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Author Topic: Question about purchase of new home  (Read 1338 times)

lp4law

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Question about purchase of new home
« on: August 14, 2005, 01:53:40 AM »
I've been looking at a new development in Camarillo, CA. I just got the call on Friday telling me the next phase has been released, and I have to come in and sign the purchase agreement for my selected place on Sunday (8/14/05).  I asked to review the purchase agreement and CCRs over a month ago, and again on Friday after I got the call to come in and sign, but they keep telling me it's their "policy" not to give out the purchase agreement, even for review, until the time of my signing appointment.  They then state that I "shouldn't worry," because I have 3 days to rescind after the date of signing.

After taking a year of contracts, it seems bizarre to me that they would have such a policy. Their policy blatantly deprives me of any opportunity to have an attorney review this document or recommend changes prior to my signing it.  In fact, it doesn't even give me a reasonable amount of time to sit down by myself, read through it, and evaluate all of the provisions prior to having to either sign it or lose the place to someone else walking in an hour later.  Further, it presumes that three days is enough time to find a good attorney, set up an appointment, have him/her thoroughly review the agreement, consult with me in person, and allow me reasonable time to consider all the facts and make an informed decision as to whether I should rescind.  Without going into a bunch of enforceability defense theory, their policy seems to unnecessarily compromise their ability to enforce their own agreement against me. 

This is the second builder (out of two) I've met who has such a policy.  Anybody know if this type of policy is commonplace (i.e. "industry custom")?  Or are these developers not really serious about enforcing these kinds of agreements against a disputing purchaser?  Maybe they just assume most people aren't familiar with how to attack the enforceability of such an agreement.  Am I missing something here?
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Janna116

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Re: Question about purchase of new home
« Reply #1 on: August 14, 2005, 03:47:34 AM »
Maybe I'm trying to oversimplify this but if you are so worried about the contract don't wait until after you sign it to find an attorny find one before, let them know what is going on, get their opinion on what the builder is doing and then have them review the contract when it is ready.  You've known for a month that you were going to get a contract.  But as to this transaction, even if you only have three days that should be three business days(I'm assuming) so you have until Wednesday and I don't know what kind of a town you live in but I imagine there are a number of law firms and lawyers and if you call enough of them on Monday then I'm sure you can find one who will meet with you on Tuesday. 

I worked for a solo practitioner this summer and he would get calls from people who wanted to sit for a consulation all the time.  He was often able to set a meeting for the next day.  It's not a lot of time but I think you'll be able to find someone.

This is a purchase contract.  I've never bought a house, but I have sold one and most stuff is boiler plate/ non-negotiable, aside from the price.  Unless they are going to build you your dream home and draw up architectural plans to your specifications down to the Redding Pipes, I imagine this is a pretty stock contract.  You'll go through picking plan A for the floor plan, package A for the lighting fixtures, package C for the cabinetry and package B for the Appliances.  You'll upgrade the carpet and pick out your exterior paint colors and then they'll add up the price.  (You may not get to pick all of those things but you get the idea.)

I too have had one year of contracts and in my internship I often "found" things that didn't seem right all summer and my boss would explain things to me and then I'd see they weren't as shady as I thought they were.  Law school has taught us to be skeptical and suspicios and maybe that is helpful in practice but it doesn't seem to be helping out in your life right now.

Go to the signing and check it out and let us know how it turned out.  Good luck with the house purchase anyway.  I wish I could afford a house now.  Ahhh to dream...

Jen

 
It is never too late to be what you might have been. - George Eliot

rezipsa

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Re: Question about purchase of new home
« Reply #2 on: August 15, 2005, 12:37:57 PM »
First off, congrats on getting an opportunity to puchase a new home in Camarillo (just curious - is it the development off 101?).  Who is the builder?

I just bought a new town home in Ventura and I had to go through the whole process of signing the purchase agreement.  After completing Contracts, I am skeptical on everything I sign.  During my appointment, I asked a lot of questions.  Most of the items in the agreement are boiler plate and cannot be modified even if you had an attorney.  Actually, the terms are there to protect you too.  For example, I will not lose my deposit if something happens and I cannot purchase the property at the close of escrow.  The only thing I would have like to change is the binding arbitration in case of a dispute.  On one hand, arbitration will reduce litigation costs but I do not like to give up my right to a trial.  However, I feel very comfortable with the developer.  They are very well respected and so far have been very responsive.  They sent us cookies! (for as much as we spent, they should have sent us booze!) 

