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Old 10-01-2019, 01:17 PM
Status: "Hard Money Lender " (set 9 days ago)
 
242 posts, read 53,418 times
Reputation: 480

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Quote:
Originally Posted by emm74 View Post
Agree that the contract is almost surely builder friendly, and wouldn't allow the buyer to back out because of a delay. But I think that is also why some people are speculating that the builder has another buyer - one who is willing to pay a higher price - in the wings, and actually wants the deal to fall through. I'm not saying that is what is going on, but I think it's a least a more likely scenario than the idea that the builder gets houses under contract and builds them as part of a big scam to cheat a buyer out of their deposit.

Fingers cross that OP actually closed yesterday and maybe is busy moving today.....
Yeah, that thought is a non-starter.
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Old 10-01-2019, 04:16 PM
 
Location: North Idaho
23,250 posts, read 29,752,876 times
Reputation: 45760
Quote:
Originally Posted by emm74 View Post
, but I think it's a least a more likely scenario than the idea that the builder gets houses under contract and builds them as part of a big scam to cheat a buyer out of their deposit.

.........

I just closed on a new build where the builder needed to extend for over 2 weeks. No problem for me and everything went together OK. I just signed the extension.



However, in the time between signing the purchase contract and closing escrow, the value of the house went up about $30,000 and the price of the lots went up $15,000. Everyone having a house built has put down at least $30,000 deposit and maybe a lot more than that since it is a percentage of the finished price.


So, yes, an unethical builder could refuse to extend, keep $30,000 deposit, and sell for $30,000 more to a new buyer. That's a $60,000 gain.



If a builder did that, they would be shooting themselves in their own foot. Reputation is very important for home builders. Maybe a fly by night doing one or two houses wouldn't care, but most builders are doing 30-100 at a time and they can't afford to scare off all of those buyers or tick off all those real estate agents.


I don't know what happened to the OP. We haven't heard back, but it sounds like lawyer time to me.
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Old 10-02-2019, 04:51 AM
 
Location: NJ
11,140 posts, read 21,737,996 times
Reputation: 9530
Quote:
Originally Posted by oregonwoodsmoke View Post
I just closed on a new build where the builder needed to extend for over 2 weeks. No problem for me and everything went together OK. I just signed the extension.



However, in the time between signing the purchase contract and closing escrow, the value of the house went up about $30,000 and the price of the lots went up $15,000. Everyone having a house built has put down at least $30,000 deposit and maybe a lot more than that since it is a percentage of the finished price.


So, yes, an unethical builder could refuse to extend, keep $30,000 deposit, and sell for $30,000 more to a new buyer. That's a $60,000 gain.



If a builder did that, they would be shooting themselves in their own foot. Reputation is very important for home builders. Maybe a fly by night doing one or two houses wouldn't care, but most builders are doing 30-100 at a time and they can't afford to scare off all of those buyers or tick off all those real estate agents.


I don't know what happened to the OP. We haven't heard back, but it sounds like lawyer time to me.
I really hope he comes back but I'll be shocked if he does since he was a new member. He hasn't been here since the other day
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Old 10-02-2019, 09:34 AM
 
Location: Denver CO
21,664 posts, read 12,307,443 times
Reputation: 33220
Quote:
Originally Posted by oregonwoodsmoke View Post
I just closed on a new build where the builder needed to extend for over 2 weeks. No problem for me and everything went together OK. I just signed the extension.



However, in the time between signing the purchase contract and closing escrow, the value of the house went up about $30,000 and the price of the lots went up $15,000. Everyone having a house built has put down at least $30,000 deposit and maybe a lot more than that since it is a percentage of the finished price.


So, yes, an unethical builder could refuse to extend, keep $30,000 deposit, and sell for $30,000 more to a new buyer. That's a $60,000 gain.



If a builder did that, they would be shooting themselves in their own foot. Reputation is very important for home builders. Maybe a fly by night doing one or two houses wouldn't care, but most builders are doing 30-100 at a time and they can't afford to scare off all of those buyers or tick off all those real estate agents.


