Before you read this post, please be aware that my wife and I did not enjoy our first year of Ryland Home ownership. See "My Last Ryland Homes Blog Post & My Attempt To Help Ryland Homes!" to get a better overview of our Ryland Home complaint to the BBB, and links to the over 100 Ryland Home problems that were all eventually fixed after 13 months of having much of our time wasted.
What difference does it make to the Ryland new home customer if Ryland Homes reduces the price he's agreed to pay before he closes escrow (as depicted in unfinished house photo above) or just after? None! (2/7/08 Update: It may make a big legal difference to any new home builder though, as a title insurance officer in Tx. recently informed me. Since the home's loan, especially if there is one from Ryland's own lending division, is based on the original selling price. Therefore, a post COE refund/rebate could present problems for the home builder with all the "sub-prime" lending allegations going around . Instead of Ryland being the "good guy" in wanting to do the "right thing" by its recent home buyers, they could be incorrectly perceived as the "bad guy" who interferred with the loan amount to "value/original selling price" relationship!) The customer still wants what Dana Rogers (VP of Sales and Marketing for the Las Vegas area) said is most important in this 1/19/08 article: " 'We asked hundreds of customers what was most important to them and they said they wanted assurances they were getting a great value and that they would be protected in the event of price or rate adjustments,..' ".
Well, Ryland Homes just reduced the base price of my new home by $9,000 within 18 days of my closed escrow, and I sent off this e-mail to Don McDonough and Pat Recio, with copies to Chad Dreier (Chairman of Ryland Group), Gordon Milne (CFO of Ryland Group), LT Nichol, and Eric Elder. These are all Ryland managers who should have some say in repeating the price protection that may have been given Ryland homeowners in my development who had already closed escrow , sometime around May of 2007. (2/7/08 Update: There's now, all of a sudden, seems to be a possibility that I misunderstood some of the many people that I spoke to in my development. The rebate or refund may not have happened at all, and there may only have been a downward price adjustment BEFORE they closed escrow. I will do more research on this.)
I said something like this: "My wife and I are closing on a new style house in S.C. on 1/18/08. We are Ryland Home fans, because when I found out from a current Ryland home owner that had already moved in that Ryland (without the homeowners having to ask) gave back the difference between the new lower sales price and their (already paid) higher price, I knew that Ryland had INTEGRITY (Merriam Webster's Most Looked Up Word for 2005 = http://www.m-w.com/info/05words.htm). We are counting on that same kind of INTEGRITY, as we close escrow next month with Ryland at possibly a little higher price than market value...... I am sending this to you (Gordon Milne), because I read what you said in this 12/20/07 article, "The Current State of the Real Estate New Construction Market": "There is definitely a lot of discounting going on in some cities, Milne says, adding that many builders are offering 5 percent to 20 percent in incentives and price cuts, depending on the community." It goes on to say, "It's hand-to-hand combat out in the field, Milne says. We look at the competition down the street, what they're doing, and we've got to match it."
Please let us know ASAP if my wife and I will be getting a check back for at least the $9,000 difference in base price. If the upgrade/option pricing that we paid has been reduced, there is no way for us to know, but I'm sure Ryland's integrity will make sure that Ryland's recent customers have price reduction protection on everything that they just paid to Ryland Homes."
Time will tell, and I will report the results either way. What is interesting is that Ryland Group Inc. is now on a general upswing curve with its stock price, as shown with this (RYL) 1 Year Stock Chart . One of the best ways to continue that upswing, in my professional marketing opinion, would be to continue to give "Price Protection" to their customers even up to 6 months after Ryland Homes has the customer's money. (2/7/08 Update: It may hint of illegalities though - but, in my opinion, it would come down to the intent of the new home builder, and I really believe that if Ryland or any builder did do a "refund/rebate" that their intent would only be to have satisfied customers. However, I am not an attorney, and I know it is hard to prove "intent".) "Refunds/Rebates" would assure "great value", and increase sales, I believe. Online POSITIVE "WORD OF MOUTH" ADVERTISING, as well as Ryland customers talking to Ryland prospects would definitely happen (as it did with me).