Profile picture for AmitavaBasu

Need help to get back earnest money

We are first time new home buyers and signed a contract with a builder by paying $5000.00 earnest money. The house supposed to be built in plot in a condo community. In an addendum the builder promised and signed that there will be gas connection. The contract was signed 7 months back. There was no timeline for delivery only "within a reasonable time" was printed.

Every alternate week we visited the site, found hardly any construction going on. Every time the sales representative said in next 3 weeks start road construction. 6 months were gone. No construction only some sewage pipes were laid. After 6th month, the builder called us and informed that there will be no gas connection and tried to explain us about all-electric homes. Also informed that if we do not agree, we can walk out of the contract will get back refund. All happened verbally nothing given in writing. By this time housing market got better and prices increased.

Considering the delay and inability to deliver on promises we decided to walk out. We called and also send email to inform our decision.  They told it will take 30 to 45 days to get refund and will send form to sign. Several days passed no information. I noticed that they increased the price of the same plot 10% without promising me any refund.

We want to get rid of this non trustworthy builder and their contract as quickly as possible, and get our money back. What step we should take? Is there any known process / form I need to fill up? How we can inform our decision in writing and get back a written promise? Will this be only done by an attorney or we ourselves can do something?

Thanks in advance
  • September 04 2013 - Austin
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (10)

Profile picture for Joanne Knauf
You could wait and continue to act in good faith, but I am not sure your builder is doing likewise. I believe that your best course of action is to retain the services of a good attorney.
  • September 07 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

You need to have an attorney review your options with you. The builders contract can have all sorts of caveats in them and you need to know what your liabilities are.
  • September 07 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

It's not uncommon for builders to raise their prices.  Actually, it happens all the time.  The market has changed.

It is also not uncommon for the earnest money to take up to 30 days to get refunded.  When did you sign the termination form?  you only mention that several days passed.  Is that days after the 45 days they told you it would take?  The response would depend on what happened here.

Naima
  • September 07 2013
  • 2Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

To me your last response seems to show that you are on the right track.  I wish you the best of luck
  • September 05 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

You should probably consult a real estate attorney or at least instruct the builders you plan on doing so if you do not receive your money immediately.  That may help them get their act together.  It's always good to use an agent when you buy a house even from a new home builder.  Their representatives are always looking out for the builder and the more you pay the more commission they make.

It's also odd that they would not start construction.  That leads me to believe there are other issues with them. Obviously there is a lot of missing information but from what you said I would recommend you give them a specific timeframe to return your funds in full your you will obtain an attorney and take whatever means necessary to get your earnest money and any possible damages back.  Let's face it, interest rates have went up over a full point so any home you buy now will end up costing you thousands of dollars more over the life of the loan.  All I can say is use that as leverage and if they still delay then speak with an attorney.

Hope this helps.
  • September 05 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for AmitavaBasu
Thanks everyone for advice.

I think there is no separate corporate office of the builder. BBB does not list this company formed in 2011. When we visited their local office, found only two people, whom I already know. I only aware of another person who is the Chairman.

It seems I have to consult an attorney and send official letter that we are walking out of the purchase deal. and expect back our refund. And wait for written response, whatever it may be.

In the mean time we cannot wait as the prices are going up, so we will go ahead looking for our new home through a Realtor and book if we found something suitable.

Thanks again.
AB

  • September 05 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for The LaPeer Team
Welcome to builders' contracts in TX! Almost every one that I've seen is written in favor of the builder. There are lots of open-for-interpretation verbiage such as "reasonable time" which is always short for the buyer and as long as needed for the builder. Have you tried to contact the corporate office? Sometimes you can get them to do something. At least your chances are better there. And there's always the Better Business Bureau. Builders hate to see bad reviews. It is unfortunate what has happened to you but not uncommon.
  • September 04 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

If there is an agent you can contact to see what your local/state laws are, start with that. I imagine though, that you are going to end up getting an atty involved.
  • September 04 2013
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for nwhome.us
Or contact the closing agent.  They will give you the correct forms for termination and refund of the earnest money.
  • September 04 2013
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for sunnyview
You need legal advice ASAP. In my state, your cannot alter a written contract verbally. Do not rely on phone calls or conversations with this builder or any builder. Keep it all in writing.

I would pay for a 30 minute consult with an attorney. That will cost far less to have them look over your contract and make suggestions than going it alone and risking your earnest money.

Also, consider asking your question on a legal forum like avvo.com. Attorneys there with answer one legal question for free and you can also look through attorney profiles to find a real estate attorney in your local area. 
  • September 04 2013
  • 5Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.