Posted by ScottE on April 10, 2000 at 22:40:00:
tell him to POUND SAND. I’d be looking into the background of any builder that proposed that deal.
IMHO
Scott
Builder wants 20% down at start… - Posted by Steve Heller
Posted by Steve Heller on April 10, 2000 at 20:16:29:
Hi everyone,
I am building a new house and the builder wants 20% down before he starts any work. Heck he may die the day after we pay him. Can anyone shed some light on whether this is typical practice? If not could you make any suggestions. The builder has made me a great price on putting up the shell for the house, but I am a little leary about giving out cash before any work is done.
Thanks,
Steve
Re: I didn’t put twenty percent up but… - Posted by Doug,KY
Posted by Doug,KY on April 11, 2000 at 08:47:21:
I owned the lot. The lot wasn’t free and clear either; I stilled owed $13,000 on a $16,000 lot. I put the lot up as collateral. Secured a construction loan for the balance of the new home. The Builder invoiced me monthly. I took the invoice and any other bills associated as supplied by me to the bank. They verified the invoices by inspection and cut me a check from the construction loan. Once, the bank disagreed with the amount of work done and cut a check for a slightly lower amount. I contacted the builder and informed him of the situation. No problem, he took what the bank had aurthorized. The only other thing I can think of is about change orders. The builder wanted to verify I had funds available to cover the costs. Gave him a copy of my bank statement or saving account. I hope this helps.
Re: Builder wants 20% down at start… - Posted by Jonathan Rexford
Posted by Jonathan Rexford on April 11, 2000 at 07:24:42:
Steve,
It is common practice for a builder to recieve at least a 10% deposit at time of closing or signing of contract. Look at the builders contract and see what type of draw scheduld you have. Is there financing involved or is this a cash transcation. Any time I do a cash transcation I want 100% of the funds put in escrow and the draws Inspections/administrated by a Licensed Apprasier. You had menitioned a shell? Can the builder only pull that part of the permit and leave. In Florida a Contractor cannot pull a partial permit to build a house when there is financing involved. You have to realize that the builder has a lot expence going into this transcation right away. Soft costs alone can equal 5-8% of the transcation( Permit,electrical, water, sewer, health dept, planning traffic impact fees) What about clearing soil borings Fill. All of these things are Soft Costs. If I can be any assistance please give me call or email me.
Hope this helps,
Jonathan Rexford
Builder/Mortgage Broker
Rexford Incorporated
P. O. Box 650099
Vero Beach, Florida 32965
Office (561) 569-4087
Fax (561) 569-0279
Cell (561) 532-0029
Pager (561)458-5658
Re: Builder wants 20% down at start… - Posted by Ben in Ohio
Posted by Ben in Ohio on April 11, 2000 at 06:52:20:
Put it in escrow to be released upon approval of the rough. Or walk. Why not build it yourself, it really isn’t too difficult. I will walk you through it if you like.