Non-refundable deposit on a new home that has not started construction?

Asked by soprano1965, Houston, TX Thu Sep 13, 2012

We put a contract on a home and for circumstances of my husband's job transfer, need to back out. All they have done is draw up the blueprints, no ground has been broken. It is not custom, but we did add a 3rd garage $5000 non-refundable deposit for. Is there any chance of us getting that back?

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Gail Levin, Agent, Houston, TX
Fri Sep 14, 2012
I too suggest that you sit down and talk to the builder and explain the situation. Should you encounter any difficulties, then I suggest you contact an attorney, as Realtors we are not allowed to give legal advice. Good luck I hope it works out for you, but feel free to contact me if you have any other questions.
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Randy Emery, Agent, Sugar Land, TX
Fri Sep 14, 2012
I have found almost all residential home builders are willing to work with you on the issue. Suggest you and your realtor sit down with the builder and discuss.
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Flag Fri Sep 14, 2012
D'Evereaux B…, Agent, Houston, TX
Thu Sep 13, 2012
Who is the builder? If you don't want to say publicly email me I speciallize in new construction and worked for Ryland Homes,

Most are understanding and most contracts read that if the upgrade improvements have not actually incurred and expense and been completed than it is refundable. Again I need to know Builder, if it is a mainstream production builder and they went outside of their norm to have new blueprints drawn up for this garage (most already have these as options and have be drawn), then it is fair to say that they incurred a cost.

I would try calling the sales manager above the sales rep. It would have helped to have had a Realtor represent you when signing the contract! Good luck to you. Are they holding your Earnest Money too or just upgrade deposit?
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It's J. Kyle Homes. Yes we did get blueprints and I'm willing to incur those costs, but nothing has been built. Just the upgrade deposit. Thanks!
Flag Thu Sep 13, 2012
Mark McNitt, Agent, Houston, TX
Thu Sep 13, 2012
Many builders will refund if they did not have expenses incurred on your future home. Just speak to them and give them proof of your husband's job transfer (you could have made the story up to get out of the deal). If they give you a hard time, offer to split 50/ other words, work with them.

Small claims court is a place where you could go, without an attorney, to try and work out any issues. However, a contract is a contract and their are typically terms that protect the builder so buyers don't walk away mid-construction.

You have options and we Realtors cannot give legal advise. Always a good idea to speak to a real estate attorney if things can't get worked out over a cup of coffee.

Mark McNitt
m 832-567-4357
Bernstein Realty, Inc.
0 votes
John Juarez, Agent, Fremont, CA
Thu Sep 13, 2012
The builder is going to argue that you have defaulted on the contract and the contract gives them the right to retain your deposit. What argument are you going to make that will overcome the language of the contract.

Is there a chance your husband’s employer will pay you back as a “relocation allowance”?
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