What should you do when your home builder starts reducing prices and adding incentives to houses after you've already bought?
We close on our house August 22nd, and the builder is now offering an additional $5K off the purchase price and backyard landscaping as part of their incentives. I know that if I buy a TV at circuit city and it goes on sale withing 30 days, I can take my reciept and get the difference. Can I do this with a home builder?
Of course not. His costs went down so he can cut price.
You can buy that TV at any number of places. It is a commodity. Your nearly completed house is not. What are you going to do? Not close and start another house with another builder? Yeah, I'm sure that wouldn't cost you way more than a few grand.
You have a signed contract with a stipulated sum. There is no reason that the builder has to give you a guaranteed price or discount.
You could ask or hint around the subject, but it would be unrealistic to expect anything. If you do get anything, treat it for what it is - a gift.
R
You can always ask but don't expect the builder to say yes! Builders were making large profits on these houses, and IMO are partially responsible for the overinflated "value" of homes in at least some areas of the country. They raised prices because they could. Now, they're having to slash them to move inventory, and the fact they can afford to slash prices by tens of thousands of dollars in some areas tells me the prices were artificially high to begin with. Many home buyers who bought while prices were at their peak are getting burned now. The predictions that this would happen were there, but few paid attention. The ones who did/will get burned the most are those who took out risky loans to get in over priced homes. Now they're upside down in their mortgages, their payments are going up, and they're competing with their own builders to try and sell quick before their finances are destroyed. Good luck. Maybe you might want to consider not buying the house if you see it headed that direction, but then again, getting out of a contract with a builder may not be easy now that they can't sell the house for more to someone else!
Actually, If we backed out of this deal it would cost us 10 grand in earnest money. But there are houses avail for immediate move-in all over Phoenix (where we currently live) for 30-60 grand off. So yes, we have thought about backing out.
This house was originally supposed to close in the middle of July and has been pushed back twice, first Aug 10th and most recently Aug 22nd. Meanwhile My wife and I, our two small children, and two dogs are living out of a one bedroom apartment.
Well, then, it's not a question of $5K but a lot more. If you can indeed get an equivalent house for $50K less, and in immediate move-in condition, why the sam hill are you asking here about a small discount?
RThis is an obvious situation where you need a lawyer.
You go to the sales people/builder and ask for the incentives now being offered....and if they tell you no then you reply that a letter to the editor of the local news and an interview with the local TV station may influence others not to buy in that development....and by the way until you close the seller/builder has no deal. Muff
Let's see if I understand you correctly. You're advising that someone who agreed to a deal at a particular price, and entered into a contract with their eyes wide open, should complain to the media when the economy changes. Does that sum up your position?
R
he's right that its not a done deal until it closes... its going to be a touchy subject if the builder is good businessman he will work with the buyer, if not he will screw him over. it doesn't really matter if they agreed on a deal, if he is selling the same house for 10 grand less now then when he started building then he should honor the new deals, if the price of materials has truly changed that much then he could simply explain it,, maybe he cant work with the price, maybe he can.... do the right thing for
10 people, someone might tell somebody what a good job you did, screw somebody one time 7 they will everyone they know. if the builder had stayed on schedule the deal would have closed & there wouldn't be a problem, likely the simple fact that builder signed a deal to close months ago & has failed to complete the project has already compromised the original contract. take the high road & just ask the builder if he can work with you.my 2 cents Rob
You're reading a lot into the OPs post that simply isn't there. The original post states the closing was supposed to be in the middle of July and has been bumped back 4 or 5 weeks. Not sure where you get the all the months ago and failure to complete stuff.
This is a simple case of buyer's remorse. You can almost always find better deals after you've bought yours. Here's the question, would the OP be offering the builder additional money, just to be fair, if the market shot up and the OP discovered that the house he bought for $300K was worth $400K at closing?
R
probably not but I had jobs go over a few times & usually the customer is understanding & will work with you, in many cases they don't mind paying the extra if you can justify it.. it doesn't hurt to ask.
What does your contract say?
My guess would be that your contract does not contemplate price reductions, and does not guarantee the builder will sell all comparable houses at the price you paid.
You can approach the builder ... and ask if he would extend the incentives to you. He may be willing to do so; depends on the individual situation..
If he does, show gratitude. Would you be willing to increase the price you're paying if he had raised prices on the others??
If you are thinking of abandoning your deposit and walking, please consult a lawyer first. I can't see your contract, but I would be walking away won't be easy.
Ken
Thats comparing apples and oranges. But if it happened to me I'd be upset too.
There's only one thing you can do - ask the builder. If he says yes, then fine, and have your lawyer draw up or at least review the new papers. If he says no, then go to plan B. People cancel new home contracts all the time. Builders don't like it, but its a fact of life. Even if your contract is ironclad, a builder would rather sell it for a little less to someone else than spend time and money arguing with you about it. Chances are you'll get all (or at least most) of your money back. You might need an RE lawyer to help you through it, you might not.
If they dig in their heels, then don't feel bad about going to the media (you expressed this in another post.) Why not? Its your money, and the biggest purchase of your life. But probably just talking to the builder will get you what you want.
SAnd if the builder RAISED the price for newly sold homes would you be willing to pay above the price you contracted for? Be glad you're not a Seagate Homes customer in Volusia Cuonty, Florida... They are giving back deposits becuase their costs went up. they're also being sued.
Just what cost might go DOWN (over 5K)these days ?
When I bought my home I wasn't dealing with a builder just a realtor so I'm not sure how this would compare. Anyway the home I was going to buy was not ready on the closeing date (repairs had not been made that were supposed to have been made) they tried to get me to extend but since I saw no effort made to make the few simple repairs and the home had not been cleaned I told them that I would like my earnest money back and I would look elsewhere. Now they did not want to give me back my money so I took them to small claims court and they gave me my money back plus they had to pay cost of court. Then I went on and actually found a better home than what I was going to buy, and these people had everything ready for me to move in when the time came. Now my earnest money was only $2000.00 that was why I was able to use the small claims court. So if the builder has gone past the closeing date I assume that he has defaulted on the contract and he should give you back your money and then you can look elsewhere or he should bring the home inline with current priceing.
That's my 2 cents.
snipped-for-privacy@gmail.com wrote:
Maybe Mexican labor???
Ola !!
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