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geo123 said:   CptSavAHo said:   geo123 said:   CptSavAHo said:   I showed this to my agent today, he said you're screwed. All the finance guys at our closing table had a good laugh too.With all due respect to your agent and the "finance guys at your closing table," but there is no possible way for any of them to conclude that the OP is or isn't "screwed" without seeing his contract and knowing a lot more about the situation.

By the way, even if they did see his contract, there is a good chance that none of them would be able to offer any intelligent commentary regarding it, as analyzing and interpreting contracts is completely outside their expertise.


Granted they don't write or litigate contracts, but they've seen enough new construction contracts go sour over the last 4 years they have a pretty good idea of what's in the contract and how hard it is to get out of. Correct its a broad generalization, but it also happens to be true.
I hate to say it, but it actually can't be further from the truth. There is no such thing as "the contract," as all new construction contracts are totally different from each other. So, they can't possibly know what's in the OP's contract.

Further, not only do they not write or litigate contracts but, most importantly here, they don't analyze and interpret contracts and it would probably amount to a criminal offense for them to do so. Hence, they can't possibly know not just the OP's options and the builder's remedies under it, but also have no idea whether it contains any ambiguities, clauses that are unenforceable, etc... There is essentially no such thing as a bulletproof contract and there are lots and lots of ways of attacking all contracts. This is not to say that it will be cost effective for the OP to do so, that he will necessarily prevail (for better or for worse, these types of attacks often have little to do with prevailing) or even that it is a good idea, as the only person who can make this assessment is the OP in consultation with a competent lawyer in his state who has taken the time to review and understand his contract. My only point here is that there is no possible way for your agent or the "finance guys at your closing table" to offer any even semi-intelligent commentary regarding the OP being or not being "screwed."



All contracts have some "standards". These RE Contracts all have same/similar clauses. ONLY thing you can do is fudge financing. RIGHT NOW get going on applying for dozens of credit cards. Max them all out and move the $$ into a savings account preferably one of a HH member. This will cause DTI to skyrocket and you will be denied financing. IF you have financing clause (if you don't you are a really big idiot and don't deserve to have a computer - much less a house), then they will simply release deposit and nullify the contract. It's been done before..

alamo11 said:   All contracts have some "standards".The concepts may be similar (or they may not be) but the implementation of those concepts is completely different. Hence, the reason that some lawyers charge $100/hour and some charge $1,000/hour -- the difference in implementation and verbiage makes all the difference in the world.

RIGHT NOW get going on applying for dozens of credit cards. Max them all out and move the $$ into a savings account preferably one of a HH member.OP, even if you have a financing contingency, with all due respect to alamo11, please do not follow this advice without speaking with your lawyer first. Following this advice can actually make the OP's situation a lot worse than it is now.

geo123 said:   alamo11 said:   All contracts have some "standards".The concepts may be similar (or they may not be) but the implementation of those concepts is completely different. Hence, the reason that some lawyers charge $100/hour and some charge $1,000/hour -- the difference in implementation and verbiage makes all the difference in the world.

RIGHT NOW get going on applying for dozens of credit cards. Max them all out and move the $$ into a savings account preferably one of a HH member.OP, even if you have a financing contingency, with all due respect to alamo11, please do not follow this advice without speaking with your lawyer first. Following this advice can actually make the OP's situation a lot worse than it is now.


What can they do? You are in new CC debt - you can't afford the house. It's been done before.

alamo11 said:   What can they do? You are in new CC debt - you can't afford the house. It's been done before.I completely agree that it has been done before. This doesn't make it a particularly safe idea, although the amount of risk will vary situation to situation.

What you are proposing exposes the OP to the risk of bad faith litigation, which means that he could potentially be on the book for punitive damages and the builder's attorneys' fees (not to mention his own defense costs). Getting a friend/family member to assist him in this endeavor can expose that person to claims of tortious interference.

Developers/builders are usually very comfortable with litigation and don't exactly shy away from it, as litigation is extraordinarily common in real estate development. This doesn't mean that they will just sue residential buyers at the drop of a hat but if they are concerned about a walkaway situation setting a bad precedent for them, are feeling particularly vindictive and/or expect good recovery, quite a few of them will promptly raise claims and, if necessary, will aggressively litigate this issue.

Most importantly, even assuming that the OP does have a financing contingency in his contract, he most likely has strategies at his disposal that will expose him to far lower risk and are a lot more effective than the "run up your credit cards, so that you intentionally fail to qualify for financing" suggestion. The only way to know for sure, however, is to get his contract reviewed by a competent lawyer, as the answer is going to be extremely fact specific.

bberris said:   chocula said:   Always use a buyer's agent.