They should give you a copy of the Conditional Subdivision Public Report if the development is a common interest development.


janna116 - Redding Pipe - good case citing!

lp4law

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Re: Question about purchase of new home
« Reply #3 on: August 15, 2005, 01:35:42 PM »
Hey guys, I appreciate the input.

Yeah, it's one of the townhomes right across from the 101 near the Pleasant Valley exit.  The builder is D.R Horton.  There will be a city-owned "sports park" positioned between the development and the 101.  My place is right on the edge of the park, which I suppose could be good or bad, depending on the park's layout.  I'll be going to the government center today to review their development plans for the park.

I signed for the place yesterday.  I have until Wednesday to rescind.  I'm still crunching the numbers and reading through the agreements and associated materials.  Since my current apartment in Ventura is a very nice 2-bed 2-bath for $1385/mo, it's tough to justify the numbers required to make the switch to a $560k townhome.  I'm not betting on the housing market kicking *ss the way it has over the past several years. 

On the upside, since I do a bunch of independant contractor product design work out of my residence, there are some good deductions and depreciations available there.  Also, the two additional rooms in the townhome are big enough to rent to professionals, and each have their own full bath.  So there are some contingency income and depretiation avenues there as well.  We'll see what my accountant has to say.

Although a "close of escrow contingency" is prefered, I don't think this agreement has one.  I'll have to finish reviewing it, and will certainly push for one if it isn't already there.

Thanks again for your info.
"What we do in life...echoes in eternity." -- Gladiator

rezipsa

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Re: Question about purchase of new home
« Reply #4 on: August 15, 2005, 05:52:05 PM »
I hear ya about the cost!  I am figuring that I am going to be able to write off about $50k in interest, taxes and other deductions.  I have almost cut my taxes in half.  I'm also renting in Ventura at $1700/mo.  I stayed up late after I signed my agreement thinking of how I was going to make it work.  With the right offs, it works for me.  Hopefully it works for you.  It is a great investment.

I was going to purchase one of those townhomes.  That is a very good area. With CSUCI close by, you souldn't have any problems.  Also check with the City of Camarillo for additional development planned in that area.  I seriously do not think that the housing market in this area is going to go down.  Within the next few years, the market may slow down but never lose money.

BTW what school do you attend?

lp4law

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Re: Question about purchase of new home
« Reply #5 on: August 16, 2005, 02:29:28 AM »
Hey rez,

Well today I read through the purchase agreement, and was pleased to find a loan contingency clause as well as a damages limitation clause which prevents the seller from doing anything beyond keeping my deposit ($16,600), even if I materailly breach the agreement right before closing.  That at least gives me several months to decide if I want all in, or I'm willing to dump the deposit and run.  The latter strategy would only be exercised if the housing market starts to take a nose dive.  But I think you're right about the strength of real estate in this area.

I also went to the Pleasant Valley Parks Department to see the planned adjacent park layout.   I'm pretty happy with what I saw.  I was concerned it would be more big venue stuff (e.g. stadium or large bleacher seating with concessions).  Instead, it'll just be a standard local park with four baseball diamonds and a bunch of soccer fields.  Parking is way across the field from my place too, so I should have a nice view.  Down the road, I think the park will help make my place even more attractive to people with children and dogs.

I'm a 3L in the evening program at Southwestern.  How about you?



I hear ya about the cost!  I am figuring that I am going to be able to write off about $50k in interest, taxes and other deductions.  I have almost cut my taxes in half.  I'm also renting in Ventura at $1700/mo.  I stayed up late after I signed my agreement thinking of how I was going to make it work.  With the right offs, it works for me.  Hopefully it works for you.  It is a great investment.

I was going to purchase one of those townhomes.  That is a very good area. With CSUCI close by, you souldn't have any problems.  Also check with the City of Camarillo for additional development planned in that area.  I seriously do not think that the housing market in this area is going to go down.  Within the next few years, the market may slow down but never lose money.

BTW what school do you attend?
"What we do in life...echoes in eternity." -- Gladiator

rezipsa

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Re: Question about purchase of new home
« Reply #6 on: August 16, 2005, 04:15:21 PM »
Hey rez,

Well today I read through the purchase agreement, and was pleased to find a loan contingency clause as well as a damages limitation clause which prevents the seller from doing anything beyond keeping my deposit ($16,600), even if I materailly breach the agreement right before closing.  That at least gives me several months to decide if I want all in, or I'm willing to dump the deposit and run.  The latter strategy would only be exercised if the housing market starts to take a nose dive.  But I think you're right about the strength of real estate in this area.

