Is binding arbitration a standard clause in the sales contract of a new home? (fees, accept)

[andymit99]

I will sign the sales contract for a new home in several days. The seller emailed me the sales contract and I went over it and did not find anything special. And then I found this website: hobb.org - homeowners for better building. It suggests that home buyers should not agree on mandatory binding arbitration in the sales contract.

I went back to the sales contract and found that the binding arbitration is included in the contract. I am not sure if this is a standard deal for a new home sales contract. If not, should I ask the seller to take this clause off the contract when I sign it?

[mojo_1979]

Pay the $$ to have a real estate attorny look over the contracts before you sign anything. And yes, especially in this market, tell your attorney to have that part of the contract removed.

[WhoFanMe]

In Maine, mediation is in the standard Purchase and Sale Agreement and not binding arbitration. There is a big difference.

[momof2dfw]

Originally Posted by mojo_1979

Pay the $$ to have a real estate attorny look over the contracts before you sign anything. And yes, especially in this market, tell your attorney to have that part of the contract removed.

Yes, it is standard practice and has been for YEARS that arbitration is the only way to settle a dispute w/ a builder.

Attorneys WROTE the contracts that are used and in some cases the state "approved" Real Estate Contract is by the book and not much of it can be changed. If you scratch this clause from a contract w/ a builder they won't take it. In most cases it is also in some sort of state legislation that covers arbitration and no other remedy. Paying a real estate attorney to look over something that they in reality can not change is a waste of money. Trust me, even our corporate attorney goes "scratch crazy" whenever we give him contracts to look over and all it does is upset and t/o the other party to where they just flat out do not want to deal with you. We have to tell the attorneys to keep it real and not get too excited w/ their pen.

[Silverfall]

In Oregon our dispute resolution clause is
1) small claims court for disputes under $7500
2) mediation
3) binding arbitration

The concern with binding arbitration is that, at least here in Oregon, there are limited appeals. So pretty much what the arbitrator says, goes. Bear in mind that it will cost you a good, $15,000-$20,000 in attorney fees to even get to arbitration.

I agree with mom, that if you remove that portion, the builder will most likely not accept your offer. Welcome to try, but his attorney will be advising him to not sign anything that changes that. Stalemate...