Q & A Table of Contents
Builders Won't Cooperate
From: Bud, Salisbury, Maryland
Question: I plan to build a new home and fund it through an construction loan. I'm having trouble negotiating with the builders because of their price increases just before we are ready to sign a contract. In 2 cases we walked away because they would not change their price back and now 1 builder is suing us for plans & surveys which we have no use for (house was not affordable & did not fit on our lot). It's like the builders always have a win-win outcome.
Response: The last line of your question needs a bit of clarification; a win-win outcome means that the negotiating parties each feel as if he or she has achieved their objectives. I suspect that the point you were trying to make is that builders always win -- to the detriment of their customers.
The attempt of one of the builders to sue you may or may not need to be take seriously. If you signed any sort of agreement with that builder, the agreement can be the basis of legal action. On the other hand, if your 'deal' with that builder was simply a matter of conversation, generally speaking under common law in the United States no agreement with a price/value of $100 or more can be enforced at law without a written contract. I do not have any idea whether this is the case where you are.
Clearly as you explore the possibilities for getting your house built, you need to have a clear idea of the size, price, and other limits before you undertake any further discussions with builders. Ask neighbors, other people you know, and your lender if they have any suggestions to make regarding builders -- who is worth meeting, and who might be a problem.
Right now, in many areas, housing construction is a sellers' market; the builders have more business than they need. Things always change, so perhaps you should view timing as an issue in your planning. Or it may be that you should look for builders from nearby localities or states where business is not quite as good. They may do a fine job, but for a better price. The balance of power in the negotiation process needs to be measured all the time; knowing what alternatives are available helps the balance of power become more favorable to you.
Good luck,
Steve
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