Should I Have an Attorney Present When Buying New Construction?

For many, the idea of building or buying a brand new home is extremely enticing. Whether it’s because they can’t find “the right house” or they simply want something with the latest features and accessories, many assume buying new will be easier as they can avoid dealing with previous owners or problems with an old house.

However, that doesn’t mean you won’t experience any problems or stress at all.

Many experienced home builders or buyers of new construction will tell you that as great as it is moving into a brand new house, you won’t exactly be skipping through fields of daisies. There are some stressors that home builders must deal with that typical home buyers won’t, such as issues with contractors, problems with the property itself, going over budget, and more. And unfortunately, simply having the fortitude, patience, and a sizeable bank account to work through these common obstacles won’t always be enough.

One of the biggest ways you can protect yourself from these costly issues? By hiring a licensed attorney with experience in real estate to review any contracts before you sign them.

“[Although there] is no ‘need’ for an attorney in any contractual situation, there is a potential benefit in having the attorney review the purchase contract before the buyer signs," said Richard Imperatore, Licensed Title Agent and General Counsel at Associates Land Transfer Company. “Expectations and mutual understandings may be inadvertently omitted or misstated.”

Any ambiguous language in the contract can cause major problems for you down the road if a problem arises and it’s not clearly stated as to who is responsible for what.

According to Imperatore, if there is an agreement that survives settlement, such as a punch list (a contract used to organize the completion of a construction project), the attorney will be able to clearly define the obligations of both parties if there’s a disagreement between the buyer and the builder.

An attorney can review the builder's or seller’s contract with you in detail and potentially make changes that work in your favor and ensure the language is clear.

If you don’t, the results can be costly and emotionally draining.

“Interestingly enough, when talking new construction, a lot of people make the mistake of using the builder’s title company,” said Frank Dowd, Licensed Title Agent and Founder of Associates Land Transfer Company (ALT).

Recently, Dowd consulted with a woman whose boyfriend had passed away; now she’s fighting his kids for rights to the property title. Although they were not married and it was her money that was used to purchase the house, the couple assumed that if something happened to one of them that interest would go to the survivor.

“However, the builder’s title company never asked them how they wanted to take title to the property, so they never declared anything on the deed,” he said. Now the fight for ownership of the house may have to be decided by the court. Had they met with an attorney, it would be much easier for her to legally sort out the dispute. Unfortunately, things like this happen all too often.

Considering the contract includes information about the responsibilities of the builder and the buyer, it’s not uncommon for them to be swayed in the builder’s favor. And since not everyone is an expert in the industry, it’s easy to overlook these items.

So, it’s good to know that at least someone (and preferably someone with legal training) will have your back.

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