New Home Construction

Scenario:  A consumer who bought a new home construction several months ago and now either doesn’t want the home or has had an appraisal and found the house did not appraise for the purchase price.

• This involves contractual issues. Consumers should review the contract to determine their options, and seek legal advice if necessary.
• Under certain circumstances, the developer may cancel the contract; however, it is at their discretion. If an emergent situation has occurred, speak with the developer and/or seek legal advice.
• Earnest money may be refunded based on the terms of the contract. In some contracts, the buyer acknowledges the earnest money is being held by the developer, not in a trust account. The Department has no jurisdiction over earnest money disputes.
• Consumers that visit a new home development without a representative may return with a representative; however, the representative may not receive a commission. Consumers may be represented by an Arizona real estate licensee after visiting a new home development after accepting representation from a new home developer, but the licensee may not be able to collect commission.
• Consumers that visit a new home development without a representative and continue with the contract without a representative are NOT being represented by the developer’s agent. A dual agency situation does not exist in this situation.