Need wisdom during shady deal

One week ago, my wife and I “thought” we bought a new home. Today, it appears that the builder allowed a party to counter our offer behind our backs, even after we signed the contract and wrote them a check for the earnest money.

When we sat down with the builder’s agent, she made the statement, “Someone has just offered us a “low-ball” offer on this home. We have turned down this offer and will only accept the asking price. If you’d like to pay that price, my supervisor has shared that this home is yours.”

So, we signed on the dotted line and handed over the $$.

For six days, we assumed we had bought a home, that is, until a representative from the builder called our realtor with this message, “We’ve accepted a higher bid on the house. Therefore, we did not sell the house to your client.”

A higher bid? You didn’t sell us the house? When did this happen and why are we finding out about it 6 days later?

So, we’re not sure what has really happened, except what appears to be something really shady. They allowed the party who made the “low-ball” offer to counter ours, but, they never allowed us to counter their offer. They told us the house was ours.

Are they legally responsible? The contract we have only has the agent’s signature, but not the supervisor, which is necesary to make the contract official.

So, what wisdom do some of you have concerning this? I know what the right thing is to do, which is for the builder to offer us a home of equal or greater value. Anything less is the wrong thing to do. We have a meeting Monday with the district supervisor, but I feel as if he will try to weasle out of this.

One agent even fed us the story, “We already had a contract on the house from the day before.” However, it was clearly shared to us that there was no contract on the house, only a low bid, and the “supervisor” stated that it was ours…at the asking price.

What say you?

Frustrated in Texas

Shady dealings, indeed! >:(
If you really want the house and want to pursue this, stop wasting your time listening to the Realtors and company people involved in this. No one has your best interests at heart. They are only interested in covering their own backsides at this time.
It would appear your only and maybe best move would be to contact a local real estate attorney, run the details by him/her, and find out if you have any legal ground beneath you. Good luck, amigo!

Unless your offer was signed by the builder, you don’t have a contract. Instead, you have only made an offer. It appears that your offer was not accepted.

Perhaps there are other similar properties available in the builder’s inventory that you might want to purchase. If so, make another offer. Otherwise, take your earnest money refund and move on to another project.

I agree with Dave T.
It seems that they had you sign the contract. They did not sign the contract. Your’s was an offer, and they probably did not sign it, but may have used it to shop your offer, letting others know that they now had a full price offer…your second offer…to be able to get more money. Very unethical. I think if you deal with them at all in the future, present the offer in person and only go under contract if they sign right at the table. If they do not sign right there, do not leave your signed paperwork with them.

Personally, I would not do business with that selling agent.

Chip Hoisington

All three of you have shared some very insightful thoughts, which I really appreciate. This is a good learning lesson for me since it is my first experience with buying a brand new home from a builder. Fool me once, their fault. Fool me twice…I hope not…I’d be a dumb@$$.

Since my last post and after some investigation, it appears that this company is glaringly absent of any integrity, which, at some point, could come back to bite them. The BBB has received 8 similar complaints over the last 32 months about this builder’s dealings with people in this specific, localized area. I’m not sure what things are like in other cities, counties or neighborhoods. I’ll be doing a little research into this, believe me.

Unfortunately, it appears that the builder will cruise through this situation unscathed. Although my father-in-law is a major developer/commercial real estate broker in the area and actually sold this builder the land for this master-planned community, the president of the company basically told him to take-a-hike.

His company owns the land around this neighborhood, however, including the land next to the entrance. I encouraged him to sell it to a strip club or a salvage yard.

The questions still float around in my head, but I can’t get any clear answers from anyone, especially when their stories keep changing.

Now they’re saying that they had already signed a contract on the house (2) days before we inquired about it. 2 days??? If that was true, why did the supervisor give the agent the “ok” to sell us the house at their asking price, if they had already signed a contract with another buyer…2 days before?

Their story now, also, is that they sold the house at the asking price, even though they told us they had turned down a “low-ball” offer and would sell it to us if we wanted it at the advertised price. Yet, we got a call 6 days later, telling our realtor that the house was sold to another party after accepting a higher bid, meaning, if this is true, that we were the first to “offer” the asking price and that this bidding activity was going on after we signed a contract and was told the house was ours…not “we’ll consider this offer.”

Why wasn’t the term “bid” used in any of the dialogue with us? If the contract we signed was seen merely as a “bid,” why did it take them six days to get back to us? Why weren’t we included in the bidding process and allowed to counter the offer? If they already had a contract on the house…2 days before we signed our contract…why are we finding this out, not 6 days later, but 8 days later (after they had changed their story).

This is corrupt stuff and they’ve stalled long enough to synchronize their stories. So, it looks like we’ll get the raw end of the deal. If I believed in Karma…this would be a bad move for them.


From the information you gave us, the builder may have behaved unethically, but did nothing illegal. The builder took advantage of your inexperience and shattered your belief in his integrity. You are feeling betrayed and resentful.

I can understand your feelings. We were all beginners at one time, and perhaps experienced the same let down after someone took advantage of us. However, don’t despair. You came through this without any financial loss. Sure, your pride and ego are a little bruised at the moment, but you will recover.

Right now you are at the threshhold of a training moment. Don’t let this opportunity to learn from your experience pass. Step back and figure out what you learned from this experience. With hindsight, what should you have done differently? How will you protect yourself next time?

Actually, this has hurt us financially. We dropped out of deal with another builder not far away. We weren’t very far down the road in the process, but we will still lose $2,000 in earnest money. Had the builder of the new home informed us that this was just an “offer” to be considered, we would’ve held onto the lot and probably continued to pursue that plan if the purchase of this new home failed. But, we have the “faxed” sheet that says, “This home has been SOLD,” with our name on it. Guess not.

Unfortunately, because our former lot was in a great location in a great neighborhood, it sold within a couple of days. So, we can’t even go back and try to start over there.

What has happened is a bad thing…and this builder needs to do the right thing.

So, even if you had been able to go through with the purchase of this property, wouldn’t you still have forfeited the earnest money deposit on the other property?

You can’t blame that financial loss on this builder. Only on yourself for not honoring the contract you signed with the first builder.

Did you ask the first buiilder to refund your deposit? Since they put the property under contract to another buyer, they may just refund your money to maintain good will. Maybe the first builder will reinstate your “contract” on another lot and apply the deposit you already paid. You may not have lost anything yet. You have nothing to lose, unless you fail to ask.

Definitely ask for the earnest money back. If they give you a hard time, I would let them know that everyone will find out about it. If one of my units got under contract and the other person was not going to close, I would release the earnest money and thank you for your interest in my product…That would be worth a lot more advertising wise than the $2000.00.

I’m not suggesting that we “deserve” the earnest money back from the lot we backed out on. I’m just suggesting that we “wouldn’t” have backed out of the lot had the builder of this crazy situation revealed what was going on, even two or three days after we signed the contract, not six days.

Can we still get back on track with our original plan on a different lot. We’ll see. But, we’re still in dialogue with this other builder, even though it’s leading no where.

My point is, we were hurt financially in this. Who is to blame? I guess we are. I won’t make this mistake again.