How many meetings with custom home builder before signing contract?
lapearlz
8 years ago
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Legacy Homes NW
8 years agoworthy
8 years agolast modified: 8 years agoRelated Discussions
Builder's Agent pressing for contract before lot closing-LONG
Comments (17)I appreciate your responses---I'll try to fill you in on some clarifying information as concisely as possible without too many boring details and hopefully without confusing you too much further (But I'm not always so good at that, so please bear with me). The builder is one of the leading custom home-builders in our area. They build in their own subdivisions as well as on a buyer's own property, specializing in small acreages. My husband and I like their homes---one plan in particular---and became interested a few years ago in possibly having them build it for us on a small acreage---if we could find it (nice, affordable raw land to build on is getting more and more scarce in our area). For about the past year, their real estate agent has been helping us to look for the land. He has shown us about a dozen properties, including a couple of already existing homes on small acreages, as we try to determine a direction for our next home purchase in case that perfect piece of raw land just wasn't out there for us. Well, the "perfect piece of property" did actually come available a few weeks ago and he assisted us in writing the offer and in representing us as the buyers' agent in making the land purchase. Our offer was accepted this time---contingent on the buildability of the property. The builder did do the building feasibility study on the land on our behalf. So far, we have not signed a contract with them to build the home, though we have been discussing pricing of their plan on our lot---but we have not come to even a verbal agreement about that. To be fair to them, they have invested considerable time and effort and, as I write this, I can see why they are pressing for a signed commitment from us at this point----we've made no guarantee that we'll work with them, especially if we aren't in alignment on the purchase price and other details. I spoke with the agent by phone today, and he was fairly cheerful about the fact that we won't be signing a contract for the building before we sign at the title company tomorrow. We do realize that at this point there's no reason for them to be competitive in their offer, without anyone to compete against!! Since the bid is on one of their own plans, I'm pretty sure we would not be able to acquire a set of plans in order to get other competitive bids. It feels like we've put some carts before the horses and have painted ourselves into a bit of a corner. It's too late to get an attorney to assist us at closing tomorrow---which is now 7 hours away and will already have been signed by the time most of you are reading this. I'm not entirely sure how to proceed at this point.......See MoreDue Dilligence - Questions to ask BEFORE you sign a contract
Comments (19)saftgeek - I hate to admit it but you are all too correct about far too many attorneys! I was a high school teacher for 20 years before deciding to go to law school and I have been deeply appalled by the how truly unethical and dishonest some lawyers are. In the six years I've been practicing law, I've run into more dishonest, downright sleezy lawyers than I met incompetant teachers in twenty years of teaching school... and people are always knocking teachers for being incompetant! Shyster lawyers make me ashamed of this profession just as incompetant teachers sometimes made me ashamed of the teaching profession. I would urge you or anyone else who has evidence of a lawyer behaving dishonestly or unethically to report them to their state bar association. It might not do any good but then again, it just might. At least in Texas, I think our state bar tries to disbar the unethical lawyers whenever they can find them. It certainly sounds like your ex-boss was exactly that type. I also truly am not trying to paint GCs as dishonest. I believe the vast majority are honest folks who do their best to do a good job when building a home and, if they make mistakes, try their best to fix them. BUT, as in all professions, there are some people building homes that are either lazy, dishonest, or so downright disorganized that the homeowner who ends up hiring one of them needs to be able to go to court and get help. And, unfortunately, the contract promulgated by the Texas Association of Builders is specifically designed to protect these bottom-feeding GCs from facing the music for their bad behaviour. The funny thing is, I KNOW that it was the TAB's lawyers who drafted the d--n contract that protects the bad builders, so when I'm knocking the contract, I'm also slamming some of the members of my own profession! I actually suspect that most builders who use the TAB form contract do so