[b]Please forgive me if this is not the correct forum to post this on. We are friends with a married couple that needs a way out of a new construction purchase. The home should be built and escrow closing this Fall. They have had some unfortunate circumstances that ate up their savings (medical bills, unemployment, etc.). Now they don’t have money to close! They are faced with using a credit card to come up with the closing costs. Do they have any exit strategies seeing it’s a new construction? Obviously, they don’t want to be several thousands of dollars in credit card debt. Is it possible that they could flip the home to a private investor so they can at least pay off the credit card? Are there any options for them, or are they stuck with this nightmare. Any suggestions and/or options would be much appreciated.
first off, it depends on what they purchase contract says. Is the contrcat assignable (probably not)?
secondly, they should talk with their builder and explain their situation.
Worse case is they walk away and lose their deposit. The builder could sue for non-performance, but damages would only accord if he could prove he had to sell for less money. I would image that in most cases, they would not spend the money or hassle to sue the potential buyers, but rather just move on and sell the house to some else.
Schemes of buying and the quickly selling to an investors may violate the purchase contract and/or mortgage clauses as well as introduce more risk into the equation.
Thank you very much for your input and suggestions. I’ll suggest that they talk to the builder. It’s worth a try…
Most builders I deal with will gladly refund the reservation fee, or pre-construction deposit if the buyer wants to withdraw from the contract.
The builder often gets another property back in inventory that can be resold at a higher price. Win-Win for both parties.