Thread: Sneaky Builder?

Originally Posted by aviator4

Hello - this is my first post to the forum as well as my first home purchase and I'm beginning to ge the idea that my builder is trying to take me for a ride..... here's the scenario:

We've found a house in our local area (the market didn't go belly up here) and just love it!! Afer touring this new house, which is still under construction we contacted the builder via E-mail about the asking price, which turned out to be 199,000 - we politely E-mailed back and said thanks for the informatino but we were trying to be closer to $177,000. He immediatley replied and said he would sell the house for $185 and the we should at least entertain the idea. We told him we would come talk to him but needed to coordinate a time with our realtor (this was the first mention of the realtor) - things went quiet for a while and then we got a call from him stating that, essentially, he couldn't sell the house for $185K unless we dropped our realtor, avoiding the commission. We just love this house and don't want to let it go, but feel he's being a little sneaky about it. We don't have a buyers contract with our realtor.

He's also said that his "bank" is requireing $1500 in ernest money once we sign the contract - is it strange that a bank is requiring this money? We had originally offered $500 earnest on the house.

We love the house, but this scenario is starting to make us uneasy.

As far as I know banks don't require earnest money. He is requesting it but trying to do it in such a way that you will not be offended. This guy is for sure a little slimey. I don't think that it is ever a good idea to purchase without a agent. Especially when it is your first home and you don't know the ropes. $1500 for earnest money is not unheard of so it is not like putting up that amount of money is taking advantage of you. However, the builder has done just that by making you feel that you should drop your realtor. I think it would be wise to involve an attorney for this transaction. You are looking at a bumpy ride to closing the builder is going to try and get as much from you as possible. Another thing even though it is a new house you need to have it inspected. I have seen many cases where people have not had new homes inspected before closing and they regretted it in the long run. There is a great number of major things that can be wrong with a new home. Good luck.

I would highly recommend that you make sure that your title insurance policy covers mechanic liens. I've been saved by this provision many times when the builder went belly-up and stuck my home owners with thousands of dollars in unpaid contractor work.

Best of luck!

It is smart to get a realtor, i see no point of having one on a transaction. Well as James said you need to get an attorney to watch this transaction on the legal space. I think buying your first home will be tricky but you need to at least be cautious.

Booming markets invariably bring with it unsavory people, who try to make some quick money through dubious methods. This is more or less the state of India