Lawyer Brincefield said, however, that buyers have "no leverage" in negotiating contracts or in getting accommodations at settlement because of the hot housing market.
Because house prices are increasing so dramatically from when the sales contract is signed to when settlement occurs, builders can easily afford to give back a deposit if a customer squawks, Brincefield said.
Sonali Arya found that her house was far from finished at the time of the walk-through.
(Emilie Sommer For The Washington Post)
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Less Stress at Settlement
Here are some tips from experts on how to reduce stress when buying and closing on a new house:
• Look for a reputable builder. Check him out by talking to three to 10 previous buyers.
• Ask people who have already moved into the community about their experience with closing: Was settlement delayed? Why? And did the builder offer to pay for storage space or for any part of the delay?
• Know what is in your contract. Hire a lawyer experienced with residential real estate law and with the contract laws of your community. Put any changes to the contract, such as more time for notification of a settlement date or for appliance upgrades, in writing. This includes any changes promised orally by salespeople or other builder representatives.
• Don't be afraid to ask for changes in a contract. Though production builders generally do not make changes, sometimes they will, according to local real estate lawyers. "It doesn't hurt to ask," said David N. Crump, director of legal research for the National Association of Home Builders. "They're going to work with you; they don't want to create any hostile environment."
• Hire a private home inspector before the house is built, to follow it through construction and to accompany you on the final walk-through. Don't rely on county inspectors to find problems.
Sometimes builders will balk at allowing a separate inspection, so include that in a contract addendum. Be prepared if a builder asks to approve the inspector because he has had a bad experience with one in the past.
• Some contracts say the builder must give just five days' notice of the settlement date. Columnist and new-home-book author Katherine Salant says, "You should insist on changing this to have adequate time to arrange for a move." She recommends asking for at least 14 days' notice and as much as 30 days.
• Make sure you get a certificate of occupancy from the local jurisdiction. The certificate indicates that all the county inspections have been completed.
• Recognize that punch-lists, which tally up the items in the house that are not ready, are routine and that builders' contracts give them time, sometimes as much as two years, to make fixes.
• Remember that problems happen. Stay calm.
• Call city or county building officials if you think there is a code violation.
Many local jurisdictions also have special consumer affairs offices that deal with complaints about new-home builders or contractors.
• If you have a problem, document everything in writing and send all correspondence by certified mail.
-- Sandra Fleishman
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"If the buyer doesn't like it, the builder could care less because there are people standing in line to buy," he said.
While contracts may not require a builder to do more than refund a deposit if a settlement falls through, the standard sales agreements generally provide for buyers to pay a carrying charge or to cover the builder's interest costs if the buyer misses the settlement date for any reason.
Builder Havenner said a defaulting buyer generally loses only his deposit, but on a rare occasion could be charged for "specific performance damages" on the contract.
If a buyer has a hardship such as being called to military service, "we'll let them out and give them the money back," Havenner said.
Builders says they will also typically work with buyers who qualified for a house when they signed the contract but have lost ground financially because interest rates rose while construction slipped.
But "if a person misrepresents themselves as far as their financial situation, we have no qualms about keeping the deposit," said Havenner. "If we have built a home and have an investment of hundreds of thousands of dollars, it could be a real economic burden to us" to carry the costs beyond the expected date.
