Top Ten List of Issues with Sales Contracts for Homes Not Yet Finished Have the plans and specifications been approved by the buyer, and are they attached to the contract or in some other secure place?
What allowances are provided, and are they reasonable?
If the seller holds the earnest money, can he use it to pay the costs of construction?
Will interest accrue on the earnest money deposit?
Will it be hard to recover the earnest money if the builder walks?
What warranties is the seller providing to the buyer?
What is the procedure for change orders?
What degree of completion is required at closing?
What happens if the house isn't complete by the date of closing?
Is there a penalty for late completion?
What is the standard by which the construction will be performed?
Is a permanent certificate of occupancy required before closing?
What is the punchlist mechanism?
Are tap fees and utility connections paid by seller?
Who completes the landscaping, and when?
Who will be around to back up any warranty claims six months after closing?
What are the builder's credentials?
A Checklist for People Buying a Home still under Construction
By J. Albert Bauer, Esq.
NOTE: Almost none of these issues are addressed in the Real Estate Commission approved sales contract!