Building a new home? Well, some of you are in for quite a ride.
If you choose a homebuilder whose contract is vague when it comes to the builder’s responsibilities, yet precise when it comes to their customer’s (YOU) responsibilities and penalties for failure to comply, you may be in for an unpleasant and costly experience.
If the Homebuilder’s Contract doesn’t reference the plans, specifications, precise materials and components descriptions, and accurate cost allowances for each discipline (I.e plumbing, electrical, fixtures, appliances, HVAC types, roof materials, slab costs, etc.), nasty disputes can arise.
This can benefit the homebuilder throughout the building process.
YOU expected and, were quite possible told, that the appliances and fixtures were going to be of ‘X’ quality. When they arrive, you discover that your $350,000 dollar home (you are welcome to substitute the value of the home you are thinking of building) is being fitted with fixtures and appliances from the ‘scratch & dent’ sale at the local appliance store.
You protest. The builder quickly points to his Contract. You protest. The builder points to the $5,000 ‘allowance’ for the appliances and fixtures. You protest, and explain you had no idea that the ‘allowance’ was so low.
The builder explains that as per the Contract, if you want to ‘upgrade’ the appliances, this is a ‘Change Order’. Change Orders, are ‘cost’ + 25%, and an installation fee.
‘Cost’ is a relative term. Whose ‘Cost’, the builder’s or yours?
If the builder has a discount rate at which he/she buys appliances and fixtures from their supplier, are you paying what they are paying + 25%, or are you paying the retail price that they are invoiced, +25%?
There are many homebuilders, at all price ranges, that are honest, diligent, hardworking, pleasant to work with, and care about their home buying customers. Don’t be complacent and choose a builder who is adept at ripping-off their customers. Have a competent attorney third-party review the Contract, plans, materials specifications, allowances, etc.
