Homebuilders are facing a huge burden because the cost of materials has escalated dramatically. Plywood, steel, aluminum and asphalt are all going way up in price. So, builders have come up with an idea in new home contracts that you may not know about. Let’s say you are buying a home for $200,000. When you get to closing, they spring it on you that you actually owe $235,000. They’ll cite a clause in a hidden subsection of the contract that gives the builder the right to pass on to you any materials costs above the expected total. It’s called an “escalation clause,” and it’s something many builders are adding to their contracts. According to the LA Times, the No. 1 request coming into the National Association of Homebuilders is for language to use in contracts for escalation clauses. This is why you should NEVER EVER sign a builder’s contract! They are very one-sided and you cannot control the outcome. And, don’t ever negotiate with a builder’s representative without have an agent working for you. Be prepared to negotiate a cap for what you agree to pay. If it goes beyond a certain amount you get your money back and can walk away. Having a construction attorney review the contract for you is smart, too.