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It's not really hard to believe. Part of my protocol is before I set foot on any site I require the permission of the owner or their designated representative to be on that site. Here in Texas it can be considered criminal trespass to be on a site without the owners permission. As a result for me, because of other licenses I hold, it becomes a minimum Class C Felony charge. All it would take is the Builder to file charges and on top of whatever else happens I'll lose every one of those licenses.
Since these new contract "Bad Hair Day" clauses I've had one client who was threatened by a Builder to cancel the contract, cause him lots of issues, and get him fired from his job. Being here on an H1B Visa that can wind up being an automatic plane ticket back to his home country per the terms of his Visa. Whether or not the Builder would be successful was not going to be seen as the client was way to afraid to take that chance.
I don't believe in lots of government regulations but new home building is one area that needs serious review to protect the consumers!
My thoughts align with yours. Read your contract yes, but hell be a good human.
Due to permit delays, the gas co refusing to connect us and a bunch of other nonsense we had long delays. Then Covid hit, builder tried to delay C/O etc so I would break contract since he had no outs. Eventually his wife convinced him they will never break the deal as we already owned a home and weren't stressed about the 100k deposit. He reluctantly stopped playing games and we closed with 200k in equity and 1 year later another 100k. It was the perfect storm combined with he listed house to cheap in first place. Now homes half the size needing gut jobs sell for more than we built for.
Unfortunately it appears to be more common here in Texas as of late. Also many are not escalation clauses but instead "Bad Hair Day" clauses. In other words they hold the right to wake up in the morning and cancel for any reason they choose. I've had several clients already threatened by the Build Supervisor to do just that if they pressed to have major defects corrected.
What is really sad in this country are consumers can enter into a finance agreement to purchase an item and have a right of rescission required by law but the largest purchase of their life, a home, is not protected that way. Builders do not allow the contracts out of their building until signed so unless the buyer brings an Attorney with them they have little idea what they are stepping into!
My last two home purchases were in small developments (less then 80 homes) and I was in the last 25% to have a home built. Not truly custom homes but several lots, home models, and upgrades to choose from with delivery in 120 days. I never want to be the first in as one does not know what will happen to the developer/builder. Also do not want the be the last as I want the developer/builder around for any punch list issues. All went smooth on both builds.
My last two home purchases were in small developments (less then 80 homes) and I was in the last 25% to have a home built. Not truly custom homes but several lots, home models, and upgrades to choose from with delivery in 120 days. I never want to be the first in as one does not know what will happen to the developer/builder. Also do not want the be the last as I want the developer/builder around for any punch list issues. All went smooth on both builds.
You're lucky it went smooth. My development was started around 2006. We bought in 2007, closed in 2008. Hub had cancer 2009 to mid 2010. Once he was better, I could not get the builder back to finish the one year. I have spackle marks from them coming to fix stuff but the painter never came back. I had a punch list of stuff, none of it was done.
They left about 3 years later, but had stopped having a sales office after my hub felt better. The sales office going was the end of the builder finishing up.
I do generally think the builder did a not so nice thing here. But allow me to play devil's advocate for a moment. 2 scenarios:
1) Two willing parties sign a contract to build a house for $300k. The builder has a clause saying if the price of labor and materials goes up they can raise the price. The house does end up costing more to build, and the builder says sorry but if you want the house it's $350k now.
2) Two willing parties sign a contract to build a house for $300k. The buyer has a clause saying if the house doesn't appraise or they can't get financing they can walk away. While the house is being built the market takes a turn, and the finished house only appraises for $250k. Buyer tells builder you'll have to drop the price or I'm walking away.
Are these both ethical? Both unethical? One of each? I believe most people think the former is scummy but the latter is more justified. And I'm not excluding myself here. But if I try to be totally objective it seems like it's the same thing?
I do generally think the builder did a not so nice thing here. But allow me to play devil's advocate for a moment. 2 scenarios:
1) Two willing parties sign a contract to build a house for $300k. The builder has a clause saying if the price of labor and materials goes up they can raise the price. The house does end up costing more to build, and the builder says sorry but if you want the house it's $350k now.
2) Two willing parties sign a contract to build a house for $300k. The buyer has a clause saying if the house doesn't appraise or they can't get financing they can walk away. While the house is being built the market takes a turn, and the finished house only appraises for $250k. Buyer tells builder you'll have to drop the price or I'm walking away.
Are these both ethical? Both unethical? One of each? I believe most people think the former is scummy but the latter is more justified. And I'm not excluding myself here. But if I try to be totally objective it seems like it's the same thing?
The difference is that in the current market the builder can easily get a buyer. So in your option 1, the buyer is getting screwed. In option 2 no one is getting screwed.
The difference is that in the current market the builder can easily get a buyer. So in your option 1, the buyer is getting screwed. In option 2 no one is getting screwed.
I guess the context I was trying to get across is example #1 is a seller's market and example #2 would be a neutral or buyers market. Prices are taking a turn down giving the buyer more leverage. But I didn't do a very good job getting that across.
So let's say the builder/seller can't easily get another buyer and will be lucky to find anyone willing to buy for $250k. Does that change things?
And again, I'm not excluding myself here. If I was buyer in #1 I'd be upset, but if I was buyer in #2 I'd do what I had to do and not feel that bad about it. But if I try to be more objective it seems like if I'm going to be mad about #1 I should feel bad or be "the bad guy" in #2. But it doesn't seem to come out that way in practice.
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