This new construction mistake flies completley under the radar
New home construction and renovation are some of the biggest trends in our market, so I thought you would find this story interesting.
I recently read a story about a man named Robert in the state of Washington who recently purchased a new townhouse. He closed on February 10th and the builder promised the certificate of occupancy would be signed by the city on February 11th.
It’s now mid-March and he is still not living in his new home.
What a nightmare!
Although the builder is paying for him to live in a short term rental, it’s not the same as your new home. Robert (and his fiancée) are feeling a lot of anxiety because they are also getting married in less than four months.
They desperately need this problem solved so they can focus on their big day in July.
Their biggest problem was the agent, the lender and the attorney all let him close without a certificate of occupancy.
These people should have had his back in this transaction. They let Robert down hard and he is the only one paying the price.
Many real estate professionals understand this is a big mistake, and would have stopped the sale in its tracks.
But, there is one misstep in new construction that happens every day and flies completely under the radar.
Most buyers do not find out about this until the closing table, when they are asked to sign a waiver of notice of completion.
It sounds harmful enough like all of the other documents that you sign at closing, but it has implications with lots of zeros at the end. Most buyers (and their agents) do not give it a second thought.
In Tennessee, this filing puts all contractors and subs “on notice” that the construction is complete and they have 10 days to file any claims against the home for unpaid work.
The notice of completion applies to new construction as well as homes that were recently renovated.
My best advice: If anyone asks you to sign something you don’t understand (especially this waiver), ask your attorney first and make sure you completely understand before signing.
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