Need Help - New Home Purchase (Back Out?)

[avizpa_IHB]

Hello Guys,



I signed a purchase agreement for a new home 9 months ago with a builder. I think I made a good deal when I negotiated the price. I got a price reduction of $32K when I signed the contract. I was happy with the price and they also offered "Price Protection" in case the prices went down before closing.



Now, 9 months later, the base price has gone down $25K (8% of the original base price $312K). However, when the builder applies the "Price Protection" I only get a reduction of $1600 (not the $25K I expected). The "justification" is that the "protection" cannot be combined with any other offers or discounts. That's what the fine print of the "price protection" says too. So, that means the $32K discount I was able to negotiate at the beginning is not being applied at all with the price protection. I either take the original price minus the $32K adjustment or I take the new price minus some upgrades they're paying anyways (which is only $1600 lower compared to the home base price reduction of $25K).



What options do I have? Back out? renegotiate before closing? If I back out I'd probably lose all my down pymt ($15K) but at least I won't lose $25K and the risk that prices continue going down.



Appreciate your advise. Closing is in 1 month.



Avizpa

 

[no_vaseline_IHB]

You aren't in California I'm assuming.



My suggustion to you is to retain an attorney with Real Estate experence.

 

[awgee_IHB]

I do not have any advice. But, I do want to thank you for sharing your experience. Your story and others have convinced me that if I ever buy a new home, I will pay to have an attorney read the contracts and explain everything to me.

 

[Stuff It_IHB]

[quote author="awgee" date=1228779718]I do not have any advice. But, I do want to thank you for sharing your experience. Your story and others have convinced me that if I ever buy a new home, I will pay to have an attorney read the contracts and explain everything to me.</blockquote>


I agree. Sorry no advice from me since I dont know anything. But thank you for the info

 

[jbatzmaru_IHB]

i backed out of a contract before. i was 1 week away from signing. my advice.... talk to the person who sold you the house and get him/her to understand the situation. explain your side nicely. tell them what you want. The market is soft for new house. the last thing the builder want is for you to back out. if all else fail hint that you are willing to take it to the next level and drag the deal out for another 6-10 months. When a house is being drag though court the builder can not sell it and thus losing more money. If they lose more then you they will think twice about it. if all else fail get an attorney.



i told my builder if they don't let me out of my contract then i will take it to arbtriution and drag it out for as long as i can and cause them to lose more money because the price will keep falling and in 10 months they will lose more then what they gain from my deposit. of course my deposit was only 5k so we came to a deal where i paid for the appraisal and this and that since it was done already 1300 bucks and they gave the rest back to me. i could have held out for my full deposit but then again i backed out because i changed my mind and it wasn't really their fault.



If you want more detail about the situation do a search for savannah on the board. that was the tread that i posted most of the comment on my transaction.



good luck.

 

[robinhood_IHB]

Dear Homeless Newbie:



Although your house's value may have decreased considerably, the government is considering a new program to help buyers willing to take a chance in this turbulent market. They are proposing giving out mortgage rates at 4.5%.



I don't have too much info on this, but I'm sure you can find more info online.



My thoughts are if you are in love with the unit, and have good credit, perhaps, it's still a good play?





Just my $.02.





Good luck,

 

[jbatzmaru_IHB]

[quote author="robinhood" date=1228795255]Dear Homeless Newbie:



Although your house's value may have decreased considerably, the government is considering a new program to help buyers willing to take a chance in this turbulent market. They are proposing giving out mortgage rates at 4.5%.



I don't have too much info on this, but I'm sure you can find more info online.



My thoughts are if you are in love with the unit, and have good credit, perhaps, it's still a good play?





Just my $.02.





Good luck,</blockquote>


You should read IR post today. it will explain the 4.5% interest theory and why you should not buy due to this new government program.



http://www.irvinehousingblog.com/blog/comments/4.5-mortgage-interest-rates/#more

 

[OCCOBRA_IHB]

Talk with an attorney. But i would stand firm and say that was misrepresentation and that you will not close until you get the lower price. Good home builders are dropping the prices at the last minute just to get the closing. Wait them out and when push comes to shove they should give you the price. Do not sign the cancellation paperwork under any circumstances if you really want this home with out you signature it puts a cloud on the title and it will be a big pain the ass for the builder to get around this. If they try to cancel you unilaterally then talk with an attorney. A small minority of builders are being real asses to their customers on this issue. The other thing is call Department of Real Estate and explain this situation to them that you have been misrepresented if they do not back down. That should rattle them. When we have people who just disappear and do not close and are unresponsive eventually they would get all their money back if they just signed the cancellation paperwork so we could resell the home. As long as your loan approved and have done everything on your part stand your ground and don't be pushed around. They will need this closing for month end so their tune should change towards the end of the month.