Home Buying in Rio Rico>Question Details

Mbll, Home Buyer in Rio Rico, AZ

Builder can't deliver on original agreed home size due to lot - want to cancel and recover some earnest $

Asked by Mbll, Rio Rico, AZ Tue Sep 11, 2007

We signed a contract in March with a builder in Rio Rico, AZ. When we went back a month later - we noticed a two story house where they said there would only be one-story homes.To their credit, they offered a new lot with a better view (but more noise from the highway) for a reduced price and it was conditional upon us doing a 4 foot extension - which we wanted anyway so it was fine.2 months later we find out the extension on that particular lot made the 2 car garage not work on the angle an extended house had to be on to fit the lot. They tried to get a variance but failed two times.We did a change order to remove the extra $$ amount and were trying to accept a 4 foot bump out for the porch instead.However, now the builder has come back with a rejection of a parapet roof that they said they could do and had a price for. A recent roof they did in this style - leaked and understand that they don't want to do it until t

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The terms of your contract define your rights. Builder contracts generally will favor the builder strongly. But, most builders would rather have you as a customer instead of a disgruntled cancellation. If this is a reputable builder, they will try to work with you to retain you as customer. Even if the contract provides them provisions and loopholes that might allow them to make changes, their business decisions may be guided by the desire to place a satisfied buyer in a completed home.

The fact that you have an agent is really good news. A neutral third party negotiator will gain mileage. Additionally, the builder will be cognizant of the potential domino affect of their decisions. The builder would not want negative reports flooding the gates of that Realtors network of other buyer clients and brokers.

You might encounter more obstacle in gaining a refund of earnest monies as compared to a transfer of the monies to another property. The builder want to complete sales. If you work with the builder (through your agent) to accomplish his/her goal, you will gain cooperation and support in meeting yours.

Best of luck to you. Keep us posted.
1 vote Thank Flag Link Tue Sep 11, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
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From what you said, the builder is defiantly breached a contract. When you agreed to accept a new offer, builder lowering the price and doing a 4 foot addition, you entered in to a new contract. After you found out they can't do that for you, the builder breached another agreement. You changed the agreement again buy paying less and taking porch extension and it looks like they breached another agreement. I don't know who your lawyer is or how things work in AZ, Going by NJ law, they owe you a nice financial compensation on top of delivering you a house they agreed too.

Good luck.
2 votes Thank Flag Link Tue Sep 11, 2007
You should look at both your purchase contract and the advertising media the builder used to market the homes (ie. flyers, newspaper & magazine ads, website, etc...)

Builders in California often have a caveat at the bottom of their marketing pieces in small print With *** next to it stating that the "builder reserves the right to alter floorplans, elevations, lot placement, etc... as necessary and at their sole discretion," and I have also seen this disclosure clause in builder purchase contracts.

This doesn't mean the builder will not let you out of the deal or negotiate with you but if it is published somewhere they could use it to hold you to the contract.
2 votes Thank Flag Link Tue Sep 11, 2007
Good Day to you, Mbll
WOW What build are you working with? That's a lot of issues that you had to deal with!
Did you seek Realtor consultation when signing the contract in March? If so, they will be able to help you.
If not, have you documented all this? Having a paper trial proving your side of the story is always helpful.
You need to let them know that you are not happy with what they have promised time and time again. If the builder sales rep isn't willing to help you get your money back, go to the sales manager, thier manager, etc. if necessary. If you have been promised something that they can no longer provide you should be able to receive your earnest money back. Paperwork, persistence and patience will be extremly helpful in all of this. Hopefully you have a realtor, they can help you with all of this.
Web Reference: http://www.ilonapoka.com
2 votes Thank Flag Link Tue Sep 11, 2007
Just got an email from my agent...

"I spoke with her (builder's broker) yesterday and explained your situation. She understood perfectly your issues about the home not being your dream home.

I never did tell her about keeping your money (towards future home with them), but I did emphasize that you all want to buy a home from them in the next year or two. She would like to keep you happy.

She said that she needed to just do some research to find out how much money they have already spent on your behalf. This would be for plot plans, etc."

