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Old 11-21-2007, 05:42 PM
 
Location: Montana
2,203 posts, read 9,321,211 times
Reputation: 1130

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Quote:
Originally Posted by Greatday View Post
First, much depends on the Contract. While not a guarantee, I review Richmond American contracts all the time (when my agents register a buyer with them).

Your deposit was probably placed into their general operating account, and not a title or escrow company. This is SOP for many builders including Richmond American and you, when you signed the contract, agreed to this

They have any number of "outs" for not starting your home right away - however requiring more money to assure starting of your home is generally not provided for (in fact, I have never seen it).

The law does recognize the concept of "reasonable expectations" as it applies to construction of a new home - things like rains, labor disputes, general material shortages etc can impact construction times but, waiting for the economny to get better generally will not wash with the courts.

My advice is to send a formal and strongly worded letter to Richmond American - expressing that you had a "reasonable expection" that the home you contracted for on (whatever date) would be completed on or about (whatever date you are moving to AZ). That you are DISMAYED that they have not even broken ground on your home. Ask them for WRITTEN ASSURANCES that your home will be completed by (March?). Tell them that if such assurances are not forthcoming that you wish to cancel the contract DUE TO RICHMOND AMERICANS LACK OF PERFORMANCE and DEMAND IMMEDIATE RETURN of your monies. Let them know that if they fail to do one of the above, you will seek legal counsel and that you will pursue all legal actions in law or equity (pm me if you need a REAL ESTATE attorney who has handled cases like yours).

Good luck

BTW - I'll make book that RA will return your money
Very helpful advice, Greatday!
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Old 11-21-2007, 06:05 PM
 
Location: Buckeye, AZ
132 posts, read 592,985 times
Reputation: 35
I agree on getting your earnest money and moving on to the next builder. There are builders out here in PHoenix that are giving buyers Incredible Savings on their SPEC Homes. Look around and I bet you that you'll find a better deala and a better house.
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Old 11-21-2007, 08:28 PM
 
Location: Chapel Hill, NC
64 posts, read 185,792 times
Reputation: 39
I'm so sorry to hear of your strife. I can certainly understand your situation and how frustrating that is for you. Unfortunately, you do not have much leverage at this point, especially considering they have not started your home. Most builders' contracts read that they have up to one year to complete the home from the date that it BREAKS GROUND. Without knowing who your builder is, I would still venture to say that they are in some serious financial trouble of their own and the reason they have not started your home is because they don't have the funds necessary to pull a permit and pay the contractors. Also, know that if a builder goes under, your earnest money is lost. This is standard practice in the industry (not a sham). My advice to you is to lobby as hard as you can to get back your $2000. and go ELSEWHERE! Keep in mind though, that you may not get your $2000 back regardless. Do NOT make the mistake of putting more money down!! Just cut your loses and go some place else. But before you buy again.. research not only the quality of the builder, but the financial strength of the builder. Especially if they are public companies.. that info can be researched easily.You want to be sure that a builder is going to be around long enough to build your home and service your warranty.
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Old 11-22-2007, 01:33 AM
 
267 posts, read 885,298 times
Reputation: 151
Quote:
Originally Posted by Greatday View Post
First, much depends on the Contract. While not a guarantee, I review Richmond American contracts all the time (when my agents register a buyer with them).

Your deposit was probably placed into their general operating account, and not a title or escrow company. This is SOP for many builders including Richmond American and you, when you signed the contract, agreed to this

They have any number of "outs" for not starting your home right away - however requiring more money to assure starting of your home is generally not provided for (in fact, I have never seen it).

The law does recognize the concept of "reasonable expectations" as it applies to construction of a new home - things like rains, labor disputes, general material shortages etc can impact construction times but, waiting for the economny to get better generally will not wash with the courts.

My advice is to send a formal and strongly worded letter to Richmond American - expressing that you had a "reasonable expection" that the home you contracted for on (whatever date) would be completed on or about (whatever date you are moving to AZ). That you are DISMAYED that they have not even broken ground on your home. Ask them for WRITTEN ASSURANCES that your home will be completed by (March?). Tell them that if such assurances are not forthcoming that you wish to cancel the contract DUE TO RICHMOND AMERICANS LACK OF PERFORMANCE and DEMAND IMMEDIATE RETURN of your monies. Let them know that if they fail to do one of the above, you will seek legal counsel and that you will pursue all legal actions in law or equity (pm me if you need a REAL ESTATE attorney who has handled cases like yours).

