There's a high-stakes tug-of-war over new homes. Many people who signed contracts before houses were built are now scared to buy them. Builders don't want them to back out and are keeping deposits.
Paulo Echeverry and Dahianara Lopez Zapata, at their food truck in Kissimmee, Fla.
Late last year, they signed a contract to buy a new home before it was built for about $500,000 and put down a $25,000 deposit. Some people have already lost their money. Karen Jensen works as a school nurse at an elementary school in Tigard, Ore. She and her husband wanted a bigger house for them and their three kids.But after interest rates jumped so much higher they decided to back out of buying it, and she says the builder kept their deposit. At first she felt sad but okay about that. They signed the contract and put the money down after all.
"Most builders are going to be very cautious about just blanket giving a deposit back out of the goodness of their hearts," says Paul Schwinghammer, the president of the Indiana Builders Association. But he thinks builders should make an exception in cases like Karen Jensen's where the builder can sell the house to someone else for a lot more money."If the builder profited from re-selling that house... he at least ought to give the deposit back to that customer," says Schwinghammer."That's just an ethical decision on my part."
He says, though, it never hurts to ask a builder for your deposit back, especially if losing the deposit would be a real financial hardship,"Whether the developer has a heart is kind of what it comes down to."
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