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A Builder That Does Not Know What He Owes On A Home, The Builder Is An Idiot

By
Real Estate Broker/Owner with Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale

    Atlanta Country Club Golf Homes Estate Sale Private Gated Public Course Subdivision

     A week go we wrote a contract on a new home in North Metro Atlanta. The contract was accepted a day later with one upgrade being eliminated. No problem, the purchasers agreed. Closing was (note was) scheduled for late November. One week later the onsite agent called and said the builder miss figured what he owed on the home. OK, that's his problem. No, he is not going to close unless your clients purchase at the original list price (!!!!????). Well that's ******, tell him we will see him at closing. The builder said he is exercising a clause in the contract to back out. What clause? You mean the one where he can back out if the purchasers are driving him crazy? Yes, well that's ******. This subdivision had been offering $15,000 discount to be used any way purchaser desires, they had to pull that back, seems he cannot sell the homes for profit with that incentive. So now we have an appraisal for more than the agreed price but less than what the builder now says he has to sell for. He said he asked the bank for a short sale but they would not do it. Sounds like a bunch of ******* to me, the poor onsite agents did not have a clue what the builders position was, this is gonna get ugly!!!

 

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Comments (17)

Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Hi Frank

Most builders have little or no equity. In your case the builder should have known the mortgage payoff.

Good luck and success

Lou Ludwig

Nov 16, 2008 03:27 AM
John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

As a former builder, I'd say he probably should take the deal regardless. If he's that disorganized, he's probably going to wind up in foreclosure anyway. One less spec home should be a good deal even if he has to write a small check at closing.

Nov 16, 2008 03:28 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

Lou - Thanks, how can you run a business without knowing these things? Beyond me...

John - Agreed and they have 8 SPEC HOMES!!!!

Nov 16, 2008 03:31 AM
Lorena McMullen
3DX Real Estate - Novi, MI
Serving SE Michigan

Good Luck!  Sounds like you're gonna need it!

Nov 16, 2008 03:32 AM
Portsmouth NH Real Estate Agent - Rebecca Skane, Realtor®, e-PRO®
Keller Williams Coastal Realty - Portsmouth, NH

Keep up updated!  This is gunna get jucier than any daytime drama!

Nov 16, 2008 03:35 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

Lorena - The buyers are upset, I am not happy, but, the lender is REALLY ticked. He is trying to find the bank the builder uses to see if he tried for a short sale. Yeah, gonna need a little luck....

Nov 16, 2008 03:36 AM
Tracy Williams Pender
Carolina MaxRealty, Inc. - Raleigh, NC
MBA, Knightdale & Raleigh, NC Real Estate

Sounds like Mr. Builder made a huge mistake that he has to pay for.  Good for you for sticking up for your buyers!

Nov 16, 2008 03:36 AM
Martine Assaf
Virtual Homes Real Estate - Quincy, MA

Wow, quite a predicament. Keep us posted. Why is he not taking the loss on this deal, at least he gets rid of one of the spec homes. (if you would have bought then, they were a good deal, blah blah seller's discount on this house...  it should not be an issue to spin a story on this one to sell the others at the necessary price).

Good luck!

Nov 16, 2008 03:37 AM
Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Frank,  Yikes,  so he agreed to something he knows little about and now wants your buyer to also do something stupid ? 

Nov 16, 2008 03:37 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

Rebecca - OK, good idea, this is one occasion when my clients asked what to do and I said this has never happened to me before!

Nov 16, 2008 03:38 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

Tracy - The buyers are repeat customers and he is in the construction business. He said he knows of some liens against the builder...

Martine - I feel the same way, there is something here that does not smell right!

Bill - No way the buyers will go up in price, the apprasal is done at $12,000 less than the builders new price!!!

Nov 16, 2008 03:43 AM
Valerie Spaulding
Windermere Peninsula Properties~Allyn~Belfair~WA - Belfair, WA
Allyn-Belfair-Hood Canal-Local Expertise!

So he'd rather lose a ready willing and able buyer and go back on the market? He does not sound like a very savvy builder actually he sounds like one who thinks he can pull a fast one and get more money pleading ignorance. Ridiculous. It smells pretty funky. Sitck to your guns - course I am sure you had an inspection cuz it sounds as though he would cut corners here and there as well....  Good luck - curious to see how this plays out...

Nov 16, 2008 03:53 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

Valerie - Agreed, he either is not very bright or this is the worst bait and switch routine I have ever seen!!!

Nov 16, 2008 03:56 AM
Kathy Carson
Lynchburg eXp - Lynchburg, VA
Realtor, Lynchburg, VA, VA Homes - Lynchunberg,Bedford, Campbell

I really feel for the poor buyers.  Hopefully they are not homeless.  This is what all Sellers need to realize the Buyer is depending on them to deliver a product.  I'll bet the buyers were counting on being in their new house for Christmas!!

I'll follow the saga!

Have a great day!!

Nov 16, 2008 04:31 AM
Mike Wong
Keller Williams Realty Southwest - Sugar Land, TX
Realtor: Commercial, Residential, Leasing, Invest

I agree with Valerie, he should bite the bullet on this one and get rid of inventory. In todays market I cant believe the builder would destroy his rapport with Realtors and consumers.

Nov 16, 2008 04:44 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

Kathy - No, they are not homeless. We would have closed in only 2 weeks....

Mike - Good point, personally I will bad mouth this builder to no end. Worse yet, the onsite agents have not had a sale since August!!! 

Nov 16, 2008 05:37 AM
Frank & Jodi Orlando
Frank & Jodi Orlando Get Us A Home Realty Atlanta Homes Sale - Cumming, GA

UPDATE:

    No word from the builder and my clients are over this situation. I am going to the subdivision to tell the builder he owes my clients for an appraisal. Quote the clients: We would not buy one of his homes at ANY price. So, back out showing soon, there was no way we could make the builder perform.If I was an onsite at this subdivision I would be jumping ship!!!

Nov 17, 2008 11:16 PM