I don't know what happened to the OP. We haven't heard back, but it sounds like lawyer time to me.
Yes, I understand that it could happen, but I don't think it's realistic that it *would* happen, and that a builder would trash their reputation like that. Not if they planned to stay in business, anyway.

I wonder how often the value increases like that, between signing the contract for new construct and closing. My soon to be 5 year old new build was appraised at about 5% above my purchase price but as I mentioned up thread, the builder (large tract builder) was very cooperative in making sure we closed including paying for a mortgage lock extension when we couldn't close on time due to construction delays, and ultimately, an issue with getting the final appraisal done on time because appraisers were so busy at the time plus it was right around Thanksgiving.
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Old 10-02-2019, 04:40 PM
 
8 posts, read 2,760 times
Reputation: 20
So to update everyone. We have hired an Attorney. The Builder and list agent would not extend the closing even when each Broker was involved talking to each other because the List agent said the Appraiser told her that it was turned in Friday (Which is not true since we have email documentation that it was sent and received Sept. 30th at 4:50 PM with conditions and subject to on the appraisal . It reads in the contract "Seller shall have no liabilities in construction caused by strikes, Acts of God or Nature, or if any change orders by the buyer. In the Event of such delays, the closing date may be extended by the delayed days not to exceed 30 days. Seller should notify buyer of any such delays". (We never received any notifications and they delayed the completion date by 8 days). What really upsets me was the day after closing date the list agent texted my Realtor and said "Good Morning. If buyers are still wanting the house, they need to get with our preferred lender". How low and unethical can you be.
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Old 10-03-2019, 12:28 PM
 
8 posts, read 2,760 times
Reputation: 20
Quote:
Originally Posted by Spokaneinvestor View Post
True, there is the ability to sue for specific performance in the standard PSA if a SELLER doesn’t close on time. However, in this case, the BUYER was going to miss their date so the builder had two options. One is to extend the contract, the other is to declare the deal dead. S

One might argue that the builder was the source of the delay, but without any additional facts, it looks like the buyer is the party that missed their date. The reason they missed their date isn’t clear from the facts presented but it looks like a lender or appraisal problem. I think it would be problematic and expensive to sue for specific performance when the BUYER wasn’t ready to close. The builder evidently has a home ready to go on the day of closing. The BUYER can’t perform because their loan is held up for whatever reason.

I don’t think they are going to get very with that line of attack on a specific performance claim. All the builder has to say is “I was at the closing table ready to close and buyer’s didn’t perform”. Done.
The Lender asked to order the preliminary Appraisal on Sept 10th and the list agent did not respond. Sept. 17th the day after the house was suppose to be complete the lender said again Are we ready for the initial appraisal?. List agent responds with We are still lacking a few things, so not sure if you need to do a two step? We are lacking the plumbing, flooring, yard driveway heat and air. Lender Responds On new builds, we typically order a preliminary appraisal and then a final. Please let us know when you’re ready for the preliminary appraisal. List agent responds We should be ready by next Tuesday (Sept. 24th) to order the appraisal. Appraiser comes out on Tuesday Sept. 24th. List agent says they will not extend because they talked to the appraiser on the phone and it was sent in Sept. 27th. Which is not correct since it was sent in on Monday Sept. 30th and have documentation of when it was sent (I talked to the Appraiser on Friday and he said there were 6 in front of me to get back and was pushing it through to get it back on Monday). The Appraisal had revisions that were taken care of by today and we signed the CD showing we would be ready to close this coming up Monday October 7th (Since the CD has to be signed 3 days prior to closing by law). If the List agent would have let us do the appraisal when we first asked and the builder didn't have an 8 day delay from the substantial completion date then we would have been able to close on the 30th. We have even went back to the Builder and they said Flat out NO unless we use their preferred lender when we have the clear to close.....
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Old 10-03-2019, 12:32 PM
Status: "Hard Money Lender " (set 9 days ago)
 
