I close in 60 days. The builder should have completed in Aug. Can I get out of the contract.?

Question

The price has fallen fron the contract price of last year.

How can I protect myself in this case as i was required to use thier lender. I am sure the builder will make sure the house appraises eventhough they are now selling the same house 200k less

Answer 1

does the contract say "if not finished by august, sale can be voided"? if not, see a lawyer.

Answer 2

Here's an interesting scenario. The house must appraise for the appropriate value to allow financing. The appraisal must be valid at the time of closing, not at the contract date. If there are delays and the market has slumped, it should be re-conducted. You can use similar houses now being sold as comps to show that it should be reconsidered. If they refuse, you could allege fraud since the bank and buyer seem to have a relationship. You never want to use a lender specified by the developer. Why give him the power to determine the terms of your financing.

Answer 3

Nope, because you contracted at a certain price, however, it must appraise.

If it cannot appraise, the bank won't approve the loan, and the builder will be forced to either let you out of the contract or lower the sales price.

Just because NEW CONSTRUCTION misses a closing date doesn't give you an out....read your contract carefully. It probably says that the closing date is a TARGET date, and unless you see the words "time is of the essence" (which I can guarantee, you won't), then your contract is still valid and you are obligated to close on it.

If you walk, he gets to keep your earnest money and sue you for specific performance...builders are smart...they can rarely meet a specific date on new construction, and the contract allows them to keep their rights while still binding you.

Answer 4

Usually you can but you lose your deposit that is non refundable.