@Caroline S. - It really depends on the purchase agreement and any other documents you signed. Since construction has not started, you have a better chance of only losing $3k. My recommendation is to pay an attorney $250-$500 to review and give you sound advise, which could save you $7k in the long run
@Caroline S. - the builder is going to say you owe it whether or not its in the agreement. My recommendation is to have your attorney review and send a cancellation/rescind letter advising the builder you are no longer continuing on the deal. If the builder gets that from a lawyer, in more cases they will not fight it as it will cost them more to fight it than what they could get from you.
@Caroline S. Interesting that the EMD is paid in installments. Usually a builder will ask for the EMD upfront in one lump sum. Are you sure its an EMD deposit, meaning your money is being held in a separate escrow account? Has the land been taken through entitlements yet and when is the build start date? There are too many unknowns here to give you good advice and without looking at your contract, it would be hard to advise you. As far as the EMD is concerned, both parties have to agree to disperse the funds and there should be a termination/default clause in the contract. If it is a large builder, like Ryan Homes etc etc, they will most likely return your money if you bug them because they typically don't want to deal with the headache of you tying up the property over a few thousand bucks. I've had a handful of clients that have backed out of a new construction contract without contingencies to fall back on and in all cases, since they were large companies, the EMD was returned. In one case, I was shocked that they gave the client's money back.
Happy to chat, PM me. Good Luck!
@Caroline S. I sent you a PM with my phone number...PP won't allow posting phone numbers on forum posts.
@Caroline S. - Have you tried talking to the builder asking to back out of the contract? He\She will be able to tell you whether that is an an option without losing any money even before contacting an attorney. If they say no then I would suggest having an attorney involved. The contract itself should state whether the earnest money is refundable or not.
Builders contracts typically highly favor the builder. Id say there is a 99.99% chance that the money youve already given them is a sunk cost, and there is a pretty good chance they are due the remainder of the $10k. If you used an agent on the purchase, they may have more leverage as their are some subtle threats they can make, but if you didnt use an agent, you wont have that leverage. I was able to get myself out of a new construction contract and get my EMD back, but being an agent, I had more leverage than you would generally be able to apply.
Have prices in Fredericksburg VA gone up significantly since you first signed the contract as they have in many other markets? If they have, then the builders may be thrilled to have you back out of the contract ...
@Russell Brazil I would say she can get it back... unless it says non refundable specifically.. at least that's who it would be here .. we have the Courtney clause in our deals.. we as builder think your bugging us to much we can cancel and give you your EM back plus 500.00 out of our pocket for your troubles.. I have all buyers sign that.. some folks you just want to cut lose if they are too much trouble during the process.
What was the outcome Caroline ?