242 posts, read 53,418 times
Reputation: 480
Quote:
Originally Posted by TruthSeeker123 View Post
The Lender asked to order the preliminary Appraisal on Sept 10th and the list agent did not respond. Sept. 17th the day after the house was suppose to be complete the lender said again Are we ready for the initial appraisal?. List agent responds with We are still lacking a few things, so not sure if you need to do a two step? We are lacking the plumbing, flooring, yard driveway heat and air. Lender Responds On new builds, we typically order a preliminary appraisal and then a final. Please let us know when you’re ready for the preliminary appraisal. List agent responds We should be ready by next Tuesday (Sept. 24th) to order the appraisal. Appraiser comes out on Tuesday Sept. 24th. List agent says they will not extend because they talked to the appraiser on the phone and it was sent in Sept. 27th. Which is not correct since it was sent in on Monday Sept. 30th and have documentation of when it was sent (I talked to the Appraiser on Friday and he said there were 6 in front of me to get back and was pushing it through to get it back on Monday). The Appraisal had revisions that were taken care of by today and we signed the CD showing we would be ready to close this coming up Monday October 7th (Since the CD has to be signed 3 days prior to closing by law). If the List agent would have let us do the appraisal when we first asked and the builder didn't have an 8 day delay from the substantial completion date then we would have been able to close on the 30th. We have even went back to the Builder and they said Flat out NO unless we use their preferred lender when we have the clear to close.....
Interesting .. what does the attorney you hired think? A second, maybe moot question, is “Do you want to buy from a builder that does this?”. Seems like any builder warranty issues might be a rodeo to resolve too.
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Old 10-03-2019, 12:58 PM
 
Location: Denver CO
21,664 posts, read 12,307,443 times
Reputation: 33220
I'm not sure it's so awful that the want you to use their lender - while their delays were a contributing factor, the bottom line was that your lender couldn't close the deal. If they are saying they still want this deal to happen, then it means there is no funny business with another buyer or anything like that, they just want to go with a lender that they are confident can close on this and do it quickly. You can always a do a re-fi later on if it's warranted
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Old 10-03-2019, 04:16 PM
 
8 posts, read 2,760 times
Reputation: 20
Quote:
Originally Posted by Spokaneinvestor View Post
Interesting .. what does the attorney you hired think? A second, maybe moot question, is “Do you want to buy from a builder that does this?”. Seems like any builder warranty issues might be a rodeo to resolve too.
He thinks that the builder breached the contract. When no notification was given for the 8 day delay (When it says notification from seller to buyer of such delays) and also the email correspondence with us asking to do a preliminary appraisal on Sept 10th with no response and the again on the 17th of September when the mortgage officer once again said On new builds, we typically order a preliminary appraisal and then a final. Please let us know when you’re ready for the preliminary appraisal with the list agent response of We should be ready by next Tuesday (Sept. 24th) to order the appraisal. We are completely done with wanting to buy the house with how we have been lied to by the list agent
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Old 10-03-2019, 04:24 PM
 
8 posts, read 2,760 times
Reputation: 20
Quote:
Originally Posted by emm74 View Post
I'm not sure it's so awful that the want you to use their lender - while their delays were a contributing factor, the bottom line was that your lender couldn't close the deal. If they are saying they still want this deal to happen, then it means there is no funny business with another buyer or anything like that, they just want to go with a lender that they are confident can close on this and do it quickly. You can always a do a re-fi later on if it's warranted
Why would we use their preferred lender when if the list agent would have let us do our preliminary Appraisal like we asked on the 10th and the 17th we would have closed on the 30th but no she said" We should be ready by next Tuesday (Sept. 24th) to order the appraisal." It's hard to close a deal when the list agent wouldn't allow the appraisal to happen until the 24th. We already have the Clear to Close, CD signed, and everything through underwriting and switching lenders would delay the closing even farther because they would have to order another appraisal by the new lending company, send out a new CD, and go through their underwriting delaying the closing farther out than this Monday.
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