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Old 02-17-2009, 10:35 PM
 
2 posts, read 7,299 times
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i had singed a contract with home builder in which the price protection was included later they change the specification and offered me to sign the new spec, which i agreed,
later in a month builder dropped the price by 35000, and they are not offering me price reduction as new spec did not had that protection gurentee, what are my option, should the builder by law was bound to disclose that price protection was being removed
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Old 02-18-2009, 12:36 AM
 
Location: Holly Springs NC
553 posts, read 2,324,443 times
Reputation: 307
Quote:
Originally Posted by superme007 View Post
i had singed a contract with home builder in which the price protection was included later they change the specification and offered me to sign the new spec, which i agreed,
later in a month builder dropped the price by 35000, and they are not offering me price reduction as new spec did not had that protection gurentee, what are my option, should the builder by law was bound to disclose that price protection was being removed
That would be a legal question and I would consult a real estate attorney. Being in real estate I have one in Cary that I use from time to time and I have been very happy with my results. PM me and I will gladly forward you the info.
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Old 02-18-2009, 06:06 AM
 
Location: SW Durham, NC (27713)
1,040 posts, read 3,593,305 times
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Is there anyway you can back out of the contract? I would more or less threaten to back our of the contract (I guess you would lose you deposit or something) and see what the builder says. I would hope you could come up with an amicable agreement.
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Old 02-18-2009, 11:17 AM
 
1,489 posts, read 5,676,172 times
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What did your buyer's agent tell you?
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Old 02-18-2009, 08:41 PM
 
835 posts, read 2,869,482 times
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That happened to us multiple times during the course of waiting for our home to be built. We lost equity before even moving in. Our buyers agents sucked to put it mildly. They were always backing up the builder because the dollar signs were all they could see.
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Old 02-18-2009, 11:43 PM
 
Location: North Raleigh
820 posts, read 2,781,104 times
Reputation: 475
Have your agent talk to the builder and see what can be done. If they don't budge then close on the house as agreed, or lose your deposit and walk away. I say that but I have mixed feelings about it. I understand you wanting to get the better deal, but I also see the builder's side. Those guys want a paycheck too. The original price of your home has probably been built into their budget for labor and materials.

The following is not directed at the original poster, but at those who believe they SHOULD ALWAYS get a better deal before closing when prices decline. This opinion won't be popular but I see housing in two terms. It's either a "home" or an "investment". I bought my current "home" less than a year ago and I am sure it's value is less than what I paid. It would be great if the previous owner handed me a$10k rebate today, but it's not going to happen. It doesn't bother me that the family who buys the bigger house down the street this summer is going to pay less per square feet than we did, because we bought our home to live in.

Now I also own a house that is purely an investment. It's value was up ~ 30% 2 years ago but that's declined to ~ 15% today. Still doesn't bother me because I'm renting it to pay off the mortgage, not to sell and make a profit in less than 5 years. Either way, because it is an investment I have to accept the risk that it will decline just as I would hope it would appreciate over time.

That said, we all know that every form of housing is an investment of some sorts. Even when you buy a "home" to live in you are owning some level risk should unfortunate circumstance happen and selling becomes a must. That risk is still much smaller than the risk of buying an investment home. Your vulnerability to rapid depreciation is far less since you plan to live in the home. If one is not willing to accept even that low level of risk, then one must not purchase but instead rent housing.
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Old 02-19-2009, 07:51 AM
 
Location: Sanford, NC
635 posts, read 3,082,498 times
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What's the loss on your deposit if you "walk away"? If substantially less than the $35k price reduction you cite, then you should have some leverage with your builder.

It may seem like a good deal to them to get "free" money if you were to surrender your deposit, but if that deposit were only $10k, then that builder is still set to "lose" substantially more as the house sits unsold for some unknown time, or even is lucky enough to sell it immediately to someone else for $35k less than what you had agreed to purchase it for.

Maybe there is a middle ground?

I would think the builder would want to do whatever it takes, within reason, to keep you from walking.

Al
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Old 02-19-2009, 10:38 AM
 
Location: Raleigh, NC
12,475 posts, read 32,132,492 times
Reputation: 9450
There are always TWO sides to each story!

Since the OP says he had this "price protection" clause in his original contract and then in the next contract, it was omitted, it makes me wonder why the 2nd contract? Was it because the builder dropped the price and you got the price discount one time only? Sorry to sound suspicious but something doesn't seem right. Builders usually use ONE contract and do not use one for this person and one for the next person.

Another reason to have a buyer's agent. If nothing else, another set of eyes to catch something like this.

The problem is that if you do not have a buyer's agent, it is up to you ALONE to talk to the onsite agent. Believe me, they are TRAINED to be nice but get the best deal FOR THE BUILDER.

I'd suggest if you do not have an agent, you go back to them, being nice but firm. Do not get emotional, do not become threatening. State your case but be fair. If you already got one price reduction or you got more options than they are offering now, you may not really have a case.

It never hurts to ask. If that doesn't work...get a bit demanding. All in a very nice way. You'd be amazed what you can get if you have a valid case and can state it without being nasty! Works for me all the time!!!

Vicki
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Old 02-19-2009, 11:26 AM
 
27 posts, read 100,748 times
Reputation: 34
I would come up with a financing issue and wiggle out of deal then go back to them in a month and tell them you fixed the issue and work a new deal. It's not like people are beating down there doors to buy houses these day.
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Old 02-19-2009, 07:30 PM
 
Location: North Raleigh
820 posts, read 2,781,104 times
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Quote:
Originally Posted by caryguy View Post
I would come up with a financing issue and wiggle out of deal then go back to them in a month and tell them you fixed the issue and work a new deal. It's not like people are beating down there doors to buy houses these day.
Not very noble though is it? And this my friend is why we have so many clauses and contracts to muddle through in real estate.

Whatever happened to honesty and honoring one's word?
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