Posted on 05/04/2007 7:06:40 AM PDT by sportutegrl
In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them.
Even as many of the new buildings are completed, buyers are filing lawsuits claiming they were duped into purchases they couldn't afford, or victimized through fraudulent investment schemes. Some are scrutinizing their contracts looking for loopholes, or searching out tiny flaws in finished homes that might allow them to back out without losing their deposits.
For some builders, the disputes are contributing to cancellation rates as high as 30% and writedowns in some markets. "People will go to great lengths to get out of a legally binding transaction," said Larry Sorsby, chief financial officer of Hovnanian Enterprises Inc. "They were willing to ride the real-estate boom on the way up, but some are not willing to ride it on the way down."
Newly constructed homes make up only about 15% of total home sales. But a wave of building helped fuel the run-up in housing prices during the real-estate boom, especially in Florida and California. As the market started turning last year, prices on new homes and condos quickly stalled, then began dropping. That gave skittish buyers time to get cold feet.
Florida, a magnet for housing speculators in the boom, is ground zero for such disputes. The state long has been a boon to housing attorneys, some of whom are now filing lawsuits against developers.
(Excerpt) Read more at online.wsj.com ...
Yes, I’d be interested in the anwsers to your questions. Usually to buy a house other than your own residence, you need to have a minimum of 20% down. If you added up all three houses, that would be some seriously down money.
Hillary says that sounds perfectly reasonable. All you have to do is vote for her and you’ll get it.
Not unless she puts something in his pocket first.
Interesting.
Oh, financial ruin....the humanity!
(hope they enjoyed those H2’s they bought with their winnings)
Right on. The wave of building was driven by a rapid increase in demand, fueled by low interest rates at first, and then the skyrocketing market caused by lack of supply (making people decide to jump before the prices got worse).
Once people start making decisions based on inflation (and that’s what these home buyers were doing, trying to beat the inflation in the housing market), the market is generally doomed.
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