When buying a home from a builder do you still have the three day attorney review period to back out?

Asked by Partyof4, 60502 Sat Jan 31, 2009

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Joe Sorrenti…, , Buffalo, NY
Sun Feb 1, 2009
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If you are from the Buffalo area, you should know that I am a local, licensed associate real estate broker with many years of experience in new construction. Buying a new build direct from a builder is a lot different than buying an existing home. Not all builders cooperate with agents/brokers and not all agents/brokers have a lot of experience with new home construction purchases. In the Buffalo, NY area, you will need an attorney to close on your behalf but you really should not try to pinch pennies when selecting an attorney, you should find one who has significant experience with dealing with builders and closing on new construction. You should also find someone who has experience in the particular geographic area that you are going to move into. Having knowledge about a particular city or municipality for a closing attorney is extremely important, especially where there may be issues with of sinking soil or being in a flood plain. Dealing with builders in this particular economic time can be risky if that builder is experiencing some financial issues. Don’t always assume that because they are doing a lot of business they don’t have problems. I would be more than happy to discuss in detail more particulars but here are MY recommendations for the basics:

Select an area, town or subdivision you want to be in, if you want to use an agent, interview about 4 having a history of about 2 transactions per year as buyer agent with new build purchases. Go to a solid bank with a local office that offers construction loans (if needed) and has longer lock-in rates (First Niagara, HSBC for example). Find an experienced real estate attorney (the bank person should be able to help you with some recommendations), once you have decided on one or two builders, have your attorney run a judgment search to see if there are any issues from other people who have had bad experiences or problems with the builder, especially warrantee claims. Next, find a builder. Buying a spec home (one the builder has already started building upon speculation for a buyer) is a lot different than buying a custom home. Do they own their own land or only build on your land? If you find your own lot, will they build on it and how much extra for off-site construction? Are you compelled to build only on their lots/sub-division? Does the builder have their own money or are you going to be required to go and get a construction draw loan and then have to get an end loan upon completion? Find out how much deposit is required until closing and who will be holding that (the builder, the attorney or the broker if involved) and if it is non-refundable. If there is a real estate agent/broker involved, who pays their fee (you or the builder)? If you know of other homes that the builder has built, go knock on some doors and ask if there are satisfied. People who have problems with their builder will LOVE to tell you. Most reputable builders have their own contract so, once you have decided on a plan, a location and all of what you THINK will be included, have the contract drawn up including a list of materials. All of the features, extras etc. should be written down along with the cost associated with those extras (itemized) if they are not included with the base price of the house. Please make sure that if you think the total cost includes the lot, make sure it says so on the contract. Also, make sure that other things that most people assume come with a house are included in writing (driveway, landscaping, air conditioning (what size unit?), exterior water valves etc). After you receive the full contract and you read it over carefully, take it to your attorney to review BEFORE you sign it. Again, these are my suggestions, not requirements when buying a new build. For any other questions you may have I can be contacted by e-mail at: joe@joesorrentino.com.
Web Reference:  http://joesorrentino.com
0 votes
The Maxian C…, Agent, Williamsville, NY
Thu May 22, 2014
Great question - it all depends on what the contract says. It should state right in the new build contract whether you have an attorney approval contingency, home inspection contingency, etc. Consider using a real estate agent with experience negotiating new builds (like us!). It won't cost you anything, and you'll have someone with experience in this area looking out for you.

Thanks,

Jennifer Maxian
Jennifer.maxian@ huntrealestate.com
(716)946-6112
0 votes
Dallas Texas, Agent, Dallas, TN
Sat Jan 31, 2009
Review terms and conditions including "out clause" prior sign an contract. NOTE: we dont recommend for any buyer purchase direct from builder / seller / listing agent unless you have a realtor or attorney represent you.

Realtor is paid via seller HOWEVER attorney is paid direct by you.
Web Reference:  http://www.lynn911.com
0 votes
Penny O'Brien, Agent, Las Vegas, NV
Sat Jan 31, 2009
ask the builder what their policy is... It's hard to get out of contract with builders once you've signed on with them.. Take a realtor with you because the builder is there to represent themselves not you... You need to have someone who can represent you... The agent with the builder is representing the builder... Hope this is of help to you..
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