02-22-2013 10:45 PM
I am for the first time on the market for a new construction, and I'm currently interested in a pre-sale. However, I'm feeling pressured by the listing agent into signing a Purchase and Sales Agreement with very little in terms of contingencies, while at the same time with very few specifics about what exactly I would be buying. This is a new community, where they don't even have a model ready yet, so we ouldn't even see samples of their carpet, flooring, cabinets, countertops, quality of workmanship, etc.
My question is if it's fairly common practice these days to have builders pre-sell new constructions without clear specifications of what will be built (site plan, floor plan, specifications, materials used, carpet, flooring, etc.) and with a PSA clearly eliminating any way for the buyer to back out, especially with pre-payments for options and upgrades.
We really feel we would love the house, but are amazed at the listing agent's persistence to "buy blindly", to sign off the PSA having only seen a simple site sketch, and floorplan, but with a significant pre-payment of options and upgrades, yet very little in terms of contingencies. Is this a common practice, to blindly buy a pre-sale on simply the trust that you'll get what you can only dream of ?
I would appreciate any advice, especially from others that may have gone through the same experience, as well as from Real Estate Agents that have dealt with new construction / pre-sales ...
Thanks in advance.
02-22-2013 11:07 PM
I'll be curious to know what responses from those in the know will be. I would have expected not only complete blue prints, but extensive information on the materials that will be used in every single room and in the landscape. It doesn't make sense that you would negotiate a price without knowing if you countertops are laminate or granite, your floors maple or linoleum, your patio bluestone or concrete. There is no way I would procede in your shoes.
02-23-2013 07:10 AM
@hibiscus, maybe I wasn't clear enough. I do know where there will be carpet vs. hardwood vs. lynoleum, and whether there will be landscaping, and a few more things we picked. However, I would have expected a few more details to either be "negociated" and specified ahead of being locked into a "mutually accepted" contract for the most expensive purchase of my life, like exactly what kind of carpet, what kind of hardwood, cabinets color, etc, or have some sort of clause that says if they can't offer what would be happy with there would be a way out of the contract.
And not only that, but we talked about some changes to the floor plan (eg. moving some windows to place them symmetrically, moving some walls around a bit, building a full height instead of a half wall, etc), and even though they agreed to make them, I haven't yet seen the final blue-print, it's not part of the contract they want me to sign and be locked into...
And to be even more clear, I've talked to someone who had a home built back in 1996, and he told me he had a 4 inch thick file of specifications on what he would be getting, down to the level of thickness of the pad underneath the carpet, etc. I'm not entirely sure if that was all part of the PSA, or later additions, so I guess another question would be if any specifics that are discussed over email, phone, fax, either before or after a mutually accepted PSA are also "binding" in any way.
Thanks. I hope this clarifies it a bit more.
02-23-2013 01:41 PM
Right. I would want to know the brand of carpet, the exact kind of stone. Everything. Aren't there usually a gazillion upgrade possibilities as well?
Good luck with whatever you decide!
02-25-2013 01:53 PM
Just to be clear, do you currently have someone representing you? An agent or attorney?
Because unless you have some skills and experience you need someone fighting your corner. There are good experienced agents who will hold your hand through the whole deal for a fee, and there are attorneys who will review all docs and protect you for a very reasonable sum of money.
While mostly these things are straight forward there is great peace of mind and real protection having a pro who is looking after your interests.
02-26-2013 01:05 PM
My brokerage works often with new home builders and from my personal experience your situation sounds pretty standard, particularly if there's no model home to view yet. Did you get a chance to view colorboards and select some colors, and did you receive a copy of your floor plan/elevation?
Many of the details of the home WILL be included in your purchase and sale agreement, which should total around 40 pages - give or take. If you haven't seen/signed that many pages when you purchase, I would ask the builder's agent if there's more paperwork coming down the road. Often what I've seen is that builders are anxious to start getting presales & the general public is anxious to learn more and start buying before even the builder has all the information in hand, so in new communities its not uncommon for a lot of the detail to come in down the road (but before closing). Some builders that we've worked with have sent out just the main agreement of a few pages for signature to lock in the sale, and the rest a few weeks later as they get the information and the documents from their attorneys - especially if they are a smaller building company.
Even though the home will be brand new, I still recommend getting a private inspection when it is complete and before you close to make sure everything was done up to code. That should be in your contract also.
I hope that helps a little!
02-27-2013 10:12 AM
We found a pre-sale house Dec 2011. Our offer was accepted, but we backed out after I came to town and did not get answers to many of our questions. This builder listed one house at a time. They told us we would have to close by June, and we weren't sure about the timing. In March we puchased another home in the same sub., because other people were buying them, so that gave us confidence that it would work out ok. I flew back to select cabinets and floors in April, but no one would call me back. Finally I called the city and found out the house was too big for the lot. The builder made the basement larger to make up for the fact that the home had to be modified. It did not work for us, because we wanted the upstairs versus kitchen laundry. In May builder then sold us another home for $10,000 more than it was listed in March and promised it would be completed by Aug 15th. Our home closed in Sept and the June home closed after ours. Out of the 15 homes in this sub, each one is unique. We made design changes in our kitchen, others made the den a bedroom, the laundry room into a bathroom, the 2 story great room into one story so they have an extra bedroom, another spent close to 100,000 on interior and exterior changes. The builder had us go to each of their vendors to select what we wanted. We had to pay them cash for all of our upgrades, but they did not show up on the price of the house at closing. We enjoyed working all of the vendors except one. It was a lot of work driving all over to their locations, but our house turned out great. The vendors gave us more choices than the builder had on the list. The city was more helpful than the builder. All of their permit information is on line. We paid to have blueprints of the home and also photocopied everything we could find out about the subdivision from the city. It was helpful to have the private inspection, because then we had our "punch list" started.
02-27-2013 12:59 PM
21 items...GFCI at sump pump failed to reset, furnace discharged into crawl space, add caulk, raise the temp of water heater, adjust cabinets, emergency gas shut off valve...the builder fixed everything on the list, but without an inspection we would not have known what to ask for.