Homebuyers who unwittingly sign a Contract with a Homebuilder who is adept at ripping-off their home-buying customer once a Contract is signed are in for an expensive ride.
Here is how it works… The builder has fashioned a Contract that is filled with strictures and guidelines that dictate what their customer is required to do and what they are obligated to once the Contract is signed. This same contract has little or no language that clearly spells out what grade of materials the builder will utilize. In addition, the contract may or may not reference ‘Cost Allowances’.
Simply put, the Contract is vague as to the homebuilder’s responsibilities.
The Contract is vague and tilted in favor of the builder as it deals with choices and quality of construction materials, tolerances, workmanship, construction milestones (how long it is going to take the builder to complete the home), etc.
There is, typically, not one word about penalties imposed on the builder for not building the home in a set amount of time/by a set date or for utilizing unsuitable materials.
With a ‘vague’ and incomplete Contract, at every step of the way, the builder can install inexpensive and completely inappropriate materials, fixtures, appliances, floor coverings etc. When their customer complains, the builder simply points to the unrealistic ‘Allowances’ that the builder set for materials, fixtures, appliances, floor coverings, etc. and say “ we have already exceeded the ‘allowances’ we agreed upon.
This is a clever scheme that some builders utilize to extract more monies from their customers.
Specifically, here is how they do it…
Be vague on materials, fixtures, appliances, floor coverings, etc., place an unrealistically low cap on the cost ‘allowance’ for these items, have specific language in the Contract that states that if customer requests a ‘Change Order’, the cost of the change order is ‘Cost + 25%.
It is a clever system that dishonest homebuilders have been utilizing for decades.
Don’t get caught in this web of deception.
Next Article: How the builder uses slight-of-hand to extract the most money from their customers with each and every ‘Change Order’.