I also went to the Pleasant Valley Parks Department to see the planned adjacent park layout.   I'm pretty happy with what I saw.  I was concerned it would be more big venue stuff (e.g. stadium or large bleacher seating with concessions).  Instead, it'll just be a standard local park with four baseball diamonds and a bunch of soccer fields.  Parking is way across the field from my place too, so I should have a nice view.  Down the road, I think the park will help make my place even more attractive to people with children and dogs.

I'm a 3L in the evening program at Southwestern.  How about you?


Also check with the City of Camarillo for any new development in the Pleasant Valley Road/101 area (hint...).

$16,600 down - that is a lot of cheese burgers!

I am a 3L at VCL.

lp4law

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Re: Question about purchase of new home
« Reply #7 on: August 17, 2005, 02:53:31 PM »
Also check with the City of Camarillo for any new development in the Pleasant Valley Road/101 area (hint...).

$16,600 down - that is a lot of cheese burgers!

I am a 3L at VCL.
Quote

Is there something I should know about that area? 

I've been teetering over the past few days, but I think I'm gonna go for it.  It's steep, but worst case I can rent the two rooms out.  I really think it's a great unit in a great location.

Hey -- I was at VCL for the spring 2003 semester.  I took Intro to Law (Mark Packowikz?) and Juvenile Law.  Were you in my class?
"What we do in life...echoes in eternity." -- Gladiator

rezipsa

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Re: Question about purchase of new home
« Reply #8 on: August 17, 2005, 07:24:52 PM »
Quote

Is there something I should know about that area? 

I've been teetering over the past few days, but I think I'm gonna go for it.  It's steep, but worst case I can rent the two rooms out.  I really think it's a great unit in a great location.

Hey -- I was at VCL for the spring 2003 semester.  I took Intro to Law (Mark Packowikz?) and Juvenile Law.  Were you in my class?

Just check with the City of Camarillo...it's a good thing for property values.

Worst case is that you have to turn around and sell it within a year.  Even then you will make about $50k.  Not a bad investment.  Stick it out.  You don't want to doubt yourself later.

Which plan are you purchasing?

I started at VCL in the fall.  Most of the spring starters are still there.  Who do you remember from that class?

lp4law

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Re: Question about purchase of new home
« Reply #9 on: August 18, 2005, 02:38:37 AM »
Just check with the City of Camarillo...it's a good thing for property values.

So I take it it's not a strip club. :-X  I actually have a side business in the industrial area near that location.  Come to think of it, I did notice they're clearing the ground around there.

Which plan are you purchasing?

Mine is a plan 2, with the upstairs bed/bath instead of the bonus room.  I'll probably be renting the other two rooms out immediately, but I would have to find the right personalities for that.  I don't need any weird sh*t right now.  I want that place to be a sanctuary for all who live there.  It's actually the north-eastern-most unit in the complex.  It turns out there's just a wrought iron fence between me and the park, with a gate giving me direct access.  It should be pretty cool.  This should be a link to the plans:  http://www.drhorton.com/corp/GetCommunity.do?dv=W2&pr=41795

I started at VCL in the fall.  Most of the spring starters are still there.  Who do you remember from that class?

I remember a bunch of faces, but I barely remember my own name half the time.  I do still have an email in my archives from Joanna Camp.  She had sent me her notes for Juvi Law class one night.  Is she still around?  I also remember an older Philipino guy, and another older white guy who had been an exec in his company before retiring.  Also, there was a tall thin guy in his early 20's whose dad had a small firm.  Oh yeah, and there was a girl named Tonja McCoy.  Man, I remember a bunch of faces.  Unlike bigger schools, everyone was so friendly from the outset.  That was a really cool group.  Plus, school was right around the corner, and 1/4 the cost.

Also, I remember the Socratic method being way more difficult at VCL than Southwestern.  I think that's because it was more up-close and personal.  Also, Pachowicz would make us stand up when we briefed.  That really puts you on the spot, because you can't read from your computer screen.  He was awesome.  Is he still teaching there?

"What we do in life...echoes in eternity." -- Gladiator