The Real Estate Encyclopedia
What Is Involved In Buying From A Builder Rather Than A Private Entity?
Category - Home Buying Questions - Search & Offer FAQ's

The first thing to be asked is whether the builder is acting as an individual or as an entity.  Most builders are incorporated and the property is being bought from the corporation, even if the builder is the sole stockholder of the corporation.  If the corporation owns the property, the board of directors of the corporation should adopt a resolution authorizing the sale of the property and this resolution should be attached to the contract.  Or, the builder may have a partner and may be acting as a partnership.  If a limited partnership exists, there is usually one general partner and a number of limited partners.  The limited partners have limited liability.  If a general partnership exists, one partner may bind all other partners in a sales contract. 

 

Most builders have their attorneys draft their contracts.  Needless to say, the contract is designed to protect the builder and the buyer should be sure to carefully read the agreement and ask any questions he/she may have.  The broker representing the buyer will be very helpful in guiding the buyer through the terms of the contract, thus protecting the buyer.  Although most subdivisions have real estate staff on site, the buyer should remember that the on-site staff represents the builder and it is advisable that the buyer insist on bringing his/her broker to the table.  In most cases, when a buyer visits a subdivision sales office for the first time, the buyer will be asked to sign a guest book, indicating whether he/she is working with a Realtor.  This is the time the buyer should provide the name of the broker who will handle the transaction on his/her behalf.

 
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Home Buying Questions - Search & Offer FAQ's
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