You may need to think twice before entering into a contract with a builder for an Extended Delivery Home.
Is an extended delivery home really the best option for you when you buy your home for retirement? Delaware real estate broker, Kathy Sperl-Bell of Active Adults Realty explains the current state of extended delivery homes and how you may need to be cautious and consult a Buyer’s Agent before entering into a contract.
Do you recommend buying an extended delivery home?
Hi, this is Kathy Sperl-Bell of Active Adults Realty in Delaware. New home construction has been booming all over Delaware and that can be good news and it can be not so good news, depending on where you are in your process. We have seen some deliveries in contracts of anywhere from three months to 18 months or longer. Wow, 18 months, that’s a really long time and a lot can change in 18 months.
You know, in every builder’s sales contract it actually says that they have up to two years to deliver your new home and deliveries can slip. Lately, we have seen some deliveries slip anywhere from two months to four months. Well, what if you get to 18 months and the delivery slips another two to three months? That’s a very long time. Read the fine print. None of the builder sales contracts allow for a price reduction in the event of a market correction. Once you’ve finished negotiating the contract, you’ve chosen all of your options and upgrades, you’ve provided proof of funds for a cash purchase or a mortgage pre-approval if you’re going to be financing, it’s all complete. Then you give them 10% of the total purchase price.
That is not refundable if you change your mind. What if, six months from now, you learn that you could have bought that house for $20,000 less? What if the appraisal comes in below your contract price? What if the salesperson keeps saying, “Well, you know prices are just going up and that phase is going to be totally sold out before we even move dirt.” I understand that that’s scary but have you thought about this? Perhaps that builder has the same model available in another community in the timeframe that works better for you? Have you checked to see if there’s another builder that might have something quite comparable, again, in a timeframe that works better for you?
If you’re really not ready to buy for another six months, there might be something really fabulous that’s coming on board that you don’t even know about yet. I understand, it’s so easy to get caught up in all of the excitement but I’m advising caution. As your buyer’s agent, we’re on your side and we want you to make an informed decision, one that you’re going to be happy with. If you go direct to the builder salespeople, remember they have one job, to sell you a home in their community. If their delivery times are 18 months or more, that means they need to sell you on an extended delivery home.
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