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Am I in default with Builder?
Naperville, IL
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Posted 5 months ago in Contracts / Agreements
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I signed a contract with a builder last year. The house is almost complete and it appears I will not be able to sell my condo on time as the economy has taken a major nose dive (after signing the contract). Homes comparable are selling for 25k less than what I owe. To rent my place out, I would need a cosigner which I do not have. I obviously cannot get another mortgage. If I get denied by several different banks (which I will), am I still in default?
Additional information
The contract states I would be in default if I fail to Make any payment required under the agreement (which I did) Make a mortgage application or material selections as required in this agreement (which I did) Close as scheduled (cant close if I cannot get a mortgage) Properly disclose all requested credit info, including any facts that could result in a denial for of Mortgage approval (I have been in contact with the sales rep throughout the process) comply with the illinois real estate transfer tax act perform any of the obligations required by me Answers (2)
David C. Ansani
This attorney is licensed in Illinois.
Posted 5 months ago.
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From what you say, you are already or will soon be in default. As a practical matter, your best bet is to try to get the builder to agree to work with you so that you can get more time to sell your condo. Remember, they probably want you to close and buy the house. Did you get denied for loan within any mortgage contingency period in the contract with the builder and follow the process for reporting that to the builder? You should have the contract reviewed by an attorney to give a clear idea of your rights.
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Mazyar Malek Hedayat
This attorney is licensed in Illinois.
Posted 5 months ago.
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Your question is whether you are in default under your contract with a builder. Based on what you've written, you technically already are in default. But you may also be able to work through that default after talking it over with the builder, or even find an "out" clause in the contract itself. I have a lot of experience with builder agreements, having written and reviewed a lot of them. It would help to take a look at this one before drawing any further conclusions. Long story short, you should be proactive in this situation. Waiting will just make things worse: that is the "catch" with real-estate and construction contracts - they require you to be proactive or else stand in a very weak position. And bargaining from a position of weakness is not a good proposition.
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