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the most important factor is how much deposit you have put down. If the deposit is less than $20k, then your threat will be taken more seriously and there would be incentive for the builder to at least partially reduce.
A close friend of mine just closed with M/I Homes a couple months ago. They dropped the base price $30K after he signed papers. They took $30K off the price of his home with very little effort on his part.
It doesn't hurt to ask or be a little pushy. Good luck!
I say ask. No question is a dumb one. Be prepared for a no because it is not walmart where they price match but also keep you fingers crossed for someone with morals that might just cut ya a check!
What does no hurt? You already agreed on a price. We all know the market is sliding, we all know prices are going down. It is bound to happen.
Same thing happened to me when I was about to close on a new built house, all it took was for the banks appriasal to come in $20k below the purchase price for the builder to make an adjustment. A good bank will be there to protect you and there money.
The house isn't yours until you close though no doubt you signed a contract agreeing to X amount for Y house. It could be argued you just lost $20K equity right off due to actions of the builder, but it's my guess this wouldn't have much of a legal basis. It really comes down to your willingness to walk and deal with the built in penalty for breaking the contract vs the builder's need to keep you as a buyer. Only you can judge this.
I would get your real estate agent to earn their commission by bringing up this issue and get involved with assisting you with getting some sort of compensation. Agents do have some additional pull with developers as they depend on them for future business. If anything else, it never hurts to ask.
This is pure business and you will have to live with this for some time so do whatever you can now, before you close, while you still have a chip to bargain with. Of course this might be a moot point. If the bank apprasial comes in lower because of this, the bank might refuse to make the loan.
The lesson here for future buyers in this economy is to avoid purchasing an unbuilt house.
The lesson here for future buyers in this economy is to avoid purchasing an unbuilt house.
I disagree 100%.
You cannot paint such a big issue w/one large broad brush.
IF someone is buying for the right reasons (one reason is wanting to live in the house for 10 yrs or more), then it can make very good sense to purchase an unbuilt home today.
There have been so many people buying for the WRONG reasons which is why pretty much the country is in the mess its in..
some reasons are:
1. Watching 1 too many episodes of "flip this house"
2. Purely financial driven...(real estate being much cheaper here than in other parts of the country)
3. Buying w/not being sure if you want to stay here for more than a couple of years.
4. Purchasing too much house than you can afford...(this doesn't happen as much as it used to..)
I bought an unfinished home at the peak down here (early '07) and I knew it....been saying it forever, but I wouldn't change a thing. Kids are extremely happy, the parents are happy....I'm not looking to sell anytime soon, so I could care less that my home is worth at least 15% less than when I bought it....in 10 yrs or so I might care.
I did use the word "avoid" instead of "don't". Everyone has to judge their own specific situation and I do agree with your reasons to use in that evaluation.
However in general, at this time, buying unbuilt has additional exposures of risk. For example if the builder is cutting prices, what comes next? Does he go bankrupt and the development sit there unbuilt? This and other reasons related to getting what you pay for, is the reason I made the statement. I also believe there are going to be some people left holding an empty bag when this economic crisis is over and contracting for an unbuilt place, at this time, is a good way to increase your exposure to this.
BTW, I have bought two unbuilt homes and am living in one now for more than 15 years. Would I build another? I'm not planning to move, as I really like the place. However, if I was doing it now, I would have a lot of second thoughts about building.
This question has come up on the Triangle forum before. I would talk to your RE agent and together meet with the builder. I have read several cases on our forum of buyers being able to negotiate additional upgrades (and sometimes $ reductions) to offset the drop in base price. I agree with CouponJack about the 180 scenario and the fact that you have more than two options. You have nothing to lose by trying to work this out. I'm sure your realtor has dealt with this before and will know how to proceed in a situation like this. Good Luck!
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