Lawsuit Against Builders For Home Sale Pricing?

Question

I am so upset. I need some help. Here it goes. I bought my first house on 6/28/07 for $331,000.00. Within 5 months the houses in the new area have drop almost $100,000.00. I am so mad. Is there anything that I can do? In our area on the news, my Mom has heard of a class action suit against a builder for this exact reason. Does anyone know or heard of this? Please help, I feel robbed.

Damn, some people can be so rude! My main question was - if anyone knew about the lawsuit against a builder. Also, just a FYI - the people who brought the suit are getting back atleast $50,000.00 from the builder they sued. Be polite, please

Answer 1

I recommend that you contact an attorney who specializes in real estate law immediately.

I also recommend that you hire a very good real estate appraiser, that is someone who is a Member of The Appraisal Institute (MAI designation)

Make certain that your appraiser knows that the appraisal is for the purpose of possible litigation and that he may need to be willing to testify as an expert witness.

In the area where I live in Los Gatos California in my experiebnce when I have hired appraisers as expert witnesses, typically expert witness fees for real estate appraisers is in the range of $1,000 to $2,000 per day and is recoverable as part of your costs if you win your case.

Your attorney will be best able to tell you which costs are recoverable and which are not.

Normally the language of the contract determines whether or not your costs are recoverable.

Even though the language of your contract may say nothing about your ability to recover your costs, most builder's contracts provide for the builder to recover an unbelievable number of costs including attorney fees if the builder has a dispute with you.

In my experience with courts they tend to rule that if one side, the builder has language that specifies that he can recover his costs if he wins the court will often interpret that language to mean that your costs are recoverable if you win.

And you will win this case.

Please check with your attorney for what to expect in your case.

I recommend that you ask your real estate appraiser to give you an appraisal of the true fair market value on the date that you purchased the property that is 6/28/07 is that correct?

Many of these houses were overpriced to begin with.

Next I recommend that you request a copy of the appraisal that was made for the loan that you got to purchase the house.

If they will not give the appraisal to you I recommend that you have your attorney demand a copy of that appraisal from the lender and/or the developer.

Your attorney has the legal power to get that appraisal from them if they will not give it to you voluntarily.

When you get that appraisal ask your real estate appraiser to do a "FIELD REVIEW" of that appraisal. The reason for the field review is that there were a very large number of fraudulent appraisals that were performed by lender's appraisers.

THAT IS ONE OF THE REASONS FOR THE CURRENT LENDING CRISIS.

Typical types of fraudulent behavior on these appraisals includes but is not limited to using properties that are not truly comparable as comparable sale properties, and ignoring properties that are much more comparable to the subject property.

Also reporting incorrect sale prices or failing to account for seller concessions which recently have been in the neighborhood of $100,000 or more in some cases.

SELLER CONCESSIONS ARTIFICIALLY INCREASE THE SALES PRICE. PART OF THE JOB OF THE REAL ESTATE APPRAISER IS TO MAKE THE NECESSARY ADJUSTMENTS TO REFELECT THE EFFECT OF SELLER CONCESSIONS. IF THE APPRAISER FAILS TO ADJUST FOR SELLER CONCESSIONS THE RESULT WILL BE AN ARTIDICIALLY INFLATED APPRAISED VALUE.

ESSENTIALLY THE HOUSE WILL APPRAISE TOO HIGH, FAR ABOVE ITS TRUE FAIR MARKET VALUE.

Also incorrectly reporting the square footage of the house and the lot that the house sits on are other common sources of fraud.

If you will do this type of an investigation it is very likely that you will discover that the builder and the builder's agents have engaged in fraud.

I doubt that your house dropped over $100,000 in value in five months.

IT IS FAR MORE LIKELY THAT YOUR BUILDER AND THE BUILDERS AGENTS AND EVEN POSSIBLY YOUR LENDER ENGAGED IN FRAUD.

FRAUD IS LEGALLY ACTIONABLE. YOU CAN RECOVER YOUR ACTUAL DAMAGES, PUNITIVE DAMAGES IN SOME CASES AND YOUR ATTORNEY'S FEES IN MOST CASES.

PLEASE SEE YOUR ATTORNEY FOR MORE DETAILS.

PLEASE DO NOT LET THOSE CROOKS GET AWAY WITH THIS!!!!



(edit) I see that while I was writing my response you added that the builder has offered $50,000 per property to some of the other people.

I would say that is a very good start, and it is as I suspected that they knew that they were doing some things that were not correct.

I will guarantee you that no builder gives up $50,000 per property if they were not doing something wrong.

I recommend that you show my response to your attorney to see if you can't get something like $100,000 or more from these crooks.

I am sorry to hear of the problem that you have had with this builder.. Unfortunately this kind of thing has been going on all over the United States. It is time that we put a stop to it.

One of the best ways to discourage the sort of bad behavior that these developers have been engaging in is to take legal action against them and expose the fraud.

Also some of the people who responded said you had no case. Those people do not know what they are talking about.

They are not attorneys, they are not licensed to practice law, and some of them may be real estate agents.

This is one of the reasons that I avoid having anything to do with real estate agents and REALTORS. They are very poorly trained and do not know what they are talking about. They are trained as salespeople and nothing more.

They think that they know what they are talking about but they do not. They can be some of the most arrogant rude people on the planet.

I recommend that you ignore them Only take advice from your attorney and your real estate appraiser.

I wish you a great deal of success!!!!!

Expose the fraud of this developer!!!!!!

