Home Buying in Fremont>Question Details

Sunflower, Home Buyer in Ardenwood, Fremont, CA

Any way to get out of contract with KB Homes Fremont?

Asked by Sunflower, Ardenwood, Fremont, CA Wed Jun 23, 2010

We paid our deposit down for KB Homes Fremont in Feb 2009. Upon looking at the contruction a few days ago, we realized the front of the home closely faces the next door development. We are unhappy and want our 3% back. They told us all other models are sold out and we have to forgo the deposit. Need some help and advise.

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In addition to the replies below, you might want to consider where you stand in terms of the current market value of your home. If you went into contract in 2/2009, KB was offering homes in the Kato Rd. development for very cheap. Mid-2009 was probably the "low" and homes were offered for roughly 10% less than they did in 2008 and recently over the past few months in 2010. KB recently asked 632k-673k (before upgrade options) for the smaller models in the Cascades, and a Plan 2 from an earlier phase (318 Bead Grass) resold for $673k in April '10 (with ~30k in original upgrades). So, if you're in contract for a low-price, you're actually getting a pretty hot bargain on the home. If you absolutely hate the house, KB may actually not mind releasing the home to current buyers because they could probably fetch more $$$ at the current market rates. It doesn't hurt to ask, they may be nice and give you all or some of your deposit back, even though they may not be legally obligated to.

Keep in mind that if you're looking for homes right now in Warm Springs, if you believe the charts, the "bottom" may have been sometime in 2009. As someone suggested, try comparing what kind of existing home you could get in the Warm Springs area for the same price. I think you'll find that anything equivalent is either tiny (like 1100 SF), in bad shape (needing whole-house remodeling to even compare to a new house), and/or located outside the Irvington or MSJ attendance areas.

I'm not sure if you'll have much luck getting out of the contract, but you should probably seek the assistance of an attorney as others have suggested. As part of the home buying process, I'm assuming KB gave you ample opportunity to tour the development and see how closely many of the front doors were spaced together? I'm assuming they provided you with a plot map of your lot, which shows just how closely the neighboring homes are spaced. The disclosures they provided you probably also talked about yard easements and what part of your yard can be used by your neighbor. Nowadays, any new development has very closely spaced houses because land is very expensive and this arrangement yields maximum profit for the developer - it's unusual to have a large yard, unless you're paying a huge premium or you're in a less desirable part of the Bay Area.

I'm surprised that you are so concerned about your front door being near your neighbor's. Perhaps there is something else about the home that you don't like? Assuming you drive a car, remember you'll be entering through the garage entry door, so I would think that people would rarely use the front door, if at all. It seems like the front doors are mostly for guests to enter or if you happen to want to go for a walk.

Anyway, good luck, and please let everyone know how it turns out and what you decide!
0 votes Thank Flag Link Wed Jun 23, 2010
Hello Sunflower,

KB homes in Fremont!

I always suggest buyers, even if you are buying a new home, a KB home in Fremont or any other
large builder's home, take a licensed Real Estate professional with them to make sure some one
is on their side and looking into their interest first.

I am glad that you brought this issue of deposit refund on Trulia platform, that ways you get other
experienced/expert opinion.

In your contract (with KB builder's), please see that there is a clause for removal of contingency time. If you have removed all contingencies in writing, your chances are very slim to get your deposit refunded. I would recommend as other professionals did, that have a Real Estate attorney review your contract and see if he/she can find any outs for you.

You can also ask the builder and see if they agree to substitute buyers if you find another buyers for them. And if not all, at least refund 50% of your deposit. That way's builder can make 1.5% deposit profit.

You can think of going ahead and close this escrow, holding this property as an investment until property value goes up and sale it at a later date.

Good luck to you,

Charo Bhatt
0 votes Thank Flag Link Wed Jun 23, 2010

The proper course of action is to take your contract to an attorney and ask them how to get you out of the contract. The sales people who are managing your contract are not agents for you but employees for the company. Claiming the deposit is (generally) to cure damages resulting from a contract breach and an attorney can tell you how close to that standard the builder comes.
Web Reference: http://bob2sell.com
0 votes Thank Flag Link Wed Jun 23, 2010
Did you sign off on all of your contingencies?
0 votes Thank Flag Link Wed Jun 23, 2010
Hi Sunflower,

The process for having your deposit returned, and the conditions or events that must be present for this to occur, will be located in the contract that you signed. You can certainly review this yourself. If you are still not clear, you will need to speak with a RE lawyer about other options. My experience in these situations, notwithstanding a liberal deposit reimbursement policy (which I doubt with a builder of this size), your deposit will not be returned unless you can identify a material fact that breaches the contract, is misrepresentation, or outright fraud.

While your motivations for cancellation may simply be due to the close proximity of your neighbors, it may help to take an unemotional look at the economics of your current situation. Namely, assuming you have no recourse concerning your money, does it make more economic sense to walk away from your deposit and look for another home, or take possession of the home and then sell? Through this exercise you will be able to fashion an exit strategy.

If you are interested in another new home once your money is returned, you walk away, or take possession and sell; a review of the following document will keep you out of a similar situation the next time: http://docs.Steven-Anthony.com/BuilderRealtorAgent.pdf

Best, Steve
0 votes Thank Flag Link Wed Jun 23, 2010
Hi Sunflower;
First of all, let me say that none of us are attorneys, nor can we give legal advice. And that's what you need:the advice of an attorney. I'm presuming that you were not represented by a buyer agent, just the developer. If that is the case, there is an inherent conflict between their best interest and yours. You need someone to advocate on your behalf. In most cases, a simple letter from your family attorney will get you the result you want.
Best of luck,
Deborah Bremner
REALTOR, 00588885
(D) 818.564.6591
Blogging at: http://TheBremnerGroup.com/blog
0 votes Thank Flag Link Wed Jun 23, 2010

Contact a lawyer but before you do that...
You really need to read your contract. We cannot answer without all the details. Did you sign off on all your contingencies? That is first and foremost. If you did not, you may have a way out.

Really try going in and talking to them nicely, not angry. Let know, this did not meet your expectations and if all the other models are sold, then they should have not problem re-selling this one. Let them know you do not want to have to contact a lawyer to resolve this but if you have to you wil (NICELY). It is alway easier to resolve without escalation for everyone if it is possible.

Good Luck!!!

Kindest Regards,
Dianne Hicks
HomeSmart Real Estate
Web Reference: http://www.di4homes.com
0 votes Thank Flag Link Wed Jun 23, 2010
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