One sign that the real estate market in Northern Virginia is still very soft are the number of people who signed contracts to buy new homes who are trying to get out of them:
Lisa and Reggie Starr thought they were getting a good deal when they signed a contract to buy a new six-bedroom house in Woodbridgealmost a year ago. But after they had trouble selling their own house and wanted to get out of the deal, the fine print in their contract became a very big obstacle.
“There’s no contingency for the sale of your home. There’s no contingency for financing. ‘No refund will be due to you’ — it’s clearly written in the contract,” said Lisa Starr, who admits that she did not fully understand the document when she signed it. “You get all excited. You’re about to build your dream house. I wasn’t looking for anything to go wrong.”
Now, after rereading the contracts and consulting lawyers, the Starrs and many other would-be new-home buyers are finding that the sales agreements they so enthusiastically signed just a year or two ago have left them little wiggle room as settlement day approaches. Indeed, some consumer advocates and real estate lawyers who have been fielding calls from remorseful buyers in recent months say few contracts are as rigid and one-sided as those for new home sales.
Did you bother reading the contract when you signed it ? If you did, did you fully consider the consequences of what might happen if the market for new homes collapsed before you went to closing on the house you just signed a contract for ? More often than not, I’d be willing to guess that the answer to those questions would be no.
Of course builder contracts are one-sided and heavily favor the builder. Building a home is no small task. It’s a major investment of money, time, and materials and it’s only logical that a builder would want to protect itself from the possibility that someone could back out of the contract at the last minute. You don’t have to like it, but if you want to buy a brand-new home, you do have to live with it.
As the article points out, though, nobody was complaining about those contracts when the market was booming. Gee, I wonder why.
