Back out from purchase agreement

[YellowFever]

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[Irvinehomeseeker]

yes,developing a cold feet now....

I made a reservation for a plot 3 days ago @piedmont and tomorrow is day to sign contract, but certain considerations came up yesterday that has  put me in a dilemma . I have less than 12 hours to make the final decision :-[

 

[YellowFever]

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[Irvinehomeseeker]

Thanks for this info!!

I really liked the plot and location, but I may not be able to move forward in the current phase as desired. If I wait for later phase, I will have to pay more and may not get the desirable plot, but that's life I am hoping that things will be sorted out and I should be able to make a better informed decision in 3-4 months time.

Thanks again for the valuable info on this forum

 

[Bullsback]

yes,developing a cold feet now....

I made a reservation for a plot 3 days ago @piedmont and tomorrow is day to sign contract, but certain considerations came up yesterday that has  put me in a dilemma . I have less than 12 hours to make the final decision :-[

You should be able to back out and get the $25k back.  And then they should still be able to contact you again for another phase. I backed out of a deal but I told them to keep me on a waiting list.  Today, I just received an email from the sales office for another phase.  (Not Piedmont).  So, it does seem like they aren't prejudiced against people who have already backed out.

I think the reality is, a lot of people who end up buying, have backed out at some point in times, sometimes in the very same project (where at one phase they weren't ready, but a couple phases later and they got comfortable). There is a lot that goes into such large purchases and with that, you tend to have waves of is this the right decision / isn't it.  I don't think I've ever bought a property where I didn't have a wave of is this the right choice, is it not...sometimes I went through, but there were a couple times I backed out.

 

[Bullsback]

Thanks for this info!!

I really liked the plot and location, but I may not be able to move forward in the current phase as desired. If I wait for later phase, I will have to pay more and may not get the desirable plot, but that's life I am hoping that things will be sorted out and I should be able to make a better informed decision in 3-4 months time.

Thanks again for the valuable info on this forum

If you end up paying 10-15K more later on (or even 20-25K), it isn't that big of a deal considering how large of a purchase it is.  I don' think anyone will look back at a home 15 years later and complain about the extra 10 or 20K they spent on the home. If they are complaining, its cause the market went belly up and if that happened, the 10-15K difference, while nice, probably means little in the grand scheme of what happened to cause such a large crash. 

 

[YellowFever]

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[Tbharvey]

Mainlanders...

You just broke your own rule!

 

[Irvinemonk]

Anyone have experience of backing out after all the upgrades were selected? If so were you able to get back the earnest deposit and the upgrade deposits?

 

[BruinDoc]

Anyone have experience of backing out after all the upgrades were selected? If so were you able to get back the earnest deposit and the upgrade deposits?

Generally I think it will be tough. Some builders might for extenuating circumstances, such as job loss or death in the family. But if it's just changing your mind then the odds are against you. Unless they are able to find another buyer to take the contract, then it might mitigate their damages and maybe they'd refund some of the deposits.
Has something dramatically changed for you?

 

[irvinehomeowner]

Anyone have experience of backing out after all the upgrades were selected? If so were you able to get back the earnest deposit and the upgrade deposits?

Generally I think it will be tough. Some builders might for extenuating circumstances, such as job loss or death in the family. But if it's just changing your mind then the odds are against you. Unless they are able to find another buyer to take the contract, then it might mitigate their damages and maybe they'd refund some of the deposits.
Has something dramatically changed for you?

What would irritate me is if the previous buyer had to pay for the upgrades when they backed out and then the builder charged me for them as a "premium upgrade" even if they discounted it.

I've seen this before where homes are their quick sale list have had flooring or cabinets already installed and on the price sheet they show base pricing plus the upgrades cost as the price.

That's when you should ask why the upgrades were done just to make sure they aren't double dipping.

 

[rickr]

Anyone have experience of backing out after all the upgrades were selected? If so were you able to get back the earnest deposit and the upgrade deposits?

Generally I think it will be tough. Some builders might for extenuating circumstances, such as job loss or death in the family. But if it's just changing your mind then the odds are against you. Unless they are able to find another buyer to take the contract, then it might mitigate their damages and maybe they'd refund some of the deposits.
Has something dramatically changed for you?

I was in same situation with Taylor Morrison in 2012. As much as I tried, I lost my deposit. I considered having a fake letter stating I was part of a lay off but didn't feel like dealing with it. In any case, I was out $10K

If you are close with your boss and HR, you might be able to convince them to lie for you.

 

[eyephone]

Anyone have experience of backing out after all the upgrades were selected? If so were you able to get back the earnest deposit and the upgrade deposits?

Generally I think it will be tough. Some builders might for extenuating circumstances, such as job loss or death in the family. But if it's just changing your mind then the odds are against you. Unless they are able to find another buyer to take the contract, then it might mitigate their damages and maybe they'd refund some of the deposits.
Has something dramatically changed for you?

I was in same situation with Taylor Morrison in 2012. As much as I tried, I lost my deposit. I considered having a fake letter stating I was part of a lay off but didn't feel like dealing with it. In any case, I was out $10K

If you are close with your boss and HR, you might be able to convince them to lie for you.

Someone told me, most company logos are on the internet.

 

[YellowFever]

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[irvineempathy]

@Biku:

Have you talked to the sales staff at Helena? For new homes, most sales offices will give you back your deposit if there hasn't been much done on the house (which for a month's time shouldn't be too much). And usually they will only deduct any design center work you did, so you should ask them first.

As for whether or not you should stretch, that's really up to you as only you know your finances best. Personally, from my experience, I've stretched every single time we purchased and in the end, it turned out to be a good decision.  There was even one time where we stretched and then sold because we didn't think we should continue stretching (this was during the 07-09 crash) but in hindsight we would have been okay had we not sold.

