Home Buyers Seek a Way Out

The Wall Street Journal Online today mentions NVR Inc., which builds NV Homes and Ryan Homes:

In the latest fallout from the housing market's decline, disputes are breaking out between builders and buyers who signed contracts for new homes and condos when the market was hot -- and now want to get out of them.
. . .
In Alexandria, Va., real-estate attorney Beau Brincefield said he has settled roughly 50 contract disputes and has another "50 or more" in the pipeline. They include a case brought last year by more than a dozen buyers who had contracts to purchase homes from NVR Inc., a Reston, Va., builder that sells homes in 13 states.

Mr. Brincefield said the terms of that settlement are confidential. In general, he said, builders have agreed to lower purchase prices by as much as 35% or refund 25% to 100% of a would-be buyer's deposit. NVR declined to comment.

This builder has a good point:

Ceebraid-Signal said it is citing a "specific performance" provision in its contracts requiring buyers to hold up their end of the deal and close. . . .

"This is to frighten people and force them to close," said Mr. Moss. "It costs a lot of money in legal fees to defend these actions." A couple of buyers hit with such lawsuits have backed down and gone through with the sale.

Said Richard Schlesinger, managing director of Ceebraid-Signal: "I don't think there is anything that we are doing that is inappropriate."

"These are not situations where a woman bought a unit and she's now a widow and can't pay," he said. "These are people who don't want to close because they can't flip and make $100,000."