Doesn't a buyer's agent get a commission based on sales price? So how can he be said to represent the buyer? He has every incentive to get the price up both to get the deal done fast and to get a higher commission.

That said, at least the conflict of interest is not as high as when a single broker is on both sides.


A seller's agent represents the seller and must look out for their best interest.

A buyer's agent looks out for the buyer and has to work in their best interest.

You should read Freakonomics. It explains why RE agents could care less abotu the price of your house. They just want a quick sell.

Wow - there is a lot of noise in this thread!CptSavAHo said:   There is NO ISSUE WITH THE APPRAISAL. The appraiser can add value to yours or to comp sales in the area they do not have to strictly use sold home prices and price by sqft to calculate comps...Funny how you can tell that there is no issue with an appraisal that you haven't seen. I suspect that the OP (and you) are confused about the appraisal methodology. While it is true that an appraiser can make adjustments to the comparable sales figures based on differences between the properties, the appraisal will still list the actual sales price as the starting point. The OP says (vaguely) that the sales prices are not accurate, but I too suspect that he may be looking at the adjusted comparable sales prices.

OP - can you post a copy of the comparable sales section of the appraisal with the identifying information blacked out? It should look like the top of page two on this
Uniform Residential Appraisal Report

workindev said:   I don't see how the appraisal is the issue here. You signed a contract to buy the house at a certain price. Getting them to change the appraisal doesn't change the price you already agreed to pay in the contract because there is no appraisal contingency. Next time I'll bet that you will be a little more careful before signing a contract.this. If anything, they're doing you a favor, ensuring you aren't stuck buying a house that you can't get financing for.

Any claim of fraud would be on the bank's end, who is now approving a loan based on an inflated property value. You agreed to pay the inflated price regardless.

Though I don't think its the buyers/OPs fault if the sales price doesn't match, an appraiser makes adjustments to the variation in properties to formulate an opinion on price, just a professional opinion.. Keep in mind the builder can raise a lot premium by that much money overnight... They adjust the price to market conditions. Also keep in mind that a house that sold/ closed with in 6 mo's , likely went under contract 3-6 mo prior. So the sales price may be a year old.

I didn't see any comments on the RE Agent having a conflict of interest and /or breach of fiduciary duty. If they are getting a commission from the seller that must be disclosed and you must be advised of that. This has been the law since FIRREA was passed in 1989. Check the state board of realtors.

I got screwed by a realtor 7 years ago so I decided not to go with one when I was purchasing a new construction recently (settlement is next week). I actually have a friend who is a realtor but I still decided against going with him. I also did not go with an attorney either. From hindsight, I should have at least seen an attorney to review the contract before I signed it. Even though I wouldn't say that I got screwed this time around too, I could have negotiated better if I had someone who was more knowledgeable in new construction than me. I did do some negotiations myself and also was credited with half the amount my realtor would have been paid. When I as ready to sign the agreement, they had started selling each unit for 15K more than was advertised previously but I was able to get at the price before the increase. So it seems it is not uncommon for the price to change in a relatively short period of time.

I did all my research in terms of what to negotiate for and getting a better understanding of the whole process. Even after all the due diligence I still was not able to get the seller and the mortgage company to drop some junk fees or make some concessions. If I have to do this all over again, I will pay an attorney the fees to at least review the contract for me and consult with him throughout the process.

OP, I signed my contract when the price was going for 36K less than they are selling the same floor plan and sq. ft. NOW. So, it is quite possible that you're paying more now because you did not catch the early bird. But I do agree with what most people have already said that if they are indeed fudging the sales values of the comp properties in the appraisal, then that is FRAUD. After reading all the posts in this thread, I went back to review my appraisal and checked the county records to compare the sale prices of the comps used for the appraisal and every single one of them had exactly the same value as the county records. I think you have a case there and perhaps, just pointing this out to the seller should put some fear in them to modify your contract for you.

subscribing.

Did the OP ever even come back to this thread?

99% of appraisal questions are simple cases of buyer's remorse.

Fact is, if the house is for you to live in, who cares what the appraisal is? Doesn't change anything about the house. Conditions could be completely different if and when you sell.

Now if OP in the back of his mind thought he was getting some bargain he could flip for big money, then he's just gotten a very expensive education on how real estate works.



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