What will you do if you don't buy Helena? Will you purchase a less expensive home? Rent? That should also factor in.

From my experience in lending, the easiest way to back out is show you are "financially unable" to qualify for the loan.  You already mentioned you are at 17% downpayment and already stretching...might as well make some of those funds disappear saying "emergency funds" or you need to use it for something blah blah...get a letter from wells fargo (I assumed the preferred lending) saying this customer doesn't qualify and 100% you will get your deposit back.  Secondly, as long as they can find someone else to buy the property (usually before you pick your options) It's fairly easy to get your deposit back as well.  Back YEARS ago, I put a deposit down for Santa Maria in Stonegate, and same story, they held my deposit hostage until escrow closed.  Key is don't lose $25k whatever you do, visit them daily, get them annoyed at you, threaten them etc

GOod luck!  I've been a supporter of eastwood for a while on here.  Helena in particular I think is a winner, if resale is anything like cambria in stonegate, you'll be happy.  I actually put my name down on it for priority list before I bought in Baker ranch, just the timing didn't work out for my 1031 exchange and move in date.  Not a fan of the higher HOA for attached but 1.4% (lower melo roos) Northwood high as home school, and close proximity to zion market, I think it'll be a good purchase in the long run and might be worth stretching the budget for.  I prefer eastwood location vs cypress village east and Portola springs III as well. 

On a side note: I don't know your financial situation at all, but with your type of income, I'm surprised you are only at 17% downpayment.  Most of your problem stems from having not enough downpayment, if you had 25% downpayment, I doubt you would feel much stress at all.  You make ALOT more than me but your savings are not as much.  I would create a chart of all your bills and spending and see if there's anything that you can budget out (do you eat out often vs cooking? car payment? loans?)  With your type of income esp combined, you shouldn't need to feel like you are stretching at all, just my 2 cents

@irvinehomeowner - I haven't talked to Helena sales office yet. I wanted to get expert opinion(s) before I take my next step. In case I want to back out, I don't know if I should give them a false relocation letter or just make funds disappear saying "emergency funds" or come with something similar.

It may sound rather strange that I put my name down for priority list in Crestline @ Baker Ranch but per my friends suggestions I enrolled at Helena and decided to go with it. I agree Helena is great location compared to CP east or PS III but my concern is that I reserved the home in the final phases when the prices have gone way up from the initial phases. I am not sure if the prices will go any up from here. I went to Helena 2 days ago and found all the homes in the new phases are available which is rather unusual given the demand Helana has experienced this entire year. Moreover, this plan 2 that I booked is attached on both sides (only garages though) so I am not sure if that's wise decision either. I don't mind stretching and cutting down on all my expenses but don't want end up losing all my savings if things go wrong. I understand no can see future!

Regarding your note on my savings: I am only at 17% downpayment because I invested my money overseas and cannot sell them now to get my money back for various family/personal reasons. I spend with in my limits and have always had control over my expenses.

All - For future, I am inclined to rent in Irvine and invest my savings in buying a home for 275-350K (in Dallas area) and put it on rent so whatever I pay towards the home I will get it back in rental income. That way the money I have are put to use. Let me know what you all think?

Interesting post.. what did you finally end up doing?
I have been pre-approved for Petaluma but not sure when I will be offered home.  Even if they offer and I pay my earnest deposit, it would be nice to know if I can get my deposit back (in case I back out after a week of signing the contract)? 

 

[YellowFever]

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[irvineempathy]

Makes sense...would have been better if they had the earnest deposit a bit less...but it is what it is...our fault to have waited so long that the market is so volatile now..

Just worried with the number of homes coming up in five point community and how the house market is getting flooded with new homes...and raising mortgage rates...this can quickly transform into a buyers market

 

[ochomebuyer01]

Anyone have experience of backing out after all the upgrades were selected? If so were you able to get back the earnest deposit and the upgrade deposits?

Generally I think it will be tough. Some builders might for extenuating circumstances, such as job loss or death in the family. But if it's just changing your mind then the odds are against you. Unless they are able to find another buyer to take the contract, then it might mitigate their damages and maybe they'd refund some of the deposits.
Has something dramatically changed for you?

Little off topic - What if we finalize the upgrade options and try to back out from purchase agreement because we like another property. Do you just lose earnest money + upgrade deposit or do you face any legal actions which may cost more?

Can you sign purchase agreement for another property when you are still cancelling this one?

 

[YellowFever]

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[irvinehomeowner]

Anyone have experience of backing out after all the upgrades were selected? If so were you able to get back the earnest deposit and the upgrade deposits?

Generally I think it will be tough. Some builders might for extenuating circumstances, such as job loss or death in the family. But if it's just changing your mind then the odds are against you. Unless they are able to find another buyer to take the contract, then it might mitigate their damages and maybe they'd refund some of the deposits.
Has something dramatically changed for you?

Little off topic - What if we finalize the upgrade options and try to back out from purchase agreement because we like another property. Do you just lose earnest money + upgrade deposit or do you face any legal actions which may cost more?

Can you sign purchase agreement for another property when you are still cancelling this one?

I believe someone mentioned that you have to pay for the upgrades in addition to the deposit.  So let's say the home price was $800k, upgrades like floor tiles, counter tops, RO system, window treatment, is $24,000 and deposit was $25,000.  You will stand to lose possibly $49,000 to walk away. 

It depends but in most cases I've heard of, you usually only lose whatever you put in as a deposit for the upgrades (I think 50%), so you would be out about $12k.

If the builder is nice, they let you walk away with that as they make that up on the next buyer.

It really just depends which is why I said to ask your sales office. I've known a few people who were able to get most of their deposit back even after a month or more because the house wouldn't be ready for a few more months.