Home Buying in 77584>Question Details

Vero, Home Buyer in Los Angeles, CA

I am currently having a home buit, it should be ready in January. How do I know if the prices have gone down?

Asked by Vero, Los Angeles, CA Sun Nov 9, 2008

I am currently having a home buit, it should be ready in January. How do I know if the prices have gone down? Is it possible to renegotiate the price of the house if prices have fallen?

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Answers

9
There is always time to negotiate depending upon the contract and how much earnest money you will lose. If you have a construction loan, then you are obligated now matter what happens.
0 votes Thank Flag Link Thu May 3, 2012
It will all come down to the appraisal. You agreed upon a purchase price and entered into an agreement for said amount. If appraisal comes in less, than you are in great shape.
0 votes Thank Flag Link Wed Dec 29, 2010
Vero, I am unsure how your contract reads with the builder, but you may be under obligation to purchase the property for the price you negotiated with them. However, if it is predicated on getting a mortgage, it obviously has to appraise for contractual value or you are not obligated to pursue the purchase based on the content language of the agreement. I also recommend having an unbiased appraisal on the property, it may be the best few hundred dollars you ever spent. If all works out, you may be able to use the appraisal and not have to pay twice, depending on your lenders requirements.
Web Reference: http://www.donspera.com
0 votes Thank Flag Link Wed Dec 29, 2010
Vero: Since it is Feb. 2009, Welcome to the neighborhood!
Web Reference: http://www.ERAHouston.com
0 votes Thank Flag Link Sun Feb 8, 2009
Vero you definately want to have an independant appraiser appraise the home for todays value. Builders do not like to reduce their prices. You may be better offer to try and negotiate free upgrades or even at builders cost. Whatever you do make sure you do not break your contract and risk losing your deposit. You should have had a claus in teh contract regarding property appraissing at closing, if not be careful. You should ask your buyer broker or the listing broker tio assist you with this. Good Luck
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Mon Nov 10, 2008
Vero, you would be well within your rights to go ahead and have an appraisal done on the home and discuss appraisal findings with your builder. I had to step in for someone this year when their new home would not appraise for full value, and get their purchase contract through some tense renegotiations based on the lower value of the home. Keep in mind, this does not give the buyer ultimate power over the builder. The builder may have the right, per the contract terms, to walk away from the contract with you and sell the home to someone else. If you don't have an agent representing you on this builder job - get one. These negotiations can get emotional and very heated, and you need cooler heads prevailing with a win:win goal in mind for the builder and the buyer.
Web Reference: http://www.rondaallen.net
0 votes Thank Flag Link Mon Nov 10, 2008
We would suggest that you need a good comparative market analysis and very likely may also need to assistance of a real estate attorney depending on whether the current sale prices have fallen very far below what you paid. Try to remember that if prices had actually increased during the construction of your home, you would not want your purchase price to increase. However, if there is enough money involved, you should still consider your options. Perhaps the developer is open to re-negotiating.

We are assuming that you did sign a contract to purchase the home at an agreed upon sale price. Is there an adjustment clause that allows the price to increase or decrease with changing building costs? Is there a financing contingency that could impact the appraisal and therefore open the negotiation for a lower sale price if the appraisal is low?

Is this home being built for you as a primary or secondary residence? How much escrow down-payment do you have at stake? If you would be better off forfeiting this deposit and buying another home elsewhere, your attorney will need to advise you to be sure that you are protected from a "specific performance" action.

If the price has dropped an insignificant amount, try to keep in mind that over time, the value will increase. It is not always possible in buying stocks or buying a home to do so at the exact bottom nor sell at the exact top. Good luck to you.
0 votes Thank Flag Link Mon Nov 10, 2008
Vero,

This can be a problem in times like these.....

If you have concern you might want to consider having an independent appraiser do an appraisal for you to be on the safe side.

The reality is that prices are not only dropping on resales but new construction as well. Your concern is justified.

Good luck
The "Eckler Team"
0 votes Thank Flag Link Mon Nov 10, 2008
Vero
Congrats!
You are buying at the bottom of the market.

If not, then talley Hoo!

or if you have a GREAT realtor,,,,renegotitiate if prices have fallen the appraisal willbe low
0 votes Thank Flag Link Sun Nov 9, 2008
Keith Sorem, Real Estate Pro in Glendale, CA
MVP'08
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