If you have misgivings or concerns with a builder or the process of buildng a home the first step you should take is to contact the builder right away to see if things can be worked out, most often they can. If you are using a REALTOR (great idea, by the way) contact your REALTOR and ask them to help! Talk about what is causing these feelings and try to find out "if" you can work through them. Importantly, make certain that everything is in writing, this is the number one area that people get into trouble.
This question was written in 2008 and many people were nervous about moving forward at that time. I sold new homes for almost 15 years before becoming a REALTOR, and I can say many people go through times of doubt during the process of building a home no matter what the economy is. The key to working through it is talking with family, friends, and professionals. Seek out answers to your questions and don't let doubt stand in the way of your dreams.
Before you do this however I think you really need to take a deep breath and think things through carefully. The angst you're feeling is pretty standard, it's know as "Buyers Remorse" and is very common. You signed the contract to buy to begin with because you liked the neighborhood, the house, etc. Other than perhaps realizing you might be able to get something else for less, what's really changed and are you really comparing apples to apples?
As first time buyers I really hope you are working with an experienced buyer broker. Every buyer would benefit from doing this and particularly first time buyers such as yourself. Real Buyer Brokers don't have the property listed and don't represent the seller, their sole focus is on doing what's best for you.
Before you make another hasty decision, take the time to think things through carefully.
I wish you all the best.
Also, never buy from a builder near or in bankruptcy, you will have a lien filled nightmare.
I do suggest talking to the builder ASAP. Depending upon how well you pose your situation, you may get your money back. If the builder is nearly broke (most are), this won't happen.
I don't think hardly anyone is ever sued for backing out of a contract. You need some legal advice on this though. Many builders make lots of mistakes and usually miss deadlines, you probably have a basis for sueing them.
Spend a little on an attorney, and good luck.
Tough to tell. You're right...it could just be your earnest money...it could be they sue you for specific performance. If you want to back out, the best thing to do is contact the builder and ask them what their policy is. You should also contact your family attorney and ask them for advice. Backing out of a contract is serious business and above our lay opinions to advise you. You probably need professional attorney assistance to give you the best advice. Contracts are serious business. Probably not what you want to hear, but how would you feel if they came back to you and said ...hey we know we have a contract, but the economy has gone up and we know we can sell it to someone else for more money. Here's your earnest money back and we're backing out of the contract so we can sell it to someone else. You might be upset and would consider a lawsuit. So right now they're on the flip side of that.
As someone else mentioned, one idea is to ask the builder if they can transfer your deposit to another home. Maybe they have a smaller home for you or a home in a different community. Always best to work for a win win situation for you and for them.
If the mortgage payment is the problem you might check and see if there is lower cost financing elsewhere.
If you have any other questions please let me know!
I have represented many clients that have had to back out of a deal for a myriad of circumstances.
You are correct, you will lose any earnest money deposit. The Builder will offer this home (when completed)
as new inventory and will eventually sell the home. They will most likely sell it for less than what you agreed to pay, depending on the upgrades and the market conditions at the time of the Certificate of Occupancy is issued. Most Builders will issue you a time line of events which describes the completion dates in various stages of the new home build. Sometimes the earnest money deposit can be used if you transfer it to a different home built by your builder.
Feel free to call me with more particulars and I will represent you in making this transaction work to your benefit.
Lucy A. Puniwai
Sans Pareil Realty
If we can assist you contact my office I am a realtor and loan officer.