because it is available to them cheaply and they don't know any more about what it really says than the homeowner does. And, so long as there are no major problems with the build - nobody is any the worse off. But, I defy any honest person who has ever READ the TAB contract to argue with a straight face that it is a fair and balanced contract. Among other things, it requires the homeowner to waive the "implied warranty of habitability". Basically an implied warranty of habitablity means that courts have said when two parties enter into a contract for one to build a home for the other, there is an implied understanding between them that the finished home will be inhabitable. The owner doesn't have to make sure to insist that language be put into the contract SAYING that the house must be able to be lived in when comleted...the courts will assume that since the contract was for the building of a home, the finished product must be something one can inhabit or it is simply not a "home." But, just in case someone WANTS just a shell - or something like that - to be built, courts will allow the parties to agree to waive the "implied warranty of habitability". Asking the homeowner to waive the implied warranty of habitablity might be fair if the homeowner wanted to build something totally new and different and the builder said, "you know, I can build that for you but I don't think it'll be something you can live in when I get done, are you SURE that's what you want?" But, I think you would have to agree that, except in those rare instances, a house should be inhabitable, just like a car should be driveable, a suit should be wearable, and a wedding cake should be edible. Would you agree to buy a new car from a manufacturer who insisted that you agree to waive the "implied warranty of driveability"? Would you purchase a suit from a tailor who refused to warrant that it would be wearable? Would you order a wedding cake from a baker who refused to guarantee that it would be edible? Why would you buy a home from someone who refused to warrant that it would be habitable????? Nevertheless, the Texas Association of Builders - with the help of its attorneys no doubt! - realized that implied warranties can be waived and that most homeowners don't ever really read or understand the contract they sign. So they put language into the form contract that waives the warranty of habitablility on every single home built under it. That means the homeowner may think he is contracting for a turn-key home but, even if the house he gets is so defective that he cannot possibly live in it - say the sewage pipe has broken in the wall so that there that raw sewage has contaminated all the insulation - the homeowner cannot argue that the builder breached the contract by building an UNIHABITABLE house. Fair????? The TAB contract also requires that the owner agree upfront to "binding arbitration" in the event of a dispute. This doesn't sound too bad...unless you happen to know a couple of facts about binding arbitration. First, arbitration is MUCH MORE EXPENSIVE than small claims court even though most building disputes are going to be over amounts small enough have brought the claim in small claims court. Second, arbitrators are selected and PAID by the parties to the dispute which means that arbitrators make more money if they are selected for more cases. If an arbitrator wants future work, they have to make sure that the party that is more likely to bring them future business is happy. Care to guess which party is more likely to NEED to hire an arbitrator for a second or third or fourth construction dispute? Some studies have shown that homeowners win less than 5% of claims that go to arbitration but win about half of claims that are tried in a court of law. Even those few homeowners who are nominal winners in arbitration almost never win enough money to actually repair their homes! The TAB contract also requires that the builder receive his final payment, in full, (i.e. NO RETAINAGE) at the time of the final walk-through even though it also specifies that a punch list of items to be corrected/completed/repaired will be made at this same time. In theory the builder is supposed to return and finish the punch list. But, WHY should the unscrupulous builder bother? After all, he has already been paid in full AND the homeowner can't even sue him in small claims court due to the binding arbitration clause I already mentioned? Do you think that is fair? I could go on and on about other clauses that are in the TAB contract but I suspect I've made my point. A builder who insists on using the TAB contract after having some of its many unfair clauses pointed out to him may not actually BE dishonest but, IMHO, neither is he the kind of straight shooter I really want to deal with. Straight shooters are willing to play on a level playing field....See MoreSigned Builder's Contract, Now To Make Experience Enjoyable?
