Financial Channel

I am going to be purchasing a house built by a small builder, ie it's his "side" business. Where on the agreement would you put the 45-day hold back? Is it on the offer to purchase or on the purchase agreement? I am afraid that the builder will not complete the house in the 45 days to close that he wants because he is short of money. The house is being sold at about $20,000 under market due to this need.

Right now, the plumbing isn't hooked up (and the dishwasher hookup only has a T-barb and no water shutoff), the electrical isn't done (and no AC hookup to the dishwasher), most of the flooring isn't done, the driveway hasn't been poured, the veranda is incomplete and final paint needs to be done. They have a permit to construct an uncovered deck as well. I think a 15% holdback (about $50,000) held for 45 days after completion would be fair.

So, would this be a standard condition on the purchase agreement or a condition in the offer to purchase?

Stick it in the "Buyer's Conditions" part of the standard real estate contract.

You mean the Purchase Agreement? (after he accepts the offer of full list price )

Well no, I don't know how it works over there, but here you write out an offer on a standard contract and enclose a $5000 deposit. If the seller accepts your offer, that offer becomes a binding contract. Once accepted you can't change the terms, its too late.

If he's short of money, how is he going to complete your home? I would make sure any holdbacks exceed the true cost to complete.