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By G. Steven Bray
If you’re in the market for a newly built home, I read an article about an ugly case of buyer beware the other day. When you buy a new home from one of the big homebuilders, you typically have to plunk down a sizable deposit as your commitment to the process. A normal person would think that if the sale doesn’t close, you would get your deposit back.
That wasn’t the case for a number of folks who tried to buy a Toll Brothers home. Instead, Toll Brothers kept the money. The article cited one case of $20,000 and another of $52,000.
Toll Brothers has an affiliated mortgage company, and they incent you to use that company by promising free upgrades only if you use their mortgage company. The problem is the mortgage company never pre-approved the buyers, and the company promised attractive loan terms for which the buyers would not qualify. Once the buyers signed the contract, the company informed them they didn’t qualify for the good loan terms and offered them less favorable ones they couldn’t afford (or no loan at all). Because the buyers already had signed the contract, their deposit money was gone.
It all sounds pretty slimey, but homebuilders have been using the affiliated mortgage company gimmick for years. It’s unfortunate they haven’t faced the same scrutiny for their deceptive practices as the rest of the housing industry.
I’ve included a link to the article at the end of my blog, and I invite you to read it yourself.