I got a quick answer to my request for a refund of $9,000 (See "Will Ryland Homes "Price Protection" Continue?" from a manager at Ryland Homes. He said: "We did just lower our price's of our homes here to try and generate more sales and traffic. Per our contract, we reserve the right to change our pricing and marketing strategies as we deem necessary. I do understand your concern but please keep in mind, once things begin to pick up, we will once again begin to raise pricing on our homes. With all this in mind, Ryland will not be refunding any of the difference in your base price and our new base price."
While this is NOT what I wanted to hear, I was given a quick answer, and I now know that there may be legal a problem for any builder to give a "refund/rebate" to their "already closed escrow" customers. However, the possibility of any new home buyer having the value of their recently purchased new home going down thousands of dollars due to a price reduction soon after close of escrow is a real problem right now for both the buyer and the seller. Another possible problem with Ryland Homes or any builder is the quality of "home readiness". Make sure you read "My Last Ryland Homes Blog Post & My Attempt To Help Ryland Homes!"
In my area of the United States, this 1/23/08 article "Fall in MB Home Prices Forecast" says that a 2008 report from PMI Mortgage Insurance Co. is predicting that there is a 56% chance that prices will be lower in two years. So what is a new home buyer, and a new home seller to do? If you are a buyer, you may want to offer a lower price for a new or resale home no matter what the asking price is. If you are a seller you may want to offer some big incentives that mean real savings. Resale home sellers may want to take their home off the market, or be ready to accept a much lower price depending on the local market you are in.
On top of the pricing quandary, there is the possibility of cost cutting going on at all new home builders. This could affect how the new home is delivered. It could be a matter of how many legitimate structural and cosmetic complaints the new home buyer has, or just less variety and lower cost materials being used. This 1/28/08 Indianapolis Indiana article "Battered builders retrench" says: "California-based Ryland Homes has cut about 20 percent of its work force the last two years, and now employs 75 locally." This 1/3/08 article "Lowly Faucet Gets A Whack As Home Builders Take Ax To Costs" says: "The savings potential goes beyond simply substituting lower-quality kitchen cabinets or cheaper carpet. Limited the number of faucet styles, for example, lets builders order earlier and negotiate bigger bulk discounts from suppliers."
I'll be blogging about my Ryland Homes new home buying experience soon, as it relates to how my new home was delivered at the time I closed escrow, and how over 60 repair items (mostly cosmetic, but some structural) are being handled.
1/9/08 Update: A good friend of mine who is about to buy a new home in the Myrtle Beach area of SC does not like having no price protection after he closes escrow. So, he has decided to offer a builder, other than Ryland Homes, a price even lower than the newly lowered price set on a "quick move in" home. He feels that he has the most price protection that way.
Comments