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I am currently under contract with Lennar and i discovered yesterday that they are selling the same exact home without the Granite and Stainless Steel Package for 45K less for what I am settling for at the end of September. I have notified my salesperson and Lennar's lender about the price drop thru email. The finance officer pushed the issue on the salesperson. My salesperson called back and stated that the home is not going to have a finished basement or the bells and whistles that i have. He also stated from his managerial experience the lender is not going to do it. I told him that it was not his decision and that I would prefer he mention it to the builder. The home is the exact square footage and floorplan without and it states on the website that it has a finished rec room. I do not expect a 45k decrease but i do expect for them to compromise. Last time i checked stainless steel applliances and granite dont cost 45K. I have 5k down and i just dont see assuming a loan for a home that will be 45k less 3 months after i closed on my home. I need help. Should I send a letter to the builder as well
Good luck and I will be interested to see what advice you get. We are considering building soon and will be adding a considerable amount of upgrades. I am concerned our house won't really be worth what we will have to pay for it.
OP: if the house ended up being appraised for $45k MORE than you agreed to pay, and the builder came to you asking for that much more despite a contract already being signed, would you agree to pay it?
My concern is this I do not want to move into a home that the builder knows that the value is going to depreciate and the sales person stated that if that did happen before i closed the the builder would honor the price change. At least I could decide whether i wanted to wait 3 months to save 45k just don't take my option away to chose what i do with my money.
sales person stated that if that did happen before i closed the the builder would honor the price change.
Unless you got that in writing in your contract, good luck getting the builder to honor it...
If in fact both houses are close comparables and yours is truly going to be 45K more then you could always walk away. You'd loose your 5K deposit but that's not quite as painful as loosing 45K. Who knows, the builder might credit you "something" off your price to stop you from walking. Then again, they may not. The last thing any builder wants right now is to carry another house on their books, especially after they thought it was sold. That said, all the “bells and whistles” do add up, fast, when you have the builder doing the upgrades, especially if the particular builder is one of those that baits people in with excessively low base prices with houses full of the cheapest builder grade materials possible. Before you know it your 220K house costs 290K. Also, it's possible the website is wrong and the house you are comparing yours to really isn’t getting a finished basement, which would account for some of the price differences….
Threaten to walk away. See if they budge. If they don't, walk away and buy the replacement house.
You don't want to be 45k in the hole to start with. Besides, there is a good chance your house won't appraise for the cost and the lender won't issue a loan unless you pay the difference in cost. In that case, you may be able to walk away with no cost (depends on the terms of your contract).
Threaten to walk away. See if they budge. If they don't, walk away and buy the replacement house.
You don't want to be 45k in the hole to start with. Besides, there is a good chance your house won't appraise for the cost and the lender won't issue a loan unless you pay the difference in cost. In that case, you may be able to walk away with no cost (depends on the terms of your contract).
Wait a minute, don't mean to highjack but I am new to this. I may be in the same boat of starting with a base price and adding upgrades. Are you saying an appraisal is always done on new construction and they can reject financing down the road after the house is already built?
Make sure your builder's contract includes an appraisal contingency. If the bank appraisal comes in below the house price the builder can choose to reduce the price to the appraised amount and proceed with the sale of the house. If the builder chooses not to reduce the price you can walk away with your deposit. Personally I would not sign any contract to buy a house, new or existing, without an appraisal contingency.
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