Tips for Buying New Construction Condo or House in California
Custom drafted New Construction purchase contracts differ widely from each other and from the standard CAR contract for the purchase of "existing" homes.
Hire the correct attorneyWhile your real estate agent represents you as the buyer, agents are not attorneys who can interpret the voluminous packet of California Civil Codes and legal documents that Developpers hand out to buyers which include Senate Bill 800 et seq containing the California Civil Codes that impact your rights and obligations as buyer. Hire a qualified attorney well versed in this area of the law to explain what the consequences of each provision.
Loss of Deposit?Look for discussion of what happens to your Deposit if you decide to cancel escrow. Often, new construction contracts contain DRACONIAN terms that severely restrict a buyer's rights.
Take it or Leave it?Certain Developpers may make it sound like their contracts are non-negotiable. Not true. I have successfully added terms to such contracts to protect the buyer, which the buyer's agent happily submitted to the Seller, without stating that an attorney was used. The Developper agreed to the change and eveyrone was happy.
Do not Draft a sentence if You Are Not Prepared to Defend it in CourtI often counsel agents and teach risk management and consumer protection in real estate matters. I have a saying "Do not draft a sentence in a contract or addendum, UNLESS you are prepared to go to Court and Defend it if a lawsuit is filed." The reason is that non attorneys may draft an addendum or a revision to this New Construction Contract and it may not be legally enforcible or ambiguous. If a dispute arises over the interpretation of that clause that was added to make the deal go through, guess who will be on the hook for malpractice? A litigator who is familiar with such transactions is your best bet in drafting revisions to your contract.