Get your damages!!!!!!!

Go for it!!!!!!!!!!!!!!
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(edit again) The responder below me thinks that any fraud would only be against the lender. That is not true. The fraud is against you. That is particularly true in the case of a fraudulent appraisal which I suspect may be one of the factors involved in your case. In the case of a builder there is often a great deal of collusion between the lender and the builder. They both can be guilty of fraud against you. The lender wants the high volume of business from the builder. That is highly profitable business for the lender.

The answer of the responder below me assumes that you are equal to a professional who does know the true fair market value of the real estate involved.

You do not know the fair market value of the real estate involved. You are relying on people who claim to be professional and have some expertise to advise you honestly.

That is the reaosn that I recommend that people have absolutely nothing to do with real estate agents or REALTORS. Only use a highly competent real estate appraiser and a competent attorney who is licensed to practice law. If there must be a real estate agent involved at least the attorney will keep the real estate agent in line.

Real Estate agents and REALTORS are only trained as salespeople. They have no systematic course of training beyond sales and some very rudimentary knowledge of how to fill out a real estate form contract.


Again I recommend that you talk to an attorney immediately. Show this entire response to your attorney and see what your attorney says about all of the responses.

Answer 2

Sadly, the other posts here are correct. It's not the builder's fault that home values have fallen. As far as someone 'getting back $50,000', that's probably a false rumor, unless they won a lawsuit on some OTHER basis. No judge/jury will award against a builder when you agreed to purchase a home at the price he requested.

You would have to show fraud, negligence, or poor quality (not built as specified) on the part of the builder. Falling real estate values qualify as neither of those.

If you can show lender fraud being involved, you might have a slim chance. If there was some sort of collusion to over appraise these properties, THAT is fraud. However, that fraud would be more against the lender than it would be against you. Do remember that you agreed to purchase the property at the price asked.

Note to the above poster: Acermill informs him that he has the advice of two attorneys on this one, one of them being a very qualified real estate attorney. Be advised that the appraiser was hired by the lender (even though paid for by the borrower), and does not represent the interests of the borrower.

Answer 3

In some areas the market just went down this amount. I would do some research into your sale and see if you were dealt with fairly. I am a real estate appraiser and chances are that there could be issues with the appraisal Request a copy from your bank. When you get the copy I would take it to another real estate appraiser not associated with the first one and pay to have a review done. It is possible that the appraiser did not honestly report concessions from other sales or something to that effect that would cause the value to come in higher. Ultimately though you need to do some of your own research and see if your sale was typical for the time frame. Talk to other people who got homes when you got yours from the sale builder. They may have lied, cheated and swindled there way through there. If you find that is the case then get legal representation.

Answer 4

There is nothing you can do in the form of a class action suit. You agreed to by the home at a price. If the price had increased, would you pay the builder more?

If you have already settled, there is NOTHING YOU CAN DO.

If you haven't settled yet, I would go back to the builder and see if they will honor the new price. I know that the builder I represent has gone back to our undercontract buyers and actually gave them the new price WITHOUT being asked. We gave free options and extra closing in the form of 6 months paid mortgage on the new house.

If you haven't settled, then you could walk away from the deal. You will lose your deposit, but that's a decision you need to make.

In addition, if you haven't settled and prices have dropped $100k, the appraisal may not come in, so the builder will need to deal.

In regards to the settled homes, there isn't anything the builder can do. We did go back and plant additional trees, etc.

Answer 5

Value is what someone agrees to pay for an item, if you did not think it was worth 331K then you should not have bought it. Homes are not guaranteed to increase in value especially in the market today which in places like MI, CA, FL, & NV have had a glut on homes with not many eligible buyers thus leading to depreciation, in many cases 25% and more. Class action to a builder for accepting the market price of the home at the time, or uneducated buyers, getting 50k, sorry Urban legend. If you purchase 300K in a stock, and the stock loses value in six months are you going to file suit against the company? the brokerage house? If you buy a car for 50k, drive it off the lot and now it is only worth 40k you going to sue the dealer? the manufacturer? You took the risk, signed the contract agreeing to pay X amount for X property and now trying to blame your decision on someone else, because it did not appreciate in double digit increments as in the years before, A home is an investment and a risk just like anything else. Live with your decision

Answer 6

Houses everywhere have dropped in price.

I don't think you would have a case. Anyone can ask any price but the lender is going to require an appraisal to make sure it is worth that much at the time of the loan.

The prices have probably dropped because the aren't selling and the only way to lure buyers is to lower the price.

At one time, my house was about $250,000. It dropped to $150,000 about a year or so later. That same house was just appraised at the beginning of the year for $515,000, now house in the neighborhood are selling about $425,000.

It is just a cycle, you need to ride it out. It doesn't really affect you unless you want to sell your house now. Save your money, you will just pay lawyers and not get anywhere.

You might want to contact your local assessors office to see about having your property value looked at for a property tax reduction.

Answer 7

You’re mad at the builder for adjusting his prices so the properties would sell? That’s a matter of business.

Personally, I’d be far more upset at the mortgage appraiser who let the loan go through. I’m sorry for your loss, but please understand this is a risk you take by being among the first to buy in a subdivision.

Answer 8

A class action suit for pricing? They will loose. This is a free market, you can not be forced to sell at a higher rate then the market allows.

Everyone is in the same boat, our homes are worth less then they were a year ago.

No one robbed you. You bought a house in a free market country. Prices fluctuate. Get over yourself.