Price haircut protesters @ Columbus Grove- William Lyin'

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socalhousingbubble_IHB

socalhousingbubble_IHB

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<p>Drove through the Sweet Shade entrance to Columbus Grove on St. Patrick's day and along the park there was a small but noticeable picketing group with a multitude of signs pounded in the ground about William Lyin' and reminding folks to check amendment G in the Lyon standard contract.</p>

<p>There were three or four men there and I swung the car by to talk to them. They were phase 1 Lantana buyers (moved in summer 2006) and seemed quite upset about the $75 to $150k price reductions that have occurred since they moved in, and more importantly, the way they were deceived by the sales staff.</p>

<p>Apparently amendment G formalizes the "anything you were told verbally is completely non-binding..." aspect that is contained in most contracts, because the sales staff told various homebuyers (more than the group there, they implied) things like "We will not lower prices in later phases," "These incentives will never get better," that induced folks to get off the fence and buy.</p>

<p>To the guy's credit, he volunteered that he understood prices were subject to change. The complaint was that the sales staff would tell folks things and then quickly (like days or a week) later the prices would be lowered to new lows or incentives would improve, and that Lyon must have known what they were saying was untrue when they said it.</p>

<p>I think it is very noteable that the passions are strong enough to elicit these types of reactions, and I wonder if more will follow. The Lyon communities for sale there are Lantana and Kensington Court, and anyone driving in to check them out would certainly see this.</p>

<p>SCHB</p>
 
I've bought a couple condos built by William Lyon Homes over the past decade. The only major complaint I had was that in the model home (Irvine), the kitchen range hood had a fake ventilation duct in the cabnet above it. When I got the keys, I found out that the hood sucked air up and blew it right back at your face. After checking the floor plans, I realized there wasn't a place where they could've installed the duct anyway (there's a bedroom directly above it).





I was kinda upset for neglecting to ask the right questions, but then the value of the condo was jumping up so fast I decided to just live with it. Then I bought another condo built by William Lyon Homes in Placentia that actually had the duct in place, but the builder installed a microwave/hood combo that sucked the smoke up, and blew it right back out in your face. LoL. Ugh.





But no, I never had their sales staff pressure me into buying (or make any price claims), and their after-sales service is very good.
 
how sad... wonder if William Lyon will do anything about this... can't look good for sales if there are pissed off people standing right outside.. they should nominate those people to run for the assoication... haha
 
<p>socalhousingbubble: <em>"check amendment G in the Lyon standard contract"</em></p>

<p>Can someone post a copy of the said amendment G so we can see first hand what the fuss is all about?</p>
 
FYI - any communications and understanding relating to real estate must be in writing. So anything they say with a wink and a nod but cannot be memorialized is simply not enforceable.
 
<p>You don't see people protesting when the housing prices go up ...</p>

<p>Folks gotta stop whining. They signed a contract, they knew what they were getting themselves into (I hope) ... a house that you live in is exactly that, a home, not a share of stock.</p>
 
<p><em>"Folks gotta stop whining. They signed a contract, they knew what they were getting themselves into (I hope) ... a house that you live in is exactly that, a home, not a share of stock."</em></p>

<p>But the price of real estate never goes down!</p>

<p>SCHB</p>
 
<p>I actually went down to the development last Sunday to check things out. When I arrived, all I could see were the signs stuck into the neatly manicured lawn, with no protestors in sight. It would seem that the lure of March Madness on ESPN was much stronger than any fear that they had of eventual foreclosure.</p>

<p>I guess it is worth mentioning that in Contract Law, when two parties make oral promises to each other, and then write a signed contract promising something different, the written contract is considered the valid one. The Parole Evidence Rule prohibits introducing outside evidence to vary or add to the terms of deeds, contracts or other writings. Only in the rare occurance that the the contract is too vague to determine intent will other evidence be allowed into the determination.</p>

<p>They could theoretically go after the selling broker for fraud, although that would be a bit of a stretch. There are three levels of seriousness for this under Agency Law:</p>

<p>MISTAKE: a misunderstanding of the material facts. This does not include ignorance, inability, or poor judgement. For instance, if you misread the contract before signing, the contract is still valid and binding.</p>

<p>MISREPRESENTATION: occurs when the person providing the wrong information is not doing it to decieve, but for the purpose of reaching an agreement. If misrepresenation can be proven, even if no dishonesty is involved, a contract may be rescinded or revoked by the party who feels misled.</p>

<p>FRAUD: an act meant to deceive in order to get someone to part with something of value. In other words, profit always the motivation behind fraud. This is usually in the form of an outright lie (of some specific performance) or a lack of disclosure (leaking roofs). The contract is voidable.</p>

<p>--------------------------------------</p>

<p>Now let me say that there has never been a case that I have seen where any selling agent was held responsible for accurately predicting future market trends as a contingency for sale. Real Estate contracts are designed for the simple purpose of conveying an asset from one entity to another. It certainly is not designed as a prospectus for a single asset Real Estate portfolio. I have never seen so many people getting themselves into so much debt for the single purpose of getting rich. Good lord.</p>

<p>Anyway, if anything, the salespeople stating that "We guarantee that the property values will go up" cannot be interpreted to mean a sort of asset performance guarantee.... certainly since no specific benchmarks were indicated (5% per year.. or that sort of thing). Any judge in the country would take the word guarantee to mean it in the conversational way "Things are going to be great.. I guarantee it!!!!". </p>

<p>This sort of salesperson talk is referred to in the Real Estate community as PUFFING, and is perfectly legal. Here is the Department of Real Estate definition:</p>

<p>PUFFING: Exaggerated comments or opinions not made as represenations of fact, thus not grounds for misrepresentation.</p>

