Sales & Purchase Agreement

Question 1

Line 1: Arbor Homes

Answer 1

Line 1 I just am going to read off all your information again, so please make sure it’s all correct. Your new address will be at ______ and by purchasing lot ______ you will be living in the subdivision ______ located in ______ county. We are building you the ______ floorplan.

Question 2

Line 2: Purchase Price

Answer 2

Line 2 highlights all the pricing. The base price, total options price, and lot premium are as listed. The only thing that is locked today is the base price and the lot premium. The options can be subject to change for no additional fees up until your design center appointment. After your design center appointment, you will be charged a $1,000 fee plus the cost of the option if you want to add anything. The $500 earnest money that you deposit today will go toward the purchase price of the home. By using our preferred lender you will receive $2,500 toward the closing costs on your home. The TBD will change to $7,000 if you do not use a preferred lender

Arbor $2,500-$7,500
Arbor $1,000 fee
Arbor $500 minimum build at contract

Question 3

Line 3: Financing

Answer 3

You’re going to be financing this home, You aren’t handing me $300,000 in cash. You have 21 days to get an updated preapproval before we can move forward to your design center appointment.
Additionally there will be an appraisal on the home at some point. If the home appraises less than the purchase price of the home, you could be responsible for appeasing this appraisal gap by either paying the difference or reducing the option in the home. However, if you are using a government loan such as an FHA or VA loan, you are protected from an appraisal gap. In this instance you could back out of the agreement and be refunded, or you can reduce options or pay cash to appease the gap.

Question 4

Line 4: Buyer Selections

Doesn’t pertain to inventory homes.

Answer 4

The main thing in this line that it will cost you $1,000 plus the cost of the change if you make any change orders after your design center appointment. So please try to have all your final selections made after this appointment has concluded. Not to worry, you still have a few weeks to narrow this down.

Arbor $1,000

Question 5

Line 5: Requirements to Proceed

Answer 5

This states that Arbor Homes cannot move forward until we have the following…
Entire Earnest Money
A mortgage loan commitment
A complete selection sheet
Buyer’s approval of the plans by signing this contract

Question 6

Line 6: Promotional Displays

Answer 6

You don’t get all the stuff that’s in the model. You understand that you must purchase furniture, fencing, tvs, etc on your own.

Question 7

Line 7: Completion

Answer 7

The completion date is a good faith estimate. We will be working as quickly as we can to complete the construction of your home. This is a desire date not a guaranteed date.

Question 8

Line 8: Closing

Answer 8

Closing is a very exciting and amazing experience. Please make sure you can be there on the date your closing is agreed upon.
You’ll be notified roughly 30 days before closing. If you fail to close at the agreed date, then can we can chase a $150 fine per day up until the day you close. It’s important to close on time.

Question 9

Line 9: Title Insurance

Answer 9

You will be given free and clear title to the property.

Question 10

Line 10: Real Estate Taxes

Answer 10

You will have to pay property taxes once you close on the home. For the first year you will pay taxes on the lot, and then starting the following year, you will pay taxes on the home and lot. Property taxes in Montgomery County are 1.75% and are already incorporated into the cost of the loan.

Question 11

Line 11: Association Fees

Answer 11

By signing this you will now be apart of the Homeowner’s Association & be subject to the obligations thereof. You will be charged an annual fee of $— that you will pay monthly. You will also have to pay a one time start up fee of $—.

Question 12

Line 12: Site

Answer 12

You acknowledge the lot that you are purchasing lot # —-. Apparently in the past someone got confused on what lot they agreed to purchase so this is why this line needs to be here. Also good news, if Arbor Homes needs to do anything to the land that costs them extra money to build your home - we don’t make you pay it like some other builders may!”

Question 13

Line 13: Substitutions & Modifications

Answer 13

This line basically states if we need to change brands of cabinets, faucets, etc., we are able to do so as long as it is of equivalent or greater value. We recently had to change faucet companies to Delta faucet.

