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Important Items in your College Station Construction Agreement

By Clay Lee

Real Estate Agent with Century 21 Beal, Inc.

July 12, 2010 08:02 AM

When building a new home, in College Station or anywhere, there are many important things to look for in your construction agreement. There are so many areas where pitfalls may occur that it is essential to make sure they are all addressed in your contract.

First and foremost, there is the completion date. You want to move into your new home as soon as possible, but what if it isn't completed on time? What is the penalty to the builder if this is the case? Make sure the specified date and penalties are cited on the contract.

Another thing to consider is the insurance. Who is the loss payee if there is an accident? The best case for this is to have you or your lender as the loss payee. An extreme but possible situation is this: if something happens to the builder and your house burns down, you could end up having to sue the builder's estate for the balance or to have the home finished.

Cleaning is another item that is often overlooked in the contract, but is an important aspect in the building process. A construction site should be cleaned weekly, especially if you are building in an already established neighborhood. Ensure this is cited in your contract.

Some additional items to consider:

Get a list of all subcontractors, materials, and where the materials come from. You want this updated weekly so if something needs fixed or if you need to sue someone involved, you have an exact record of all parties and materials involved in the building process.
Have a copy of your builder's warranty reviewed by an attorney before construction begins to make sure everything checks out.
Work out how you are handling overages or underspending when you are involved in choosing materials, etc. Do you get a credit if your choices result in underspending on the account? If your choices result in you overspending, are you required to pay the builder immediately?
Know exactly when you are paying for things. Only pay for things that have been completed by the builder. Do NOT give final payment until everything is completed.

As always, this is Clay Lee looking out for your real estate needs. Call me if you have any questions regarding this or any other real estate matter; I'll be happy to offer expert real estate advice.