<p>Basically, these guys are screwed.</p>

<p> </p>
 
<p>I do not have the sample Lyon contract, so I don't have their language of Amendment G.</p>

<p>I do have a Lennar sample contract, and I think this is likely their version of a similar clause.</p>

<p><u><strong>16. Buyer Acknowledges.</strong></u> (1) Buyer has read and understands all the terms of this Purchase Agreement, and by execution of the Purchase Agreement, has received, read and understands the General Disclosures and Specific Disclosures, both of which are incorporated in this Purchase Agreement by reference; (2) No statements, representations, promises, or assurances have been made to Buyer by Builder or Builder’s sales associate(s) regarding the purchase not contained within the Purchase Agreement and other documents supplied by Builder related directly to this sale, including, but not limited to those relating to the current or future value of the Property or the prices or terms of the other sales made by Builder at any time in this or any other of the Builder’s Communities. All prices, terms, specifications, product upgrades or any other form of concession or Buyer inducement, whether related to the current Phase or any proposed or existing Phase(s) of the Community, are subject to change without notice at the sole discretion of the Builder; (3) Buyer understands no sales associate, employee or agent of Builder has the authority to make any promise or agreement on behalf of Builder not contained in this Purchase Agreement and other documents supplied by Builder related directly to this sale, or to modify or alter any terms of this Purchase Agreement, and (4) this Purchase Agreement contains the entire agreement between the parties.</p>

<p>Lots to think about before one signs on the dotted line.</p>

<p>SCHB</p>
 
Well, it's not like you really have the ability to negotiate the contract. Also, that kind of "what we talked about is invalid unless reflected in the written agreement" language is standard in many contracts - particularly in the event of litigation. Now that the builders need buyers, you might be able to negotiate the form contract a bit, but back in the days of '02 - early '06, it was take it or leave it.
 
<p>I found it! It was Bren's son not Bill Lyon.</p>

<p>New-home concessions irk Maricopa's early buyers


August 18, 1990


Byline: Andre Mouchard


The Orange County Register


Home prices are down, buyer enticements are up and the natives are restless. About 50 homeowners, angered by what they claim has been a pattern of misleading sales tactics in the Maricopa housing tract, are asking the developer for a cash rebate on their homes. They plan to protest today at their neighborhood sales office.


Maricopa, a tract of 100 homes priced between $320,000 and $390,000, is being sold by Baycrest Development Co., a Newport Beach-based homebuilder owned by Cary Bren,</p>
 
<p>graphrix</p>

<p>We need someone with Lexis-Nexis access to find the full article. <strong>If anyone does,</strong> please post it, or let us know that you can with a little more time.</p>

<p>SCHB</p>
 
Housing slump strikes fear in recent homebuyers


As builders lower their prices, current residents seek refunds

December 16, 1990

Byline: Andre Mouchard

The Orange County Register

Vic Perniciaro's neighborhood, a quaint stretch of new homes on the edge of Cleveland National Forest, is in an uproar.

Living-room meetings have been held. People have shouted. Angry letters have been fired off.


The target of all this wrath is the William Lyon Co., the company that built their homes.

Perniciaro and about 25 of his neighbors in the Promontory area of Trabuco Highlands paid $340,000 to $390,000 for their homes between January and May. Now, new homes in the development that are identical to theirs are selling for $30,000 less.

The Lyon Co. can't be blamed for the downturn in the housing market, and Perniciaro concedes that. But he and his neighbors claim that Lyon Co. sales agents promised them that homes wouldn't be discounted in the future. And if the sale prices ever had to be dropped, the alleged promise goes, the Lyon Co. would refund the difference.

Perniciaro and his neighbors have no written proof of such a promise. Still, they are looking for satisfaction -- preferably in the form of cash rebates.

"I think it would be the honorable thing to do," Perniciaro said.

Lyon Co. spokesman Rick Sherman said he can't comment in detail on the residents' allegations, but he flatly denies any wrongdoing.

"To my knowledge, it's not a valid complaint. I'm quite certain our sales people didn't say anything even remotely of that nature," Sherman said.

Getting to the heart of the homeowners' frustrations, Sherman added: "It's always difficult when people face an unexpected downturn in their investment."

In recent months, in some of Orange County's nicest new neighborhoods, many builders besides the Lyon Co. have found themselves in an awkward war with their customers.

The reason for the conflict is simple.

Orange County's housing market, for the first time since the early 1980s, has lost ground. Homes today cost less than they did a year ago.

And as the slide has worsened, recent homebuyers, along with the people who build and sell houses, have felt something that's been missing from Orange County's housing market for a long time: fear.

For most buyers, and even for some homebuilders, the concept of losing money on a house is nothing but a fuzzy memory. The last time it happened in Orange County during a 12-month period was in 1983-84, when the average house in Orange County still cost about $133,000.

Now, despite recent evidence to the contrary, many marketing experts say buyers are having a hard time shaking loose an ingrained expectation that they'll make money on their house from the moment they sign their escrow papers.

"In Orange County, we have one-way vision, and it's forward," said Ken Agid, a real estate consultant and head of The Marketing Department in Newport Beach. "We don't look at history. The hills are filled with gold, and there's no such thing as a dry hole, right?

"In the past couple of years I've noticed that average buyers -- not just speculators -- have developed some pretty big expectations about housing. The buyer figures he'll get a house, live in it for 3.5 years, and sell it for a 25 percent profit," Agid said.

"Now, when the cycle goes down for the first time in a long time, we hear complaints from the buyer. He wants some money back," Agid added. "But, I ask you, when he made money on the house he sold before, did he offer to give any of it back to the builder? No way. He'll only turn to the builder when he figures he's owed something."

But if the debate is about inflated expectations, where did buyers get those dreams?
 
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