Comments (4)Let's see... 1) Only read the happy posts here if you want it to be fun. Otherwise you'll have your mood dampened. And you'll start worrying about things that might never come to pass with your build. 2) Go live far, far away from the building site, where you cannot be contacted. Leave your cell phone at home. Give a Power of Attorney to someone who will have the authority to make all decisions, execute all documents on your behalf. 3) Plan fun, busy, yet relaxing things to do while you're away. Like on the extreme makeover shows where they send the family away to have fun while they build their house. They'll bring you back when it's time to move in! That's about it. Since you will NOT do those things, or cannot do those things, here are my alternative suggestions: 1A) Decide how much of your time and life's energy you are willing to devote to the build. As you go along you'll learn how to adjust those personal resources to adequately meet the demands of your tasks. Heed the word 'adequately'. Aim to do the least possible; lower your standards; keep everything simple; decide that some things can be done badly. How shocking! 2A) Clear your and your family's schedules for the duration of the build--not just the builder's projected timetable. Because during the build you will have lots of "little emergencies" and "we need a decision by tomorrows" to contend with. If little Johnny has taken up martial arts in addition to another after-school activity, the whole family will suffer. Everyone must scale back their schedule. Everyone must have unscheduled time that is available for the demands of the build. They will feel put-upon, and act martyred and you will feel guilty. But the family will fare better for it. Plan some fun, easily taken up and put-down family activities to fill any unscheduled hours that remain unclaimed by the build. (You will not do this either, because it seems either unnecessary or too burdensome on the poor children; you--and they-- will live to regret that decision.) 3A) Whichever adult has the most flexible schedule, and/or is thought to be the design whiz, will become the most stressed out one. She should, in advance, write into her schedule, inviolable times for favorite stress-reducing activities every: day (20 mins. 3 x daily); week (1 hour away from it all at least 3 x weekly); a monthly 3-day mini-vacation if she borrows a friend's basement to retreat to and sits by the window sipping tea. You will not do this either, since it seems entirely too greedy and you simply can't get away like this. The entire family will suffer as a result and come to resent you for getting snippy, full of sighs, catching more colds, whatever form of nastiness attacks you when you are overly stressed. 4A) Cultivate your sense of humor. Collect cartoons and funny sayings. Develop a mantra. These things will serve you well. Because while the process might not be FUN, it can at least be FUNNY! Others will fill in here with far cheerier advice than mine. I'm of the school that says, plan for the worst and then you'll be pleasantly surprised....See MoreRead this before signing a contract
Comments (15)I am proceeding with complaints and will probably end up in small claims court. As for slander, I feel free to state my opinion, based on facts. I'd like to see them argue differently. For it to be slander, it would have to be knowingly untrue (or for it to be reasonable to know it was untrue). The atty was actually great and gave me tips and a list of what I will need in order to sue them in small claims. He knew pretty quickly that he was not going to be hired because the math did not work out. I asked what he would charge to advise us further, and that would be $1,700 minimum, so not really financially feasible based on what we hope to recover and what we are able to lay out. We are refinancing now to roll both loans into one lower rate, so cash is beyond tight. The darn appraisal came in $50k lower than last Aug, before the work was done! The previous appraisal was high (and we knew it), but this is low. The problem is our house is special now and not like the most recent sales nearby, so it is hard to comp on paper. It is so frustrating.... That means we had to cough up another $17k more than expected. All the banks care about it these days is loan to value. What stinks is we'd be qualified to buy our house in every other way, but the low appraisal is what hurts. If we were buying, we could put down less than 20% but they don't allow one to refi at less than 20% down. Our payment will drop by $550 a month, but that is logic and banks don't operate on logic, lol. So, we have to squeak by and hope that we can close. Once we are closed, we will get money back from the current mtg holders, it is just getting to that point. Dh is a teacher so no pay in the summer and I have a few deals closing in the next few months, just not yet... sigh.... I will make sure to do things in an organized manner. I am taking it slow and steady and will keep at it. I am resigned to not having a finished house for quite some time. I have been trying to make it look less disrupted. Some things will need re-doing and that means packing up some areas again, but I was tired of us not using our house properly and being crowded out of some rooms and looking at fallow construction materials collecting dust. We don't have the cash to do anything yet, so I am focused on things like organizing and unpacking into the kitchen more. If it involves laying out cash, it will have to wait. It is like triage now.......See MoreSandy
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