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Financing, Mortgages and Insurance What options are best for you and your situation?


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Old 2010-06-24, 08:50 AM
momof4 momof4 is offline
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Question deposits?

Hi all!

I am a newbie in every sense, first time home buyer so have never built either

My question is in regards to the builder deposits....
Seeing as how closing is about a year away, or would be for me anyways, what happens if your financing falls through because something happened?
Do you lose all monies paid to builder?

If this is the case I'm very afraid to go with a builder that wants 10 percent[ i'd be looking at around $60,000 } just in case.
I'm a very cautious and anxious person, yes i guess neurotic but I can't help it and who knows what can happen in a year....
thanks
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Old 2010-06-24, 09:01 AM
Torune Torune is offline
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If you are not comfortable about your future financial states, don't buy new construction.
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Old 2010-06-24, 09:04 AM
momof4 momof4 is offline
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I am asking a simple question- whether or not it is all forfeited. Its not that I anticipate anything but no one can guarantee the future
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Old 2010-06-24, 09:08 AM
RSCaledonia RSCaledonia is offline
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Choose a reputable business who has been in the industry for a long time (ie, they are less likely to go BK).

Usually deals are subject to approval of financing and approval from your lawyer.

Choose a builder that has a good reputation from the people on this site. If you have a bad gut feeling walk away.
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Old 2010-06-24, 09:12 AM
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mc_ottawa mc_ottawa is offline
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Quote:
Originally Posted by momof4 View Post
Hi all!

I am a newbie in every sense, first time home buyer so have never built either

My question is in regards to the builder deposits....
Seeing as how closing is about a year away, or would be for me anyways, what happens if your financing falls through because something happened?
Do you lose all monies paid to builder?


If this is the case I'm very afraid to go with a builder that wants 10 percent[ i'd be looking at around $60,000 } just in case.
I'm a very cautious and anxious person, yes i guess neurotic but I can't help it and who knows what can happen in a year....
thanks
Undoubtably, it would make sense that the builder would be eligible to take some, if not all, of your deposit.

The deposit is your 'guarantee' to them that you will follow through with purchasing the house. Otherwise, they could have sold your lot to someone else/built a different home, etc.
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Old 2010-06-24, 09:32 AM
momof4 momof4 is offline
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Yes, i agree that they should and probably do keep all monies, but was wondering if maybe you would get back a portion seeing as how they will retain and sell the home.

Perhaps it's circumstantial and dependent on the builder.
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Old 2010-06-24, 09:36 AM
PJD PJD is offline
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Originally Posted by momof4 View Post
Yes, i agree that they should and probably do keep all monies, but was wondering if maybe you would get back a portion seeing as how they will retain and sell the home.

Perhaps it's circumstantial and dependent on the builder.
I heard that my builder has done that in some cases, people separated before closing etc. and they gave them their deposit back and sold the house. But it is hearsay so I can't confirm it first hand. In any case, it would be on a case by case basis and depend on the builder because they otherwise do have the right to keep your deposit. But those types of questions you should really clear with your lawyer. This is after all a legally binding contract you're signing so you should be comfortable.
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Old 2010-06-24, 09:43 AM
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xdarrylx xdarrylx is offline
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Mattamy's policy is that if you can't close due to financing, they keep your deposit - the ENTIRE amount. Depending on the home you build with Mattamy, it ranges from $15,000 to $35,000.

Deposit Required for Village and Urban Townhomes
$5,000 at time of offer, $5,000 in 30 days, $5,000 in 60 days
Please bring 3 cheques at time of offer.

Deposit Required for WideLot Townhomes
$5,000 at time of offer, $5,000 in 30 days, $5,000 in 60 days, $5,000 in 90 days
Please bring 4 cheques at time of offer.

Deposit Required for 34' and 36'Single Family Homes
$5,000 at time of offer, $10,000 in 30 days, $10,000 in 60 days
Please bring 3 cheques at time of offer.

Deposit Required for 43' Single Family Homes
$5,000 at time of offer, $10,000 in 30 days, $10,000 in 60 days, $5,000 in 90 days
Please bring 4 cheques at time of offer.

Deposit Required for 50' Single Family Homes
$5,000 at time of offer, $10,000 in 30 days, $10,000 in 60 days, $10,000 in 90 days
Please bring 4 cheques at time of offer.
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Old 2010-06-24, 09:50 AM
foxborough foxborough is offline
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You should never put $60K down as a deposit as that amount isn't warranted with Tarion. You are correct though - buying a house now that will not be built for a year plus down the road has considerable risks. The builder may go kaput, prices may fall, your personal situation may change....the list just goes on and on. That is something that you have to be totally comfortable with when you enter a contract today to purchase something that doesn't exist yet. If you cannot fulfill the terms of the contract, I would think that remedies under contract law would kick in....i.e., the builder could sue you to enforce the contract, the builder could sue you to nullify the contract and for expenses related to selling it to someone else, the builder could just sell it to someone else and return your deposit.....depends on the builder.
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Old 2010-06-24, 09:50 AM
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mom2philip mom2philip is offline
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Which builder is requiring 10%? 60K is a lot of money to put down for construction. We only had to put 25K on a single with Tamarack.

You can get your financing approved now for a closing in a year from now. Once they check your paystubs and call your employer that's it.
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