Legal Question in Real Estate Law in Georgia

We are in the process of buying a lot and having a house built. We originally signed a reservation agreement to hold the lot and paid $10000 that will go toward the lot price. Since then we signed the lot purchase agreement in which was listed fees due to the HOA at closing (mailbox installation, architectural review, initial HOA fees). This week-end we met with the builder who included a 'developer's fee' which is 3.5% of the cost of the build of house. This was the first time we heard of this. We then contacted the realtor he said this fee broke down to 1.5% to him, 0.5% for advertising, 0.5% to the listing agent, and the rest back to the developer to cover infrastructure. He also said that this was a customary fee that everyone else in the neighborhood had paid. (At minimum I think it's crazy to think that as buyer's we should pay the seller's realtor.).

First of all, these fees seem to me to relate more to the lot purchase than the builder, but most importantly, these fees were never disclosed either in writing or verbally to us or our buying agent. We have told the realtor to talk to the developer and see what they say, but we will not pay this charge and will cancel the contract if necessary. (We are still within the 10 day window to back out).

Are we in danger of losing our earnest money? There are a few statements in the lot agreement that I take to mean we can get it back, but I realize they might try to hold it. I also feel that since they didn't disclose this fee, we are in a better position.


Asked on 4/26/10, 10:23 am

2 Answers from Attorneys

Scott Riddle Law Office of Scott B. Riddle, LLC

You start by referencing agreements. No one here has a copy so obviously you can't get an answer here. Take them to a lawyer if you are not clear about the agreement you made.

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Answered on 5/01/10, 10:47 am
Charles W. Field Charles W. Field, Attorney at Law

Consult with a local attorney. All the documents need to be reviewed.

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Answered on 5/01/10, 6:28 pm


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