Understanding A New Home Sales Agreement

Building a brand new home can fun and exciting.  It is an opportunity to finally get a home that was designed and built for you and not someone else. But to get there, you will need to sign an building agreement with a homebuilder.

So, let me share with you some of things that I would do and or look for before I sign that building agreement.

  1. Get everything that you expect in writing before you sign and not after. You may trust him as much as you do your own blood but it is just good business to get everything in writing.
  2. Here in Michigan, we have a real estate transfer tax. Make sure you know who is paying for that tax. It adds up.
  3. Make sure you get any promised warranty in writing and make sure your new homebuilder pass on to you all the manufactures warranties that come with the products that they may use.
  4. Look closely at all the clauses that deal with conflict in their agreement. You will get a good sense on how your builder deals with conflict by reading his or hers clause. If they seem to be a fair way to resolve conflict, that is a very good sign that your builder is a fair person. BUT,if those clauses seem to  always be weighted to their side, that is a sign of a person who is going to be difficult when it comes to conflict.
  5. A good agreement not only should list what you are getting, BUT it also should inform you of things you should not expect to receive.

I have been part of many meeting trying to develop that prefect agreement that deals with every possible scenario and I am here to tell you that it is impossible. The 2 biggest things to remember are that :

  1. Conflict occurs when expectation are not met. So make sure both sides expectation are understood.
  2. You will get a good understanding on how your builder will act if conflict occurs by reading your builders building agreement and paying attention to clauses that deal with how to resolve conflict.

Good luck building your new home or buying a new home. If I can help you in any way or answer any question you may have about

  • Building a new home
  • Designing your new home
  • Buying a new house
  • Selling A Home

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