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Home Builder’s Corporate Office Often Must OK New Home Deal

Posted by Tony Sherman on May 14, 2015
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Interesting Q & A from prominent Phoenix Area real estate attorney Chris Combs regarding recent offer a buyer made to a home builder in Gilbert, AZ.  Always remember a new home contract is never accepted until you received a copy signed by the home builder’s designated broker or authorized corporate officer.

Question:  A new subdivision is being developed near our Gilbert home.  Last Saturday we went and looked at several of the model homes in the subdivision.  One of the model homes we loved, and we spent all day negotiating price, upgrades, and other contract terms.  At the end of the day all of the paperwork was signed by us and the sales agent, who told us “Congratulations on your new home!”  My wife and I then went out and celebrated that night!  The following week we received a telephone call from the sales agent telling us that the purchase price needed to be “adjusted” upward by $15,000 or we would not get the home.  The sales agent directed us to fine print language in the purchase contract that required a corporate officer of the homebuilder to sign and approve the purchase contract.  Is that legal?  Do we have to pay the additional $15,000?

Answer:  Many new home purchase contracts have that type of language requiring the signature of a corporate officer, and not just the signature of the sales agent, before there is an enforceable purchase contract.  Therefore, unfortunately, if you want the home you will probably have to pay the additional $15,000.

Note: On the first visit to a new home subdivision a buyer should generally be accompanied by a real estate agent.  Most homebuilders are happy to pay the cost of a real estate commission in the sale of a new home, and a good real estate agent’s advice can be very helpful.  A buyer should know that, if the real estate agent does not register with the homebuilder as the buyer’s agent on the buyer’s first visit to the subdivision, the homebuilder will normally not pay any real estate commission.

Note: The standard Arizona Association of Realtors residential resale purchase contract is used in at least 95% of the sales of existing resale homes.  In the sale of new homes, however, each homebuilder has their own form of purchase contract.  Therefore, a detailed page-by-page review of the purchase contract, with the assistance of a real estate agent or attorney, is strongly recommended.

If you are looking for an experienced New Home Buyer Broker to help you locate and purchase a new home in the Metro Phoenix Area, contact Real Estate Brokers Tony & Cassie Sherman with Arizona Team Realty, prior to visiting the Home Builders Model Home Sales Office.  Most AZ Home Builders have registration policies that state a home buyer must have their Buyer Broker/Agent with them when they first visit the home builder’s sales office.  Tony & Cassie have over 27 years combined experience representing buyers during the new home search, purchase and building process.

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