So you’ve toured the builder’s flawless and fully-furnished model home and you’re in love. Buying a newly-constructed home is an exciting and optimistic time, but before rushing headlong into an agreement you may regret, there are a few things you should know before signing on the dotted line.
Nashville real estate attorney, John Rochford notes, “I often get calls from people who are in the process of buying a new home and who have some reservations about the contract their builder has presented to them. Needless to say, their instincts are often correct and the contract is totally one-sided. I help buyers examine their contract and negotiate the best terms for their new home.”
If you make the decision to contract directly with a new home builder, hiring a real estate attorney will ensure that the terms of your contract favor you and your family, not the developer. Don’t be afraid to negotiate! Your home is on the line.
Getting What You’ve Been Promised
At a fundamental level, working with a real estate lawyer will help guarantee that you get the house that your builder has promised you and that the builder will be paid for his work. Typically, your contractor will present a standard contract for your approval. If the contract appears overly simple or unnecessarily complex, there’s an excellent chance that the contract does not serve your best interests. To protect your rights and to help ensure the smooth construction of your dream home, all contract terms should be reviewed by your attorney and should be clearly understood by all involved parties.
Getting the Most out of Your Home Warranty
The Tennessee Residential Property Condition Disclosure Act requires homeowners to complete a lengthy questionnaire identifying all the defects that a house may have; however, new home builders who offer a written home warranty in conjunction with the contract are exempt. And, for this reason, nearly every new home builder offers home warranties to their clients.
“However, the warranty is often one-sided and describes more about what is not covered than what is covered,” observes Rochford. “I help my clients get the most out of a new home warranty.”
Enjoying Peace of Mind
As a new home buyer, you can rest a little easier, knowing that a legal professional is looking out for your best interests. According to Nolo.com, some of the most common reasons for construction contract disputes are:
Scope of Work
Make sure you and your contractor agree on the work that needs to be performed. From obtaining permits to furnishing labor, equipment, materials, and other services, the scope of work is one of the most important parts of your construction contract. The scope should also include drawings, specifications and information about how conflicts between drawings and specifications will be resolved. Finally, provisions for additions, deletions, or other changes to the scope should also be included.
Project Schedule
Your contract should include construction start dates and move-in dates as well as provisions for extensions such as inclement weather, strikes, payment delays, inspection delays, or other issues that are not reasonably under the control of your builder.
Payment Schedule
So that there are no nasty surprises, your contract should clearly outline how, how much, and when you will need to pay the builder. “A typical contract will require an initial payment prior to construction. Then, on a regular basis thereafter, the contractor will submit an application for payment to the owner indicating the amount of work completed during that cycle” (Nolo.com)
Dispute Resolution
While one hopes relations with your builder won’t descend to the level of dispute resolution, it’s important to understand what the terms are (and who’s paying), should disagreements arise.
To protect your best interests and to get the most out of your new home contract, contact John Rochford today.
