New home builder just "halted building" in community. What are my rights? (Phoenix: real estate, to rent)

[OctoberMoon]

Hello. My husband and I are buying a new home in the Laveen area off of Baseline. We're moving from Calfornia. We signed our contract in August and were told the home would be done in February. We put $2,000 down in earnest money, did the whole design center thing, and waited to hear about coming down for the meeting with our construction person.

We waited...and waited....and waited some more. We heard nothing. A week or so ago we traveled to Phoenix for a wedding and decided to stop by and speak to our realtor. When we did, he told us developments up and down Baseline had "halted building" due to high inventory and people walking away from deals left and right. So we talked a little bit and he said they were reviewing each contract carefully to see if it's a risk to them to start building or not. Now, we have good credit and 20% to put down, and we were TOLD our loan had been approved. Yet, he is telling us they will not start buolding yet and asked if we'd be willing to put down more earnest money to show good faith and that we won't walk away!

He also said they will not resume construction (they haven't even STARTED on our home, it's still an empty lot) until at least the beginning of next year and maybe later, and it takes 5 months to complete the home. We need to be living in Arizona by March so this is very inconvient for us because now we will have to rent. Our home was supposed to be done by February!

My question is, what are my rights in this situation and do I have any? I wish we could just walk away at this point because it's just absurd that they are asking for more earnest money. I would much rather take my money and go to another builder...since I do not believe this "construction halt" is Laveen-wide like our builder claimed! My only issue is I don't want to lose the $2000 we already put down and I do love the home. I just want it built like we were promised!

[JasonS]

They told you they wont build your house but they will keep your money anyways?

Did you ask for your money back yet?

Instead of renting you can buy a spec home and move in within a month and you will get a better deal becuase they will give you more incentives to get rid of the sitting houses.

[MotleyCrew]

I have heard of other builders doing the same thing. The bad loans have thrown a wrench into the process. I would get my earnest money back and buy an inventory home. You might find that you are able to negotiate a better price on a home in the same development right now. Just a thought and I am sure the 20% down payment will give you even more leverage. Good luck and hope you find a home soon.

[Great Joy]

Octobermoon, wow, I feel for you. I would definitely get your $2000 back and walk away from that development. Even buying an inventory home in that development is not wise because it might take a long time for you to have neighbors because most likely homes and lots around that inventory home will sit empty. I would still come to AZ and rent to re-evaluate the area OR buy an inventory or resale home in another development near the area where you want to live. Best wishes and welcome soon to AZ!

[Bummer]

Sorry for your predicament, OctoberMom!

In spite of the fact you like this particular house, consider yourself super lucky you discovered this fiasco at such an early stage of the transaction. It definitely could have been much worse.

My suggestion would be to work on getting your $2k returned and move on. As others have suggested, find another home, preferably one already built or at least one further alone in the process where cancellation is less likely.

Who knows . . . you may be THE WINNER by finding a better deal on a better home

The inventory out there is HUGE and considering that fact, I am certain your builder is making a smart business decision regardless of your perception right now.

Good Luck

[Mathguy]

Yeah, just get your 2k back and buy an existing home.

Then be glad you can probably find a comparable home of tens of thousands of dollars less than it would have cost you to build the place you were after.

[Magnum Mike]

I'm with the rest here, avoid the hassles and get your $2,000 back then find a home somewhere else.

[mortimer]

Bummer advised:

> ... work on getting your $2k returned and move on. ...

Mr Bummer should have also said: "Do those things simultaneously."

There is a very high probability that whatever house you had in mind to buy - no matter how much you liked it is available elsewhere for TENS of thousands of dollars less now.

In the long run the $2k won't matter, but getting what you want for much less will pay off month after monthly mortgage payment.

[Jammie]

Originally Posted by Magnum Mike

I'm with the rest here, avoid the hassles and get your $2,000 back then find a home somewhere else.

I definitely agree with everyone else. If you can get your 2,000 back, take it and run. As disappointing as it is right now, it may just be a sign that there would be worse things to come with that deal. I'm shocked that they would ask you for MORE $$ and then tell YOU when they'll build your house. You are the one who is paying them.

Sorry for this bump in the road. Relocating is probably rough enough without something like this happening.

[LadmoFan]

The real estate agent should make sure you get your earnest money returned. The contract was broken by the builder so the money should be returned to you.

Contact a lawyer to see about getting your earnest deposit returned.

LF