Builder contracts can be complex and confusing for people with no experience. You must understand the terms and how they impact the project. That is why it can help to have real estate agents review builder contracts.
This post will cover what real estate agents look for when reviewing builder contracts. If you want to learn more, you can click here for part 1 of this post.
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How Real Estate Agents Review Builder Contracts
Change Orders and Variations
A change order involves modifications or changes from the initial construction plan. An example of a change order would be timeline changes, material costs, scope of work, etc. This section in the builder contract will cover change orders and their approval. There must be clear guidelines for communicating change orders.
Damages and Delays
This part of the builder contract deals with project timeline delays. The project should have a completion date, but events can cause things to run late. However, some events are out of the builder’s hands. Natural disasters are one example of excusable delays. The contract should have terms covering delays and what is excusable.
Dispute Resolution
Your real estate agent will also review the contract terms regarding dispute resolution. You want to avoid problems with your builder as much as possible. However, some disputes are unavoidable. If there is a problem, these clauses in the contract will set the guidelines for settling disputes. Without adequate terms, buyers could find little recourse if a problem arises.
Subcontractors and Suppliers
The construction process requires many people, including real estate agents, engineers, architects, and suppliers. You must thoroughly review the terms regarding subcontractors and suppliers. A real estate agent can help you ensure that these subcontractors are licensed, have good standing, and are insured. They can also ensure the builder uses quality materials when building the home.
Permits and Approvals
For these, you can ask your real estate agents about the permits and approvals for the building of your house. They will check in the builder contract who is responsible for obtaining licenses and permits.
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