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Since late September, my wife and I have have been talking with a new home builder in Corpus Christi, TX to build us a house there. At the end of November (just two weeks ago), we signed an earnest contract with them to build us a house for an agreed upon price of $237K. We put down $500 in earnest money, and $3000 towards NRAP (non-refundable advance deposit for customizations we had selected).
Our sales counselor presented the contract and all its details to her supervisors the following day, and they apparently accepted it. Then, unbeknownst to us, our sales counselor decided to end her employment with the builder. So we were assigned a new sales counselor this past weekend.
This newly assigned sales counselor took a look at our contract, and concluded that the former counselor failed to add some items to the budget because of her inexperience. So she told us yesterday that the new price of our house would be $246.4K, or $9,400 more!!! This is after we signed the earnest contract with them, and left them $3500 as our guarantee.
Can they actually do this at this point? We signed the earnest contract based on the understanding that the price of the house would be $237K, not $246.6K. Can they simply just change the price like this now???
If you had a contract I doubt they could change the price. I would want to talk to her manager and press the issue. You could also consult an attorney for an opinion.
Builders are desperate for business, push the issue. You might tell them you want to walk on the deal if they don't live up to the original price. Take your money & run if needed.
Generally speaking, it is unlikely it is legal. However, it really depends on the terms of the contract. It is best to consult a contract attorney in your area to determine your options.
Keep in mind...if you press the issue and the builder is obligated to honor the original pricing, you may end up with a house with problems. Sometimes, it's better to get your money back and just walk away than try to force an unethical person to do the right thing.
Keep in mind...if you press the issue and the builder is obligated to honor the original pricing, you may end up with a house with problems. Sometimes, it's better to get your money back and just walk away than try to force an unethical person to do the right thing.
And if they are unethical in the beginning, you can imagine what they may do to you once the house is being built or completed.
Personally, it amazes me that anyone would sign a contract on a new home without an attorney. I know it is done but frankly I would never do that. I agree you need to consult an attorney. If any of the documents you signed allow for price adjustments by the builder (and why wouldn't they since the forms are made up by the builder), then you may have no choice. Look the documents over carefully and see if there is a clause that allows this. Then definitely consult and attorney. Nearly $10,000 is a lot of money for them to add to the house price no matter whose fault it is. Jay
Personally, it amazes me that anyone would sign a contract on a new home without an attorney.
I am with you on this. A simple review of a contract and explanation of your and the builder's rights and remedies does not cost a lot of money considering the alternative.
Thanks for your advice and wisdom about the issue. We will continue our discussion with the builder to see what happens. This builder has an A+ rating at the Better Business Bureau, and everyone we have talked to about the builder seems generally happy. And they are very big, and have been around for many years. So we are hoping this is just some idiocy that has slipped through the cracks. Nonetheless, the advice about getting a contract attorney to look over the contract seems wise and justified so we will look into that. Thanks again!
It's well worth the money to have an attorney review the contract subsequent documents before you sign for such an important and financially large purchase.
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