Will I lose the entire downpayment amount if I walked away now?

[Acollector]

I have some questions pertaining to closing I need advice on. This is in California.

I insisted on a home inspection on a home, even though it's supposedly "brand new" build by a large and well-known builder. The agent (who was recommended to me by my credit union) has DISAPPEARED ON ME although I get read notices to all the texts I'm sending him. He recommended his "friend" who is a home inspector but the guy has horrific / extremely negative reviews on Yelp. So I went with another inspector who had great reviews and feel did a good job for me. This, I think, pissed the agent off because it was the LAST time I heard from him. This is another issue.

But the main thing is this: The inspector noted a few things to be fixed, and then said he'd re-inspect it once the builder has repaired the problems he identifies in his report. The report and the findings were submitted to the builder on Friday, the 2nd. On Saturday, the builder's agent told his team will fix it but did not give me a specific date by when this would happen. In the meantime, they want me to drop off my downpayment cashier's check by this Friday, the 9th.


1. If I drop off the downpayment check, what is the guarantee the builder will fix the issues noted in the inspection report?

2. Even worse, is this. If I drop off the fat check, and then decided I am not going forward because the issues reported were not fixed or fixed to my satisfaction, the escrow officer for First American Title says that I cannot get *any* money back unless the builder agrees IN WRITING. Yes, apparenty the builder will have agree IN WRITING for me to get my ENTIRE downpayment check of over 250K back, and not just the "earnest money deposit" of 5K! This is really freaking me out! My purchase contract says the "liquidated damages" are 5K. But can the buider keep this HUGE amount if I walked away for any reason once I turn in the downpayment over to escrow company? She instead helpfully suggested that I wire the funds instead of dropping off a cashier's check after the builder has completed the repairs and the re-inspection report is satisfactory!

Can anyone who is familiar with real estate transactions please help me understand this? I am older but this is my first house and we saved this money over 12 freaking years. We could never make this much again because now we're close to retirement age and would be destroyed and unable to rebuild this savings if we lost this amount.

I do have issues with how the real estate has disappared on me but this is even worse and a terrifying amount of money to "lose". Please help!

Estimate cost of repairs and put in an escrow (seller funded) until done by certain time. If not completed you get money to have done or corrected by contractor of your choosing. This is way would handle in NC. IF I really wanted it!

 

[imnontrad]

Did you have your contract written to say that it was contingent on a satisfactory home inspection and all issues fixed? Do you really LOVE the house?
You might consider hiring a real estate lawyer to advocate for you. You could also request a certain amount to be kept into escrow to ensure all issues are fixed - and make the requirement high enough that they won't bother to fix and just walk away from that escrow amount.

 

[SonofCohoes]

Hire a lawyer.

 

[davidfin]

It’s not unusual that homebuyers of brand new homes have a punch list that a reputable builder will resolve to your satisfaction. That’s typical. Did your inspector find anything other than cosmetic issues? Anything that must be resolved before you would move in?

Most homeowners of brand new homes go around with blue masking tape and mark anything needing attention. The home builder usually has a highly trained crew to take care of the punch list post move-in.

 

[meleana]

Hire an attorney. We had a house built and we paid the builder as he constructed the house a little at a time. (We gave a small down payment upon the purchase agreement)

In this state an atty is not required as it was in the state we moved from, but we insisted on hiring one anyway. This keeps the builder at least a little more accountable.

He wouldn’t let our inspector come to the house while he was building. But we did have him come right afterwards and also a year later before the warranty expired.

Meanwhile before closing we drew up a punch list and hounded him for an entire year to get stuff done that we couldn’t. He did it piece meal but got it done eventually.

Building/ buying a home is stressful. The builder holds most all the cards. The nature of the beast.

Our whole house cost $274k in 2029. I can’t imagine risking that kind of money.