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Wednesday, June 30, 2010

End of the (new) Road

Well, there's not much more we can do. The FHA approval process is not something you can speed up and Steve the Builder isn't going to wait for it to happen. (meanie).

We got a call back from Howard the Lawyer who talked John through some of the changes Steve the Builder made. We understood most of them, but there was one little thing that we overlooked that was a huge red flag to Howard. This is why we pay Howard the big bucks.  :)

In a standard P&S for new construction, there is a clause to protect the buyers in case of construction delay. This is especially important for us, since the house was supposed to be built throughout the winter. Obviously, there's always storms and bad weather and lots of things that could delay construction. In the P&S, it stated (not sure of the official language) that if there was a construction delay, it was not our responsibility and we wouldn't have to shell out any more money. Our new mortgage would have begun on  January 28, our original closing date. Without this special language clause, on January 28, we would have had to start paying for the new house whether it was built or not. Or, we would have had to go back to the bank and get a new mortgage based on the interest rates at that time, which we have no way of knowing what they would be. We could get into a position where we might need to get a new mortgage thanks to a delay from the builder and the interest rates could be so high, we might not qualify. The language in the P&S prohibits that from happening. Somehow...again, this is how Howard explained it and we believe him.

So, when we sent the P&S back to Howard for review, already knowing that we didn't like the date thing, the fact that Steve was going to release the hold on the lot, and that wouldn't agree to the holdback, we hadn't even seen the language that protects us from losing money in case of delay.

Know why we never saw it? Because Steve the Builder TOOK IT OUT. Just deleted it. Basically said, if I'm late, oh well, it's on you. If the house isn't done by Jan 28, too bad, you still have to pay for it.

Howard was really annoyed that he just deleted it and said that is NOT standard for new construction. What's the incentive for the house to be done on time? Nothing if you are already getting paid for it.

Howard's official response was, 'Wow, talk about wanting to have your cake and eat it too".

His legal advice was not to sign. We didn't. :(

John immediately emailed John the Agent who was on vacation with his lovely wife, Margot the Agent. They were scheduled to fly back from their trip to see their grandkids Tuesday. We got a call from John while they were waiting to board their flight! Talk about good customer service!

John told John the Agent all about what had happened (including that of the 3 people that came to see the condo last week, none had given any feedback) and that we were thinking we were done with the whole process. We had no choice thanks to the stupid FHA thing and the condo not selling. He understood, but seemed a little annoyed at Steve the Builder's actions. Clearly, this isn't our fault, we aren't doing anything wrong, we just became victims of the FHA process and mortgage crisis that still seems to be going on.

John the Agent is going to talk to Steve to see if he's willing to be a little nicer about this whole thing, and if he's not, if he'll honor our house plans if we just decide to wait until Phase 2, which should start construction sometime in late fall. They will be installing the sewer lines and clearing the new street first, then homes should be starting in early 2011 with a 4-6 month construction time. Who knows, though, the prices could go way up. We'll see what he says about that. And really, at this point, do we even WANT to wait another year??

Margot the Agent thinks we should keep the condo on the market just in case, but we're not sure we want it to sit for that long. She's supposed to be calling us today to talk about our options and give us an update on the FHA approval process. We are thinking about asking her about rent-to-own options, or just simply renting it out.

But, after all this hassle, we are seriously considering just taking it off the market, spending the next 4-6 months getting rid of car payments and student loans and starting our home search fresh after the holidays. Either with a totally new house, or maybe with Ridgewood's Phase 2. (Summit Street)

Maybe things will be a little easier, or they will be cheaper. I'm sure the FHA process will be completed by then.

Famous last words...

1 comment:

  1. I'm sorry to hear you're having so many problems with getting your new house. Maybe this is happening for a reason and the house that is perfect for you is just around the next bend. As far as the builder, I think I'd be looking for a new one. In this economy, the builder should be bowing down to the consumer, unless he has an extreme amount of business, which I don't see given his practices. Good luck, and believe that God has something special in mind for you!