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Construction Docs: Contracts

Ask for a copy of the contract that will be used should you decide to purchase. Read it carefully when it is blank and read it again when it is filled out with the specifics regarding your agreement before signing it. This is the time to ask any questions that you have, and make certain you thoroughly understand the contract. If you have a problem in the future the contract is the document everyone will refer to. Make sure your questions are answered before signing the contract.

If you have specific issues or situations that concern you ask if and where the contract addresses those issues.

Be sure to understand the management of monies that are directed by the contract.

When you sign a contract to build a house it should indicate the design of the house (the blue prints, plans or model type) and the specifics of house (the "specs"). The "specs" will itemize, for example, an appliance allowance or specific appliances (type, brand, size) that will be installed and major construction factors. Often these documents will be indicated in the contract by a phrase such as: "..this document with all attachments (plans, specs, warranties and, if agreed, any additional addenda) constitute the entire contractual agreement between builder and buyer."

Contracts are changed by either crossing out certain areas, with the words remaining visible underneath the lines or by adding additional pages called addenda. You can expect to be asked to initial every page of the contract, any alterations and all attachments. You should receive a copy of the signed contract.

Change Orders: Change orders are agreements between the builder and buyer that alter the plans or "specs" of the house during construction. They should detail the change, the total cost of the change, delay of time due to the change and the terms of payment. The parties who signed the original contract, because they are, in effect, changing the original contractual agreement should sign change orders.

It is customary that change order expenses be collected at the time of request and not "rolled" into the final amount paid at closing.




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