Breaking up is hard to do, but not so hard these days. Why go through on a sale when by signing the dotted line you'll lose significantly more than your deposit?
Cut your losses they say, and people around the country are doing just that. Here's a great story from the Washington Post on cutting and running in the post-bubble world:
Sold -- or Not: When Home Buyers Walk
As the housing market cools, builders are reporting that more people are walking away from contracts and from tens of thousands of dollars in deposits.
Wall Street analysts say the Washington market is among those seeing the highest percentages of buyers abandoning ship -- more than double last year's rate, according to one research firm, and perhaps as high as one in three new-home buyers in some places. And nationally, some big builders are beginning to report cancellation rates upward of 25 percent.
Despite the pain of giving up that much money, some buyers are canceling to cut their losses because builders are pricing the same houses for so much less, Alexandria lawyer James C. "Beau" Brincefield Jr. said.
"I have seen people literally walk away from $125,000 deposits rather than go forward with the closing because the value of a house identical to their own was being sold by the builder for $100,000 less," said Brincefield, who is preparing litigation for buyers who want to sue builders to get their deposits back.
May 06, 2006
Running away: "Some Will Give Up Thousands to Get Out of This Market"
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6 comments:
good article.....i saw something similar here:
http://thehousingbubbleblog.com/
Toll Brothers gives dim view of home sales
Toll Brothers Inc., a leading builder of luxury homes, said Friday its signed contracts fell 29 percent in its second fiscal quarter, and cut its full-year home deliveries forecast. • FULL STORY
Toll Brothers guides down and the stock has one of its biggest gains in months on Friday.
TOL, TGIC......what's next?
Walking away from a home right now is the best thing you can possibly do! Even if it costs you 200k!!!!!!!
It reminds me of the scene in True Romance where Christopher Walken punches Dennis Hopper in the nose and tells him "it wont get that good again". This is the closest thing to a stop loss RE has, and trust me when 60% of the homes in your market have "reduced" signs on them, and the market has tanked for 10 years, it wont get this good again!
"I have seen people literally walk away from $125,000 deposits rather than go forward with the closing because the value of a house identical to their own was being sold by the builder for $100,000 less,"
I can read that sentence 100 times and not come to terms with its grammar. Glad this guy is not preparing my litigation.
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