I seek advice about my real world personal scenario. In June signed a construction contract for a new home thinking a bottom was near in housing. The mortgage comes from the same company. I have only $3K invested until I close, probably around 1 December. At that time I could walk, losing most of the $3K. The reason I would consider it is that the company appears to be in trouble and I think there there is a good chance I could simply buy the home by then putting in a much lower bid, saving much more than the $3K. Just curious right now, think it's too unethical?
how is this wall street news? anyway - check this out. A friend of mine was in similar situation but put down 8k. And then another 8k. His construction was delayed from Jan 08 - to Aug 08, to Jan 09 to .... no construction. He was smart enough to set it up so that he could withdraw his money. You should have a heart to heart with the developer to see if the project WILL be completed. Also - if you signed a contract - you need to honor it. Otherwise - its just business.
I don't know if the laws are the same where you live, but where i'm from, you signed a contract, and therefore could be sued in court if you don't purchase the house.
It depends on what your contract says. Have a lawyer take a look at it since you don't know. OldTrader
the contract only says I forfeit the $3K, they get 'walkers' all the time at about a 20% clip these days. I don't see any ramifications other than that.
There is no such thing as "unethical" when dealing with a corporation. A corporation is not a person, it is a faceless legal entity whose sole interest is profit. So play hardball if you can do it legally. I would make an exception if it's a one-man band or something, but if it's a big company then tough shit. You think they'd give you charity if the shoe was on the other foot? This is like asking "I can bluff a guy out of a $3k pot in Vegas - should I do it or is it unethical?". Unless you are playing vs your own grandmother or the Pope, then take the cash.
thanks I'm in a fairly average area of the country and housing seems to have slowed again after a dead cat bounce this spring. For sale signs are being replaced with for rent signs all over the place, the developer I'm buying from fired about half their workforce in August, the house being built 1 block away appears to have just suddenly stopped being worked on. I see a lot more trouble than last year. I'm tempted to use the chaos to my advantage, uncharted territory for me though.
how much does it coost to get your home constructed? is there better value than buying an existing home?
The home costs $190K, existing homes are slightly cheaper however as is the case with most home buying it is a question of lifestyle preference. I could buy a liveable $100K home but wouldn't enjoy it as much. There is actually a clause in the contract that says if the home is appraised at less than 190K then I gotta make up the difference at closing, so I don't think the corporation is exactly in my corner. Also, and very disconcerting, their rates on my loan jumped from 5.8% on friday, to 7.12% Monday, back to 6.5% Tuesday!! My rate is not locked until closing, I can pay to lock in a rate which costs more the further out I am. That kind of crap makes me think the company is in chaos. I know markets are shakey but that is ridiculous.