to your question depends on the language of the contract you signed. Often the builder's contracts are different than the standard purchase agreement used by a Realtor. I'd contact a real estate attorney. First though, I think I'd try to see if the builder can work with you to resolve the issue with the window. Perhaps you can resolve it that way. Good luck!
0 votes Thank Flag Link Wed Mar 20, 2013
Meritage is good at responding to customer requests but this seems more a miscommunication between the sales consultant and you by them not disclosing what the change would fully entail. I would request a meeting with the area manager first. There are always things they can do like change windows, build you another home, etc..
Web Reference: http://www.ourfirstnest.com
0 votes Thank Flag Link Wed Oct 6, 2010
Sudhir, I'm curious to find out, if and how, this was resolved. Had a situation once too, but it turned out favorably for the buyers. Each transaction is unique. Hope this one is in your favor too.
0 votes Thank Flag Link Sat Oct 2, 2010
Builders typically have their own contracts so most agents are not familiar with them. Besides, commenting on a contract and whether or not you get your money back is a legal matter. You can call the Legal Hotline with the Houston Bar Association and probably get an answer OR contact Richard Alderman's website (The People's Lawyer w/ UH) and submit the question via the internet. (They'd probably have to read the contract too.) It may be a standard Homebuilder's Association Contract.

Read your contract completely. Then, if you still think you have a chance, you can fax the attorney a copy of the contract so they can advise you on that particular situation. Although agents don't take the place of an attorney, they can often help when negotiating with Sellers (and Builders). It sounds like you need an agent to help you. Was the covered Patio shown as an upgrade on your sales price? Or, did they roll it into the sales price from already existing plans with a model # (without the covered patio). Have you tried going back to Meritage to see if they can correct it? (Like wall over the window?) They may work with you to make you happy if you can't get your earnest money back. They probably want you to buy the house and not walk away.
Web Reference: http://hba.org/
0 votes Thank Flag Link Fri Oct 1, 2010
As many have pointed out, the answer to your question depends on the language of the contract you signed. Builder contracts use different langage than the standard Texas contract.

If the language in your contract is not clear to you, then you should seek the advice of an attornery. You may be able to get an opinion from the Title company that is holding the earnest money. The title company is either owned by an attorney or has one on staff.

Good luck!
0 votes Thank Flag Link Fri Oct 1, 2010
We do have an in house attorney that you can discuss this with. If you would like his number please let me know. The consultation is free.
0 votes Thank Flag Link Fri Oct 1, 2010
Hello, this is the way it works, the only way that you loose your earnest money is if you already been approved, and I am not saying pre-approve by the lender and the builder know it, and you want to break the contract for some other different reason.
Any money that you give to the builder for upgrades it will not be return.
Pretty much that is the way it works, but you may want to double check on your contract or ask you buyer agent to help you with this situation.
0 votes Thank Flag Link Fri Oct 1, 2010
Your buyers agent is the person who will review the terms and conditions for the executed sales contract you signed provide you the professional guidance required to cancel the contract return of the earnest money.

IF you don't have a Realtor who represented you WHY no matter what always use an agent who we are trained with continual education on contract(s) , contract law. RECOMMEND to confer with an attorney review the entire contract.

UNLESS the entire contract is reviewed NO professional can render an opinion.

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Fri Oct 1, 2010
I need help with this too! Thanks. BTW, if anyone needs to fill out a TREC 23-12, I found a blank form here.
Flag Wed May 6, 2015
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