Thanks all - I'll let you know what happens as things unfold. Guess we're in the negotiation stage. Any further advice or comments are welcome. Looks like we're on the home stretch and it was a lot easier than I thought. But - we'll see what they think they should keep. They have $19,000 of our money. $2500 of it was in excess of what I needed to send them which was $15,750.
1 vote Thank Flag Link Wed Sep 12, 2007
HI Mbll,

Thanks for the vote! It sounds like you have a well thought out plan. The builder actually has the oppty to build good will with your agent here, and the positive spin could result in exposure to other Reatlors and their clients. Knowing which builders are honorable and fair is important to Realtors. You stated that your agent is new to AZ. Her past experience, and developed skills, from real estate or other walks of business will be helpful in her ability to convey to the builder why it is in his/her best interest to find a solution that is acceptable to you.

Please do keep us posted. I speak for all of us when I state that your feedback and updates are greatly appreciated and an incentive for us all to participate on Trulia.

Best Regards,
Deborah

PS Tks, too, to Ed to for his support to all Trulians!
1 vote Thank Flag Link Wed Sep 12, 2007
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
Ed - Yes there are some great answers here and I fully intended to "give credit". Give me time here ;-) I just logged on this morning and found all these amazing and thoughtful comments.

First of all - Thank you all so much for your input. I do have an agent, and although somewhat new to Arizona, she is also a friend and I feel she has my best interest at heart. She plans to speak with the head broker/salesperson today. I have plan A and plan B. First being that she ask for a portion of the money back and account in writing for exactly what they feel they "spent" and therefore deserve from the deposit. If, for instance, they put down cost for obtaining a variance.. no go. The variance's were due to their mistake, not mine. No materials have been bought nor concrete poured but I can see some money going towards the design center. I won't be happy with money going towards the salesperson for the builder because she is totally useless and I do have emails that provide a paper trail.

If that doesn't work - I will speak with them or have my agent speak to them about putting money towards a future house or let them take the earnest money and write up an agreement where X dollars go towards upgrades at the prices I have today. Prices won't increase much in 2-3 years.

If that doesn't work, I will write to the president of the company who touts in all their materials about how important it is to make their customers happy. If that doesn't work - I'm going to get a lawyer. I'm one to use a lawyer as a last resort.

In any case I will certainly come back here to let you know how it worked out. I've given my agent all the info you guys have given me. Thanks again!!
1 vote Thank Flag Link Wed Sep 12, 2007
Several good answers here. Please review and give credit where credit is due.
1 vote Thank Flag Link Tue Sep 11, 2007
I like your attitude about wanting to work with the builder at a later time. Be sure to let them know this is your desire. I am glad you are working with a Realtor. They can negotiate on your behalf. If they can't give you what you asked for and they are not willing to work with you, I would say you are better off not doing business with them.

I wish you the best and hope it works out for you! Let us now how things turn out.
1 vote Thank Flag Link Tue Sep 11, 2007
Thanks Ute - My agent is talking to them today to see if they will negotiate. I hope they agree because I want us to have a win win situation so I can go back to them in the future to build the size home we want in another location. I love their homes and the quality of work. It took me 3 - 2 week vacations in Arizona to find my dream house and if they don't try and work with us on this - I feel like I wouldn't want to deal with them again. Just a matter of principle. It is a lot of money they are holding and since no work has started, I think it is only fair. If they refuse, I am going to have to run this by a lawyer and see what our rights are. I'd rather work things out with the builder and do our dream house with them down the road.
1 vote Thank Flag Link Tue Sep 11, 2007
It sounds like they have been trying to work with you on resolving the other issues that have come up in the past. Have you asked them about cancelling the contract? I would think they'd be happy to let you out and give you your earnest money back. The house they can build for you just does not seem the right fit for you. Good luck with that.
Web Reference: http://www.go2kw.com
1 vote Thank Flag Link Tue Sep 11, 2007
Ute Ferdig -…, Real Estate Pro in Newcastle, CA
MVP'08
Contact
Just wanted to come back and thank you all for your advice and let you know the outcome of my problem. The builder has refunded all but $2,000 of our $19,000 and to top it off is offering that if we buy with them later on they will put the $2,000 towards the purchase of a new build. With all the bad stories on the internet about builders - I will tell you that Avatar Homes rocks! They have obtained our complete loyalty and You guys rock too!
0 votes Thank Flag Link Fri Oct 19, 2007
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