Builders backing out of new construction deals.

[Tom Price]

Anyone else having issues with builder's/turnkey providers issuing cost increase letters to the purchase contracts of new construction turn key properties.

We have had 2 homes in Central Florida in escrow for over 4 months and we are now getting notice that they are increasing our purchase price by 13%. But we should be happy because they have raised the price by 20% to anyone signing a contract today.

Basically destroying the cashflow on the deal. We can cancel the deal and get all of our deposits back plus interest. Just really upset.

[Will Fraser]

I completely understand your frustration, @Tom Price!  If that home was constructed at the time of contract then this is ethically on par with a scam.  If it has been in construction during the escrow period or if the building began at escrow then unfortunately it is what it is.  You know well what the costs of building supplies has done and builders are not in position to warranty against the future costs of commodities, but rarely are we seeing such quick spikes in prices.  In such instances it is unfortunate, yet understandable to see the increased costs passed on, in part or in hole, to the end-user.

Back to the basic tenant of investing — let the numbers tell the story.  If the new numbers don’t work then be on to the next one.  If they work, then 13% less is not ideal, but it still works and yay!