Problem with home builder (Jackson: sales, real estate, mortgage)

[rolo07]

My husband and I signed a contract for a new home (to be built), which was contingent on our satisfaction with their mortgage company, as in order to receive the incentives (50% off upgrades), we had to use their mortgage company. Anyway, we were dissatisfied with the interest rate offered and in general with the customer service from the sales rep - multiple examples of poor customer service, miscommunication, and problems. Therefore, we decided to walk away from the contract and contacted our salesperson and realtor to let them know. That same day, our earnest money check was cashed (which I thought they could not do until we agreed to the financing, since our contract was contingent on that). No one called us to tell us that the check was cashed or to follow up with our message that we did not wish to move forward with the house until a few days later, basically after our realtor called the home builder since we were upset that the check was cashed. At this point I have written a letter to the builder explaining the situation and that I want to be reimbursed ASAP. I'm concerned this is going to be a battle and just wondering what other people's thoughts are on how to handle this. Should I get an attorney involved?

[SoccerMom811]

What specifically did your contract say about lender satisfaction? Did you have an interest rate written in your contract that indicates what you would be willing to pay?

I'm not sure I would worry about the fact that they cashed your earnest money check, they have a right to cash that as soon as you both have signed the purchase agreement. If you cannot get acceptable financing and your criteria for acceptable financing are spelled out in the contract then I'm sure they will refund your earnest money check. If you are using the builder I think you are using, they have a pretty good rep in the area.

[GoPadge]

Yes. Get a consultation with a real estate attorney as soon as possible. I guarantee you the builder will discuss the situation with his attorney.

[SatTerra]

Good luck with your dispute. We had a dispute concerning the results of our home inspection, and sought to have our earnest money returned. The builder said no, we sued them in small claims court and prevailed. I learned a good deal from that transaction, and I believe in the future I will seek out an attorney to review the contract before I sign in the future.

[rolo07]

Thank you for your replies. The contract was contingent on our satisfaction with NVR mortgage, and the interest rate/package offered. It was fairly vague, and did not include a specific interest rate or anything. The check was supposed to be held until we met with NVR mortgage and agreed to their financing. Apparently there was miscommunication between our sales rep and NVR. I very much wish I had an attorney review the contract before we signed anything. Anyone know of a good attorney in the Charlotte area?

[TracyLynnS]

I agree with the folks who said get a real estate attorney. In fact, many people consult a real estate attorney in addition to their real estate agent in any home buying/selling transaction.

I've bought 5 pieces of real estate and built 3 homes in the last 23 years. The last builder was so bad and everything went so wrong that we seriously considered letting them have our $20,000 earnest money and walking away. After deciding to keep the house and have it fall apart around us (it's only 4 years old) we would have been better off to lose the 20 grand.

Please research and find a good real estate attorney. I'm buying a home this year and will finally heed my own advice and get a lawyer. I'm sure it will be well worth it.

Good luck to you!
-Tracy

[movingsouthforgood]

Let me start of by saying this. I am in upper management wth NVR. We are a very large builder with deep pockets. So getting a attorney will not help in anyway. It will only cost you money. I know for a fact that your contract DOES NOT SAY anything about being happy with NVR Mortgage, no ones is ever happy with us our rates are high and we charge points. Your contract states this that if NVR Mortgae cannot get you approved you can use a outside lender. If we get you approved you are stuck with our rates and terms if you want to keep the 1/2 options and closing cost help. You are more then welcomed to not use NVR Mortgage and add back in your 1/2 options and closing cost help. We cannot force you to use any lender. It's your choice as a consumer. As a publicly traded company we have to watch out ofr your profit and we have a responsabilty to your share holders first and formost. I know it sucks as a consumer but we need to make sure we get numbers we hgive to Wall Street. I no longer believe in NVR business practices so after many years of service I am leaving them in the up coming months.

You need to speak with you sales manager and division manager and let them know that you either want your money back or wish to use a outside lender. They cannot afford for you to cancel your contract bottom line. Tell them that you know for a fact that they can let you go outside to seek a mortgage and keep all incentives or buy your rate down with NVR Mortgage with the builder should and can pay for " we do it all the time". If none of that works call NVR INC in Reston VA and ask to speak with Paul Sullvile he is the CEO of the whole Corp. Your division will react to that threat fast. So good luck and that will work

No Name

[maestrodmd]

NVR upper mgr correct. Speak with sales mgr/div mgr. They WILL let you use outside lender and keep options especially if NVR cannot provide fair financing. Having a house sit without a owner is not a good for the bottom line.

[CarolinaCruzes]

It does not matter how deep NVR's pockets are, if they are breaking the law. I would suggest contacting the following people.

President-Elect of National Assoc of Mortgage Brockers, Marc S. Savitt, email address - marcsavitt@namb.org. He can point you to the people that can help you most.

RESPA Director - Ivy Jackson - (202) 708-0502

Legally the builder can offer incentives, they cannot require that you use a specific lender. Also the discount offered must be a true and actually discount to the customer and not built back into the cost of the loan. In other words, the loan must be competitive with what you could receive on the open market based on your credit score and financial ability. If this law is violated then not only are they potentially breaking RESPA law but the Federal Trade Commission as well.

According to the Federal Trade Commission's Web site, "tie-in sales" may violate federal antitrust law: "The sale of one product on condition that a customer purchase a second product, which the customer may not want or can buy elsewhere at a lower price, is a tie-in. Requirements like these are illegal if they harm competition."

Make the phone calls, you might be suprises at how quickly the tide turns in your favor.

Good Luck and Keep us posted

[CarolinaCruzes]

I would also suggest printing this entire thread...I'm sure your legal council would love to see it.