 Home Buyers
Tips Archive
The Paper Trail
Protecting Your Rights With A Good
Contract
When you sign a contract, you might as well consider that
pen in your hand to be a stick of dynamite. Over the next several months, you will have to
live by what is and- equally important- what is not in the contract.
If you ever talk to a home buyer who’s
been ripped off by a builder (that is, had a “negative home buying experience”),
you’ll notice one common thread: a bad contract. After you strip away all the
incompetent subcontractors, the builder-grade materials, and the outright deception by the
builder or salespeople, you’ll usually discover that it all starts with a lousy
contract that didn’t protect the consumer.
How do bad contracts zap good home buyers?
1) Generic real estate forms. Suprisingly, many new
homes are bought with just the generic real estate “Contract to Buy and Sell”.
While this may be fine for existing homes, new homes, new home construction is another
ball game. Although this generic contract does not identify the buyer and seller and the
amount to be paid, no mention is made of exactly what you’re buying or when it will
be completed. Some builders get around this problem with a “new construction
addendum,’ which is nice but it runs into the next problem.
2) Omission of details. Even the contracts written
for new construction are devoid of critical details. For example, it’s rare to find a
completion date and any penalty clause. No specs or materials are promised- just a vague
wording that says the home will be built in accordance with the “drawings and design
plans.’ If the builder drew those plans, the plans may still omit many details. For
example, a door opening is drawn on the plans but no mention is made whether it’s an
expensive, six panel, solid oak door or a cheap, pine hollow-core door. And it’s like
that all down the line: heating/cooling systems, windows, faucets- the plans give you no
clue as to whether you’re getting quality or trash.
3) Verbal Promises. The final straw of these bad
contracts is verbal agreements. The builder may promise a brick fireplace at the
beginning, but having no written agreement makes it easier for the builder to say later he
never promised you that. If you order a change but fail to put it in writing, the builder
may fail to make the change. Or the change will be made and you’ll be charged twice
the “verbal” price. Near closing, you may be shocked by huge bills for items you
thought were more affordable in earlier conversions.
This Tip was excerpted from:
Your New House, by Alan & Denise Fields, Windsor Press, 1996
ISBN# 0-9626556-8-6
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