That's a loaded question. I know you posted this a while ago but I'll give you a thought anyway. If you have a buyers agent - and I dearly hope you do - I'd get them to accurately compare your newly construction home with the comparable sales, making sure to include all the improvements to the sold properties and the upgrades in the newly constructed property. If you conclude that the home purchase is clearly not in your best interest you need an attorney to guide you. You stand to lose your deposit and be liable for damages if you default on the purchase. An attorney can guide you as to what your best course of action will be.

The reason I chose to answer is that I currently have 2 clients that were in your situationwithin the last 2 years and decided to continue with the purchase of the new home because they would lose their deposit. Both clients would love to go back in time and forfeit their deposit and get out of the new home purchase. Hindsight is always 20-20.

Some of the other answers mentioned the appraised value and I agree that the appraisal will be important. Another question is the inspection - do you have the right to exit the contract if there is a problem with the home? Again you need competent guidance.

Each situation is different. Your builder has a lot riding on your transaction and might suffer great finanical harm from your default. But you have a lot riding on this too - more than you may realize. Consider all your options. Don't do anything without an attorney to guide you.

Good luck.

Sat May 24 2008, 04:49

I would have to agree with Kathy. Your contract will spell all this out. If you had reprisentation from a Buyer's Agent, they may be able to assist.

Many buyers are in the same boat and there was an article within the past two weeks in the News or Freep about builders putting in less expensive amenities. That may be an option.

Sun May 4 2008, 18:41

You need to look at your contract. How have you financed the deal? Usually the lender will want to appraise the house so you both may lose if that will be an issue. I suggest you review your contract, bring the comparable homes data you mentioned and discuss options. You may also seek legal advice. Best of luck.

Sun May 4 2008, 18:23

Yes, you can often renegotiate the contract with the builder. It all depends on the builder of course, but we've been able to negotiate down almost $100k on new construction based on price decreases that occurred after the original contract was signed. Go in with a positive attitude, and ask for the same pricing and incentives that they are offering now. If they won't negotiate now, use the lender's appraisal as a basis for negotiations when it's time to get ready to sign your loan docs.

Sun May 4 2008, 18:18