Understanding Your New Home Sales Contract

Understanding Your New Home Sales Contract
  • Written on April 05, 2021 By Stanley Martin

Once you’ve found your perfect home, you’ll have to sign a series of documents to officially start the sales process. Your new home sales contract is an agreement between the builder, Stanley Martin, and the purchaser, you. It details important project dates, the base price of the home plus structural options, and the obligations of both parties. Here’s an outline of some additional items your contract will include:

  • Identification of the parties (the builder and the purchaser)
  • Contingencies or conditions that must be met before the sale can be finalized
  • The amount of earnest money deposit required
  • Estimated date of closing (estimated because actual closing dates may shift depending on certain factors)
  • Terms of possession (when the keys will be delivered from the builder to the buyer)

The terms in your contract are legally binding, so it is important that you understand everything before you sign. Here we’ve broken down some of the vital parts of the sales contract.

-Financing. Not only will your sales contract list the price of your home – which includes any structural options that you choose – it will also detail the type of financing you intend to use to cover the purchase of your home. If you are using a loan, you will need to speak with a loan officer to determine the best mortgage option for you.

- Inspections.Your home will go through a series of inspections throughout the building process. You will also have a few walkthrough meetings with the Neighborhood Construction Manager before closing. These inspections will ensure that your new home is built up to Stanley Martin as well as government standards.

- Important Dates.Your new home sales contract will include several dates to be mindful of, such as when to have your financing approved, when you will make your final design selections if you’re building a home and an estimated closing date. Construction delays or acts of God may occur, but that will not have any effects on your contract. If issues arise, we will work with you as best we can to address them and get you into your home. There are also dates to signify a cut-off period for changes. That means, after a certain stage in the construction process, you will not be allowed to make changes to the home. This ensures the construction timeline is not affected and we can build and get you into your new home on time.

- Closing Costs.It’s a common misconception that the down payment and closing costs are one in the same but that is not the case. Closing costs cover a variety of fees ranging from mortgage insurance to title fees. The loan estimate you receive from your lender will outline your closing costs. The closing costs and who’s responsible for paying them will be listed in the contract.

We spoke with some of our Neighborhood Sales Managers about the most asked about parts of the Stanley Martin contract and this what they had to say:

“The close date mentioned in the contract is an estimate. Even if there are delays in construction, we do not suggest hiring movers or canceling your lease until we give you a firm close date, about 60-90 days from closing.” – Jennifer Hendrix, Greenville Division

“Our Stanley Martin contracts are fixed price contracts – so even if construction costs increase, your home’s base price is locked in at time of contract. Also, Stanley Martin finances the build for you. You only have to provide a down payment to cover the base price, structural options and design upgrades. Unlike custom building, there are no construction loan draws, neighborhood dues, taxes or insurance during construction.” – Laura Lyons Karrh, Charleston Division

“No structural changes are allowed after the contract is submitted and you must pre-qualify within 10 days of signing the contract. You also have 21 days from the date of contract to complete all of your design selections.” – Ashley Bowers, Raleigh Division

“The benefit to buying new is that no one can outbid you, everything is new, and you have the opportunity to personalize the home. You will need to understand that flexibility may be required. Building is not an exact science and many things such as weather, county inspections and permits may be beyond a builder’s control.” – Michelle Lindsay, Northern Virginia Division

We hope this information helps you go to the sales table with confidence and ready to sign here and initial there… there and there. Visit StanleyMartin.com to get started today.