Expert: Karyn Foley - 9/20/2006

Question
We signed a contract on a new build on 08/05/06, it is now 09/18/06 and we are having second thoughts about going through with the purchase.  The main reasons being that the home has become more expensive than we originally expected with the upgrades we have chose, and the sales agent we are working with seems to be incompetent.

When we first signed the contract on Saturday August 5th, we were told that she would contact us early the coming week to schedule a meeting to chose our structural options so we would be able to close by the end of the year.  However, the middle of the week came around and we still did not hear from her.  I called the office and was told she was on vacation for 3 weeks.  I explained that we were supposed to make structural choices so the building process could be started, but they said I needed to wait for her to return.  Most recently I called her on Monday and she was in a meeting.  So, I left a message with the person in the office to have her call me back.  I called again later in the day when I did not hear from her and was told the same thing.  The next day I called 2 more times and was told the same thing.

Is there anything we can do to get out of this contract without losing our $15,000 earnest money?  So far they have not broke ground yet.  We also called the city and they said that a permit has not been applied for yet.


Answer
Dear Kelly:  I am sorry you are going through such a terrible process.  Buying a new home should be an enjoyable and exciting time, but apparently too many obstacles are in your way.  As I do not have a copy of your contract, I cannot answer a yes or no absolutely - only a real estate attorney can advise you legally.  However, I would immediately call your agent's manager or owner of the office and discuss the situation, after you have carefully documented all that you are telling me.  If you do not meet with success, then go to the builder with your written notes and discuss it civilly with him. It sounds as if he was too aggressive in his sales approach and that he cannot deliver the product as anticipated.  However, how could any one truly expect a home to be ready to close the end of the year when the process had not yet started?  That is quite naive, but this should have been explained to you by your agent who owes you fiduciary responsibility.  Also, it seems almost devious or just plain careless (stupid?) that the permit has yet to be applied for!!!!!  If all fails with the above, then absolutely go to a lawyer who can probably come to some agreement with the builder.  It is not a strong market, so you would be better served either buyer an existing home on the market, or making overtures in a development that has already started and is in progress.  If you do the latter, then expect delays due to weather, shortages of supplies, and worker problems.  No new home seems to ever be completed at the date expected; the promised date is, at best, a target date only.  Let me know if you can reach agreements with the parties involved, if you end up with a lawyer, and what happens.  This seems to be a common problem now, now that the market is slowing down and everyone is still more optimistic than the economy dictates.  I wish you good luck, and hope that by this time next year you will have been in your new home for a time and are enjoying it the way you should. Even if you lose part of your deposit, you can make it up by getting a better deal some where else with some ohe else.  It is bargaining time out there in the marketplace.  No more a seller's market, especially with new home projects.  Karyn Foley