New builder plummets home values

[momshome]

What is the name of your state (only U.S. law)? PA

The development in which I live was only partially completed when the original builder sold half of the remaining lots to a new developer. The newly constructed homes are literally half the size of some of the existing homes with no continuity as far as architectural style. This has completely ruined the aesthetics of the neighborhood which was the main reason that we as well as others bought into the area. Aside from the real estate market tanking, our home values have plummeted as our homes are now being comped with the tiny homes. The entire landscape has changed from upscale homes whose owners, like us, have previously owned homes and have worked our way up to this type of home. The newer homes are first time home buyers who have purchased homes, offered by the new builder, at a no frills , bare basic minimum. When meeting with the new builder, before construction was even started, he assured us that the new homes would be close to comparable to ours. This is not the case. Do we have any recourse as we have taken extreme losses. Thank you

 

[Mass_Shyster]

Do we have any recourse as we have taken extreme losses. Thank you

No.

The new builder does not owe you any duty to build comparable homes, so has done nothing wrong.

You purchased your home based on speculation that similar homes being build in the area would support the value of your home. That failed to materialize.

When meeting with the new builder, before construction was even started, he assured us that the new homes would be close to comparable to ours. This is not the case.

This was a naked promise that did not rise to the level of a contractual obligation. The builder promised to build comparable homes, but you promised nothing in return. Since there was no consideration (promise) on your part, there is no contract.

 

[Zigner]

"Comps" are based on "comparable" homes. Your house is not compared to a house that is half the size.

 

[justalayman]

No.

The new builder does not owe you any duty to build comparable homes, so has done nothing wrong.

I disagree. They may very well had a duty to build, or allow to be built, only homes that met some specific standards. Without more info, we don't know if they have any action possible against anybody. Depending on what their original contract, deeds and CC&R's of any possible HOA may include, there is a possibility there was a warranty offered that only a house that met certain standards would be built within the development.

at least speak with a real estate lawyer who can review the situation and all the pertinent documents to determine if there was any warranty involved that may allow you some action.

 

[Zigner]

I disagree. They may very well had a duty to build, or allow to be built, only homes that met some specific standards. Without more info, we don't know if they have any action possible against anybody. Depending on what their original contract, deeds and CC&R's of any possible HOA may include, there is a possibility there was a warranty offered that only a house that met certain standards would be built within the development.

at least speak with a real estate lawyer who can review the situation and all the pertinent documents to determine if there was any warranty involved that may allow you some action.

If the OP had a contract stating such things, I'm believe the OP would have mentioned it

 

[justalayman]

If the OP had a contract stating such things, I'm believe the OP would have mentioned it

You are probably correct but I figured I would at least toss out the possibility. The worst that will happen is they check it out and, as suspected, there is no recourse. The best that could happen is there is a hidden buy back clause in their contract requiring the contractor to buy back their house due to the situation and they get to move.

 

[momshome]

"Comps" are based on "comparable" homes. Your house is not compared to a house that is half the size.

Actually, from how it was described by a mortgage professional, the smaller homes could be used as comps in certain circumstances. If there are no other homes that are comparable, and the development is new (which it is), the smaller could be used as comps. The differences in sizes, pricing, etc would be calculated in a way that would actually be adjusted to compare the two in a equal way. Is that a possibility?

 

[justalayman]

any home can be used as a comp. It is preferred to use an identical house right next door but since that usually isn't a possibility, any house can be used and adjustments are applied for the differences in the actual building and location.

The closer the house is to identical in both location and build, the less adjustment to be applied which results in a less subjective valuation of the target property.

so, can you evaluate a 5000 sq ft 3 story brick house by using a single story 1500 sq foot vinyl sided house? Yes but the adjustments are so extreme it makes it very susceptible to inaccuracy.