What should we do? Can we have back the deposit if we don't want the house?

Asked by Carinna.yeh, San Diego, CA Sat Feb 23, 2013

We have a contract with a builder to have a brand new home whick will come in a completion in a few weeks. But we found out a few days ago that there were some evidences that the wood/lumbers used underneath the bathtube in the master bedroom were chewed by some pests.

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Greg Hanner, Agent, Waterford, CT
Sat Feb 23, 2013
Hi Carinna,

I understand that you have a contract on a new construction home that will be completed in a few weeks. Being new construction, it would be very odd and rare to have old lumber incorporated into a new structure. The only wood/lumber under a tub is normally the floor joists and then the subfloor material. What you may be seeing is the bark edge of the joist which should not be a structural issue.

Have brought the issue to the attention of your builder? Your home will be going through a final Certificate of Occupancy inspection conducted by the local building inspector and you may want to request that the builder have the material in question approved at time of CO inspection. Additionally, your Purchase and Sale Agreement may have an inspection clause that provides you with the right to inspect the home prior to closing and there might be a remedy clause where you can put the builder on notice (in writing) about any problems you find and then they probably have the option to fix the problems OR refund your deposit and then they would be free to sell the property to others.

The question of if you can back out of the transaction is difficult to answer without being able to read your purchase agreement. You should ask your Buyer's Agent to explain your agreement terms to you. Better yet, your closing attorney would be the best person to give you legal advice if your relationship with your builder erodes.

I would encourage you to be open an honest with your concerns and you should give your builder the opportunity to remedy the problem if there is one. If they agree with you that there is a problem and then they fix it, you are buying a home from a builder who cares about his clients and his reputation. This is also a good sign that you should get good service from the builder in the future if you need warranty service after you move in.

Best of luck with your problem and I'm hopeful that you can resolve it and then enjoy new home ownership and all that it has to offer.

Greg Hanner, Broker, REALTOR, e-PRO
2 votes
Gabriel Rojas, Agent, San Francisco, CA
Sat Feb 23, 2013
Hello Carinna:

Sorry to hear about your recent dilemma.

Instead of asking for your deposit so soon, I would recommend re-reading your contract very carefully to find out what protection you may have built in to your terms. I find it surprising, but not impossible, that pests would have already damaged this new construction.

At the very least, you should consider hiring a real estate attorney and have them look over your contract. They can inform you of your rights and recommend how to move forward.

If you would like a referral on a real estate attorney I'm happy to supply you with one.

Good luck!

1 vote
Alina Aeby, Agent, San Francisco, CA
Sat Feb 23, 2013
There are very good advises and answers bellow.

Besides reading the contract and consulting an attorney, I would recommend that you ask a structural inspector for a professional opinion/report. Then, discuss the issue with the builder. Usually, according to the new construction contracts, the builders have the chance to fix any problems before close of escrow. The building will need final clearance from the Department of Building Inspection and from The DRE. Also, you will do a final walk-through with the builder, take notes and demand corrections to be made before closing.

I don't know how your contract was written, but I am sure there are some paragraphs in there that protect the builders and developers as well, giving them the chance to do repairs before you can walk away from the house..with your deposit....After all, builders have good attorneys too.

Good luck!


Alina Aeby-Broker Associate
Pacific Union International
1 vote
Eric Castong…, Agent, San Francisco, CA
Sat Feb 23, 2013
Hi Carinna

Did you have an inspector look at the area and tell you that it had pests in it? Or does the wood just look damaged?

As everyone has said, you should look at your contract, but you would also likely need to do two things: have a professional give you a written opinion, and give the builder a chance to fix it.

If you really want out of the contract, I would get a real estate attorney to look at your contract and guide you though the steps. If you like and want the house, but want the work corrected, you should work with the builder to get the repairs done. Amongst your pile of paper, there is likely some language about warranties and repairs; you should see if that exists as well. It is a lot more likely if it is a larger community you are buying into.

Best of luck to you.

Eric Castongia
1 vote
Irina Karan, Agent, Aventura, FL
Wed Oct 30, 2013
I suggest to review your contract for such situations.
It is also best to speak with your attorney.

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
0 votes
, ,
Wed Oct 30, 2013
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0 votes
, ,
Tue Apr 2, 2013
Well, I think that by California law you can withdraw your offer and get your money back after any new information.

However it sounds like you are overreacting. Have a licensed branch 2 termite inspector (all termite companies have them) inspect the wood.

If the wood is inferior, I would start inspecting the whole house to be sure t hey are not cutting corners on the quality of the building materials.

Most wood infecting insects bore into the wood, If it has bore holes from beatles, wood boring ants or wood borring bees I would say you can just ignore it. Most wood has some sort of this type of damage but unless you have an active infestation it should not be too much of a problem as long as the wood has not been too damaged.

The only two types of active infestations that would be a problem are the wood boring beatles or drywood termites. Most wood products have some wood boring beatle damage but it is not likely that the infestation is acitve. I seriousely doubt they would use wood with an active infestation of dry wood termites, unless the workmen are just ignorant.
0 votes
Daniel Rivera, Agent, Daly City, CA
Tue Feb 26, 2013
In your contact you have several contingencies purposely place in order to protect you from purchasing a problematic property. If you have in any way waived or signed off on your contingencies I would highly recommend getting a real estate lawyer involved. The property is a few weeks from being completed which means you need to act now.
0 votes
AP, , San Francisco, CA
Sun Feb 24, 2013
I would find out how much it really costs to fix the problem from a couple different people, and how common it is in the area.

With home prices rising fast it could cost you more to find a new home and also homes in 100% perfect condition is rare and very expensive
0 votes
David Tapper, Agent, Burlingame, CA
Sat Feb 23, 2013
It all depends on your contract. I would be very surprised if you didn't have a contingency written in the contract from your agent.

Talk with your realtor and find out what rights you have. If you went direct to the builder and or their agent, you may have to hire a real estate attorney. I'm more then happy to look at your contract to see if you have a way out.


0 votes
Cindy Davis, Agent, San Diego, CA
Sat Feb 23, 2013
Re-read your contract very carefully..you might even have a real estate attorney take a look at it to determine any options you might have. Best of luck.
0 votes
Steve Colvin, Agent, Laguna Niguel, CA
Sat Feb 23, 2013
Hi Carinna,

I would definitely bring up your concerns to the builder and read the purchase agreement regarding canceling the contract.

Good luck

Steve Colvin
Premier Ca Realty
0 votes
Shanna Rogers, Agent, Murrieta, CA
Sat Feb 23, 2013
Hi Carinna.yeh,

Read your purchase contract for contingencies. If you have contingencies that are still in effect (you haven't removed them in writing), you should be able to cancel contract based on the contingency and then you should get your deposit back.

Shanna Rogers
SR Realty
0 votes
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