# New home purchase agreement



## Chad (Jan 30, 2011)

Hello I was wondering if anyone is familiar with the ins and outs of builders new home purchase agreements? I entered into one for a brand new spec home for full asking price and was one week from closing when I was informed by the builder that they were terminating the agreement and my deposit cheque will be mailed to me. The deal was conditional upon financing, home appraisal, lawyers review and home inspection I have spent money on a appraisal already and have the financing approved and now they just want to back out for some unknown reason. My question is this legal?


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## MRT (Apr 8, 2013)

you should already be working with a real estate lawyer, so you really should direct your questions to them ASAP.

each contract is different, but it would be highly unusual for a builder to be able to back out of an agreement shortly before closing. There would need to be some clause that permits them to do so, or else you can take legal action to force them to uphold their part of the contract (i.e. to sell you a completed home).

Did you meet the time deadlines for your conditions of financing, appraisal, inspection, and lawyer's review? If not, the contract could *potentially* be voided, depending on the wording of the conditions, but it really is impossible for anyone here to verify one way or another, without a copy of the contract.

Your best move is to call your lawyer's office first thing Monday morning.


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## marina628 (Dec 14, 2010)

I have heard of this once before ,second hand story from a contractor who did our tile work.A builder made expensive mistake in new home and tiled bathrooms in green tones instead of browns that home owner stated.The builder threatened to cancel the deal if they didnt accept the wrong tile because they were not spending 20k to fix it.Homebuyer buckled and settled but seems builder thought that was in their right to do.


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## Chad (Jan 30, 2011)

Yes I am doing everything required without any hiccups. My theory is they think I am a difficult client because I beat them up so badly on their asking price which in the end I paid in full anyways because they were so firm. I also complained to the builders head office in regards to the condescending and unprofessional way I was being treated by a certain sales agent. I believe she is now attempting to kill the deal because I made her look bad. So the sales agent doesn't like me but in the end all I want to do is buy the house. Now with less than a week before closing and full approved financing in place they terminated the deal. Here is the only explanation I was giving: "We feel it is in the best interest for both parties". Thanks and I will contact my lawyer on Monday.


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## PuckiTwo (Oct 26, 2011)

Chad said:


> .....1. My theory is they think I am a difficult client because I beat them up so badly on their asking price which in the end I paid in full anyways because they were so firm.
> I also complained to the builders head office in regards to the condescending and unprofessional way I was being treated by a certain sales agent.


That shouldn't be a reason to back out of the contract, you have a contract with a builder' company, not the sale agent. I wonder if there is something else wrong? Don't insist on fulfillment until you find out the reason for their cancellation. You may be glad that they backed out. I personally don't like deals where you get a lot of hassle.


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## Chad (Jan 30, 2011)

Yes that may be very well true... I wasn't asking for much a modest 2.5% off the asking price probably less than they would have to pay to a realtor's commission if I was using one. Instead all I received in return was "quit wasting my time" I then offered to leave the proposal with her in case they changed their mind she wouldn't even let me do that lol she then stood up an walked away from me.


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## PuckiTwo (Oct 26, 2011)

Chad said:


> Yes that may be very well true... I wasn't asking for much a modest 2.5% off the asking price probably less than they would have to pay to a realtor's commission if I was using one. Instead all I received in return was "quit wasting my time" I then offered to leave the proposal with her in case they changed their mind she wouldn't even let me do that lol she then stood up an walked away from me.


That's tactics to get you really interested. Why don'tturn the situation around and walk away from her? As soon as you indicate you have other optios...let's see what she does. You definitely must go to a lawyer. And be very critical about what he recommends.
Btw.is it a subdivision in which you buy? Are there any other houses sold? May you could ask other buyers about their experience


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## Cal (Jun 17, 2009)

Yes, I would discuss with a lawyer. I am willing to bet the home builder already did before the contract was written.


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## OurBigFatWallet (Jan 20, 2014)

Whether the sales agent likes you or not, you'd think they would want to sell the home. If you signed to buy at full list price and they pulled out I suspect it's more than a personality issue. Not sure if they are able to do that but as everyone has stated I'd contact a lawyer ASAP. Good luck


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## Mechanic (Oct 29, 2013)

A close relative of mine had a similar situation. They paid full ask as well and were told prices were non-negotiable. There were lots of promises made by the builder but unfortunately not written in the purchase agreement. They even made changes from the drawn plans that saved them money and called them "design changes" When the substitutions were brought up the builders agent said they weren't honoring what they had said and my relative could have his down payments back and they would sell the house to someone else, and also commented that prices had gone up and they could now get more money so my relative wasn't paying enough for the house!!. They made it very awkward and were actually telling the buyer they may just give them a refund. I suggested that if it happened, the buyer should sign nothing and immediately get a lawyer (other than the builders) It was quite tense as the purchaser was going to be in a situation with no home for self and young family as they had sold their residence and were in temporary accomodations waiting for completion after relocating. This is the 2nd time I have personally been aware of this happening, have been aware of it in both Northern and Central Alberta. Maybe it's the Alberta market ? not sure. I do know prices are getting a little out of hand for the quality that is being delivered. If I personally buy another new residence here, it will be in black and white before I sign and hand over money and will be reviewed by my own lawyer, seems like trust and honesty don't have very high values anymore. One builder even commented to a relative "I don't care if you're satisfied because it's not like it's a repeat type of business"


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## Westerly (Dec 26, 2010)

We also had a situation like that 6-7 years ago. The contract was iron clad in the builder's favour including the ability to cancel or up the price in certain situations. Further, the down payment which is typically put into trust was deposited directly in the builder's account AND was not secured against the property. Our lawyer advised against signing it, but we were too awestruck with our first purchase. It all worked out, the builder was reasonable in the process and the property had increased by the amount of our DP by the time we moved in.


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## seankearns (Feb 14, 2014)

As has been stated, these contracts are usually very much in favor of the builder, and if you don't like the terms they sell it to someone else. 

For future reference, its usually true that builders don't move much on price. The more likely way to negotiate successfully is to get them to throw in free upgrades. Upgrades have a HUGE markup with almost every builder so getting them to throw in upgraded trim, next level cabinets, hardwood or something like that cost them very little compared to what you would have to pay them to get it done.


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