ggesq

iTrader: (1)

Ok- second thread I started today in this section but here it goes-

Wife and I signed a contract about 6 months ago on a brand new home to be built by the builder. I had to give a 5% NON-REFUNDABLE deposit down. Before signing this contract, we were keeping a close eye on this other house but alas it was out of our price range at the time so we decided to "settle" on the new home w/ the builder.

6 months later, everything is going fine UNTIL (1) I contact the builder and find out they reduced the base price of the home by 20k and offered to pay more of the closing costs and (2) the original house were keeping an eye on had significantly dropped in price and was now in our price range.

At the current time, the "stage" that the house is in is pre-drywall and none of the options that we chose have been installed. Essentially, it is still in a stage where another buyer can come in and compeltely change things up to the home.

At any rate, I called up the builder and spoke to the sales counselor ( who is a friend of mine) and voiced my concern over the price drop and the "negative equity" I have in my potential new home. The sales counselor went to the builder and they eventually offered me 14k - which is fair considering she got me a great deal to begin with.

After talking it over with my wife, we decided to go after the other house and eat the 5% we put down IF WE HAD TO. My friend, the sales counselor, said she will do anything she can to get my deposit back. The house under construction is currently in a holding pattern. I told them I am backing out of the deal. The sole remedy per the contract is that the builder gets to keep the deposit.

I've read the contract thoroughly, and it is pretty clear that the deposit is non-refundable if I default (which I am). However, recently I have seen a couple of ads by lawyers who specifically practice in getting deposits back from builders. I realize that I am the one defaulting here but the fact that the builder lowered the price and offered more incentives to other purchasers bothered me and who is to say that they won't do it again AFTER I close?

I am closing on the other house at the end of the month, so we're pretty stoked about that. Any people in the know care to chime in?

Cliffnotes:
Signed contract with builder to build me a new home
Backed out of the contract because the builder lowered their price and upped their incentives and also because the house we really wanted significantly dropped in price
House being built is in pre-drywall stage and none of the options we chose have been implemented
Can I get my deposit back?
There are some attorneys that practice in Florida that deal w/ this particular issue.
Please provide any insight.

Thanks for reading.

doopstr

99.99% chance you will not be getting that money back.

Will Y.

I don't practice law in FL, but in CA you would likely be out of luck, although you might get some of the money back from a mediation procedure if the builder agreed to that.

I assume that your original builder is not also the builder of the "other house" and thus cannot transfer your deposit to the new house.

Anachostic

I don't have any real advise, but I wanted to give kudos for taking responsibility for your actions. I'd stay away from the lawyers.

phil2

I am in real estate and basically your fucked. Builders contracts are typically iron clad and not to mention the costs you will incur to sue him will be much more than what you would lose in the end anyways. Close on it and hope the market turns around in the next few years 2009 and make it back in appreciation.

phil2

Ignore my previous statement I just noticed that you are in florida. Forget about 09 for a comeback hope for the best in 2015!

ggesq

iTrader: (1)

To be honest, I don't expect any of the money back but when I saw the ads posted by lawyers in the Florida Bar News ( News publications for lawyersin Florida) it peeked my interest.

No, the they are two different builders. When my wife saw the original house drop in price dramatically, she told me- "YOU better not lose this house. I don't care how much we lose in the other deposit"....

ggesq

iTrader: (1)

I agree with you. That's why we're really not losing alot of sleep over it because I know when I go to resell the house we're closing on at the end of the month, we'll make it back. The house I was going to purchase from the builder wasn't in a community that would bounce back as fast as the community I am going to end up closing in.

dallison

unfortunately, you are going to be sol.

NSXNEXT

iTrader: (2)

I doubt builders are too sympathetic to buyers who back out of contracts, considering the bath they've been taking in FL.

Chalk it up to lessons learned.

Zippee

Why not contact one of the lawyers and see what they say?

Purple Yam

You may not get out of the contract, but keep playing hard ball with the builder. I am sure that you will get what you want, how about more free upgrade (finished basement, etc..) and more money toward closing cost?

This is a buyer market, the builder rather sell the house to you than let you walk; eventhough, you will lose the deposit.

hypertech

This kind of stuff drives me nuts. You made a deal, changed your mind and now you want to screw the builder.

Unless you have some sort of state statute in FL that says clauses like those are void (which I doubt), live with the deal and the choices you made.

ggesq

iTrader: (1)

^^ Your right- I did make a deal and changed my mind AFTER the builder lowered the asking price of the same home after I signed the contract. In all fairness, the builder did offer 14k in additional concessions to me BUT who is to say they won't do it again. I certainly don't want negative equity in a new home much less in this type of real estate market.
Like I said earlier, I'm not losing too much sleep over it BUT I do want a Real Estate lawyer's opinion on the situation.

ggesq

iTrader: (1)

Update: I talked to my friend- the sales counselor. She said that there might be a potential buyer for the home because they are looking to get in the same model that I chose but can't wait the full 6-12 months for a brand spanking new one. Since mine doesn't even have any options or drywall up, she said it might work out that if she can get the house closed with the new buyer there is a chance I could get half of the deposit back.
My friend also said that the potential buyer would not have even considered buying if it weren't for my home that is in the process of being built because of the time frame involved. In this particular scenario, the builder doesn't get screwed and I do get some of the monies back.

Fibonacci

Does anybody want neg equity??? Trying to time the bottom of the RE market is almost as silly as trying to time the exact bottom of a stock market correction. You were comfortable with this deal when you signed a contract and your builder is doing his best to accomodate you. If you truly feel like walking away, that is your perogative, do what's in your families best interest.

Do overs are for grade school. You can hire an attorney to review for peace of mind, but it's money down the drain.

ggesq

iTrader: (1)

Fortunately, these lawyers work on contingency fee basis'. No money out of pocket.

Fibonacci

Usually only Ambulance Chasers and Class Action work on a contingency basis, never heard of RE Attorney's doing so.