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New construction - Agreement of Sale dispute

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Junior Member
What is the name of your state? PA

Hello. I'm new to these boards and hope someone can assist me. My wife and I signed an Agreement of Sale in May 2006 for a new home. There will be a total of 9 new homes; 3 of which are in progress and about 75% complete. They are considered the "model" homes. We actually reserved one of the other 6 lots and ground was broken today (7/10) on ours and one other. We felt as though we were getting a "pre-construction" price at $329,900 and felt comfortable with that. When we signed the contract, we made a non-refundable deposit of $15,000. We also have a $35,000 upgrade addendum which gets paid directly to the builder at closing.

Now here's the problem. The model home we selected has been listed on MLS for 42 days for $329,900, which is the contract price on our home. It is exactly the same as our house before our upgrades which are separate from the contract. Now today, I notice on MLS that the asking price for this home has been reduced to $299,900!

Needless to say we are very upset. I need to confront the builder tomorrow, but I'm not sure how to proceed. He's a reasonable guy and I can't blame him for reducing the other price if he's having trouble selling it. But on the other hand, if we proceed, we'll be paying at least $30,000 more base price than the buyer of that house, which is directly behind our lot. At worst, I lose my $15,000 deposit. I'm sure he doesn't want to see us walk away, but do I have any leverage? I'm sure he hasn't done anything wrong legally, but does he have a moral obligation to reduce my price as well? This just doesn't seem right. I felt as though we got a good price initially, and now it's the exact opposite. Any advice will be much appreciated. Thank you in advance.


Senior Member
What a builder is willing to sell a property for to rid his inventory may have little to do with what it might sell for given 45 more days.

The markets they are a changin' and folks will be sitting a looooong time on some houses in some areas now because they are stuck with houses they paid premium dollar for and they are looking at offers up to 100K less than what they paid. Since they have 100% loans, zero equity etc. they are in trouble because they certainly do not have the 100K to pay off the mortgage so they can sell the home.

This is going to be a buyers gold mine in SOME areas.

I digress, talk with the builder and see what can be worked out, if anything.

but does he have a moral obligation to reduce my price as well?

This is a business venture and contracts rule, MORALLY he has no obligation to do anything but take your 15K and might even be able to sue you for other damages depending on the contracts you have signed.

Oh and please tell us you did not sign a ton of contracts with all kinds of contingencies on limits to prices going up etc, without benefit of an Atty to make sure YOUR assets are covered? After all over 300K is not chump change and I am sure you were smart enough to protect it, but IF you didn't then better take that contract that is in favor of the builder to an Atty versed in real estate and have them take a look at it NOW!

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