Question 14

Line 14: Casualty Before Closing

Answer 14

It is our house until the day of closing. If anything happens, it is our problem.
If 20% or more damage is done to the homesite before closing, you have the option to back out.
If 50% or more damage is done to the homesite before closing then we have the option to back out.

Question 15

Line 15: Pre-Closing Inspection

Answer 15

You will have a one time formal pre-closing inspection with our community superintendent. At this appointment you will be able to point out any last second defects or incomplete work.

Question 16

Line 16: Default By Buyer

Answer 16

If you decide that you no longer want to build an Arbor Home after signing this agreement we will keep your earnest money and any other amounts you’ve previously paid. We don’t always chase additional funds but we do have the right to do so. For instance we could chase a $3,000 fine if you back out before the slab is poured. If the slab is done it could be $5,000, and if the home is complete it could be $10,000 or more before closing.

Question 17

Line 17: Default By Seller

Answer 17

I doubt see this happening with you guys because you guys seem great to work with and I’m really excited to move forward. However, we do have the right to back out of this contract if we see fit. This only ever happens if the buyer is being extremely hard to work with.

Question 18

Line 18: Arbitration of Disputes

Answer 18

In the unlikely event that something needs to be settled by a third party, this guides you on how to hire an arbitrator.

Question 19

Line 19: Homeowner’s Warranty

Answer 19

You’ll be given a copy of the Residential Warranty Corporation’s (RWC) insurance/warranty booklet. This goes over the warranties that come with the house. In short you will receive 10 years on the structure of the home, 4 years on the workmanship of the roof, 2 years mechanical, & 1 year on the overall workmanship on the home. The bold text summarizes if it isn’t in writing than it is not true.

Question 20

Line 20: Credit Report

Answer 20

You give us permission to exchange info with a lender.

Question 21

Line 21: Dangerous Conditions, Construction Work

Answer 21

I’m sure that you will be very excited that you just bought a brand new home, and will want to go view the homesite multiple times before you actually close. Please just keep in mind that this is a construction site and we are not liable for any accidents that may happen on the homesite. Please be careful!

Question 22

Line 22: Seller’s Representations

Answer 22

You’re excited to move forward! I didn’t twist your arm to sign this contract.

Question 23

Line 23: Special Provisions

Answer 23

We own the blueprints, you cannot sell them.

Question 24

Line 24: Successors & Assigns

Answer 24

We can assign this contract to Clayton Properties. We are owned by Clayton Properties which is owned by Berkshire Hathaway.

Question 25

Line 25: Discretion of Seller

Answer 25

If we do in fact back out of this contract for reasons we’ve spoke of in prior line items, we will refund all earnest money plus an additional 6%.

Question 26

Line 26: Entire Agreement

Answer 26

You agree to everything in this contract.

Question 27

Line 27: Manufacturer’s & Supplier’s Warranties

Answer 27

This basically just says that your warranties start once you close on your home.

Question 28

Line 28: Governing Law

Answer 28

This agreement is governed and interpreted under the laws of the state of Indiana.

Question 29

Line 29: Force Majeure

Answer 29

This is the act of God clause for lack of a better term. For example, if the government tells us we can no longer sell houses anymore, we can back out of this contract.

Question 30

Line 30: Attorney Fees

Answer 30

This goes over attorney fees if any issue arises that needs the attention of a third party.

Question 31

Line 31: BAGI - Builder’s Association of Greater Indianapolis of Greater Indianpolis Quality Assurance Standards

Answer 31

We build at or above BAGI standards. BAGI stands for Builder’s Association of Greater Indianapolis of Greater Indianapolis Quality Assurance Standards. I’ll also email you a booklet that goes over this as well. This is a standard that not all new home builders abide by. We ensure that we build you a quality home by following these guidelines.

Question 32

Line 32: BAGI Mold Clause

Answer 32

Mold is naturally occuring where moisture is present for an extended amount of time, and we do our best to keep it out during the building process. It is your responsibility to keep mold out of your home once you close.

Question 33

Line 33: Execution of Agreement & Receipt of Documents

Answer 33

This shows all the documents included that you’ll be given.