Purchasing a “to- be-built” home is a completely different animal when it comes to representing a home buyer.
While the builder usually has their own contracts that your buyers may be required to sign, there are some questions that I recommend that you ask on behalf of your clients so there are no misunderstandings when it comes time to close the loan.
Here are some very important questions to ask so your client is totally informed as to what’s involved when building a new home.
Is the earnest money refundable if there are issues with completing the terms of the contract?
Does the builder pay for title insurance?
How long does it usually take to complete the home?
When is the home considered “complete”?
Is the builder offering any incentives?
What types of “upgrade” allowances does the builder offer?
Do the sub-contractors provide “lien waivers”?
What happens if the home does not appraise for the contract price?
What happens if the home is not completed within a reasonable time period?
What happens if the lender is not able to close by the contract date?
Does the builder have references from previous clients?
I recommend that you ask these questions on a partially completed home, too.
What other questions would you suggest that I add to this list? List them in the comments below.