How much will I have to finance on a new home after the price dropped?
September 9th, 2009
I signed to purchase a home for $700,000. House will not be done until April 2007. Between now and then, if the prices of the homes drop, will I be obligated to pay what I signed up for or do I only finance what the house is worth at the time?
FYI – contract was signed with a builder. You can not qualify for an amount more than the appraised value, shouldn’t this be reason for them to take the price down? Also, since it is quickly becoming a buyers market, shouldn’t I be able to leverage that and negotiate with the builder? Any suggestions on how I can do that?
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Since you signed paperwork for $7000,000 you will probably be stuck with that price.
It depends on whether you signed a binding agreement or something less than a contract.
If it’s an enforceable contract, the basic price is set and won’t change, and the answer would be Yes, you pay the 700k even if the bottom falls out of the market.
If you can hold the seller to the price even if the market doubles, or if material costs go up so much they lose money on the house, it’s binding and you have to pay the price even if the market tanks.
it is like a marraige for better or worse it is your now your hooked and only legal agreement will change it
Ha Ha
Your are so screwed
the sad thing is your lender will not give you a loan on the purchase price if the appraised value is less. I believe it will be the lessor of the two so if your property appraises for 650000 you loan to value will be based on that not your purchase price so you will have to come up with more money to get the deal closed
if the appraised value will be less,then you agree to pay for this house- you have 2 options: renegotiate the price with the builder or walk out from the contract, because lender will not lend you more money then the house is worth. you have check your contract, because i don’t know how this work in your state, but those are general rules .