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 Dear
Steve,
I recently bought a new home and moved in less than three months ago. Since then, the builders have dropped the base purchase price by more than 15 percent on other homes in my subdivision! I am furious. Is there anything I can do about this?
-- Bob L.
 Dear
Bob,
Unfortunately, this type of thing is happening
all over the country as builders try to bail themselves
out of excess inventory and cash-flow problems
and minimize the dire results they're posting
for an increasingly skeptical Wall Street.
Builders are, in effect, resetting
the market by using such maneuvers. This in turn
can affect pricing of the balance of an area housing
stock if pervasive enough -- particularly in areas
where there has been significant new construction
in the past few years. More and more, MLS listings
and for-sale ads commonly state, "Builder
Dropped the Price!" This isn't what you wanted
to hear I'm sure.
A class-action lawsuit dealing with this type of situation
was filed in 2005 against one national builder
by approximately 100 homeowners, claiming financial
losses when the builder dropped home prices as
much as $100,000 in several Las Vegas-area subdivisions.
But that suit, which alleged the builder misled
buyers about the value of their homes and the
types of communities they were buying into, was
dismissed a few months after it was filed. Several
homeowners have since refiled in separate cases.
If you felt you were deceived in
the sales process, you might be able to follow
this legal route, particularly if a sizable number
of other home buyers were treated similarly, but
I can tell you it will be a tough road. However,
if the builder made specific verbal or contractual
promises implying a commitment to keep home prices
at a certain level in your area, you'd have more
grist.
This brings up a couple of related
points. Lenders don't like to see this kind of
thing because it has a negative impact on the
values of area homes on which they have already
lent. Secondly, I'd be curious to know if you
used your own agent in this transaction. When
buying a new-built home, many people don't, which
in these times can be a mistake. Most credible
buyers' agents, when assessing a possible client
purchase, should realize this type of price-slashing
is occurring and advise their clients accordingly.
It is their fiduciary duty to do so. However,
these types of oversights and (or) code-of-ethics
violations are tough to remedy, as well.
For readers pondering the purchase of a new home at this juncture,
be wary that this price-slashing practice is ongoing.
As for you, Bob, I certainly don't begrudge you
your outrage. I suspect you'll do more homework
next time. Better luck to you in the future.
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