Good luck

BTW - I'll make book that RA will return your money
Wonderful advice, GreatDay. I wil definitely be writing them a letter like that the beginning of next week. And thank you everyone else for your advice. I feel a little bit better right now. I was just so frustrated to find all this information out I didn't even know where to start.

Also, SOONTOBESURPRISE, the Design Center wasn't that bad. But I think that is because we had gone there before we signed a contract and just looked around. We pretty much picked out and knew what we wanted so when we got there the lady (who was VERY pushy by the way) couldn't sway us too much. She kept telling us to get this and that, which we didn't want or need and I must have said no over 100 times that day . They do charge a lot for basic upgrades though, and those are things that are pretty much needed. Like for example the bathroom counters are REALLY uncomfortably low, and they charge to make them taller. But overall, it wasn't TOO bad. Could have been worse.
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Old 11-22-2007, 05:14 AM
 
3,886 posts, read 10,079,659 times
Reputation: 1486
There wanting more money because they don't have enough to build your house, it's not to see your loyalty! Run from this deal, take it from me, I work with a lot of new builders, there broke!!!!
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Old 11-22-2007, 10:32 AM
 
Location: Gilbert - Val Vista Lakes
6,069 posts, read 14,777,192 times
Reputation: 3876
Quote:
Originally Posted by OctoberMoon View Post
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.
You've already received some good advice from others here. I'm in agreement that you should write the demand letter for your money back. I believe RA will return it without any problem.

May I suggest that when you purchase your next new home, spec home, or whatever, that you use your favorite realtor to represent you. The builders sale agent represents the builder and has no fiduciary duty to you.

All you have to do is take your agent with you on your first visit to see the homes so they can be registered as your agent. The builder pays the agent fee. It does not cost you anything, and you get an agent whose fiduciary duty is to you, not the builder.

If you had an agent representing you in this case, the agent would take the contract and show the builder where they are technically in breach, and make the request for your refund. You would not have to do anything except tell your agent to get your deposit returned. If the builder gives the agent a difficult time, then the agents broker would make a phone call to the builder and chances are that phone call would begin with a polite demand and if necessary would escalate to the "threat" of a very expensive law suit that the builder would be destined to lose. A broker who has a large company name backing him/her carries a lot of clout. Especially today.

I mention this because so many buyers do not realize that the sales agent in the builders office does not represent the buyer, and that it does not cost the buyer anything at all to have a buyers agent. The builder pays the agents fee. (However, if you visit the builder on your first visit without your agent, then they will not pay your agent. Obviously they prefer you to not have representation, and that they don't have to pay a fee.) It is much better to have a free support team on your side when you deal with builders than to go it alone.

Good luck,

Bill
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Old 11-24-2007, 12:55 AM
 
267 posts, read 885,298 times
Reputation: 151
Quote:
Originally Posted by Captain Bill View Post
You've already received some good advice from others here. I'm in agreement that you should write the demand letter for your money back. I believe RA will return it without any problem.

May I suggest that when you purchase your next new home, spec home, or whatever, that you use your favorite realtor to represent you. The builders sale agent represents the builder and has no fiduciary duty to you.

All you have to do is take your agent with you on your first visit to see the homes so they can be registered as your agent. The builder pays the agent fee. It does not cost you anything, and you get an agent whose fiduciary duty is to you, not the builder.

If you had an agent representing you in this case, the agent would take the contract and show the builder where they are technically in breach, and make the request for your refund. You would not have to do anything except tell your agent to get your deposit returned. If the builder gives the agent a difficult time, then the agents broker would make a phone call to the builder and chances are that phone call would begin with a polite demand and if necessary would escalate to the "threat" of a very expensive law suit that the builder would be destined to lose. A broker who has a large company name backing him/her carries a lot of clout. Especially today.

I mention this because so many buyers do not realize that the sales agent in the builders office does not represent the buyer, and that it does not cost the buyer anything at all to have a buyers agent. The builder pays the agents fee. (However, if you visit the builder on your first visit without your agent, then they will not pay your agent. Obviously they prefer you to not have representation, and that they don't have to pay a fee.) It is much better to have a free support team on your side when you deal with builders than to go it alone.

Good luck,

Bill

I did not know this. Thank you!
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Old 11-24-2007, 05:19 PM
 
2 posts, read 4,560 times
Reputation: 10
what development was it?
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