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First Home Builders

Iris of Miami Lakes, FL February 2, 2008

My son and I purchased two homes from First Home Builder of Florida back in September, 2005. We purchased the homes with a deposit of 2,500 and the promise that if we decide not to buy the house at the end of the construction, they will buy it from us. First, they sent a young boy to my house with a contract that I signed with honesty, thinking that it was only the deposit for the house, and that I could change my mind at any time--I would just lose the 2,500 deposit. Now, almost 3 years after, we are still receiving all type of legal papers on the houses that we have not even bought yet. Of course, the appraisal for the houses now is so low that it is close to 50% less than when we purchased the houses. I have reviewed my contract with some experts, and nobody can understand how First Home Builders got away with what they did to so many people. My credit as well as my son's credit is now holding a construction loan; and even when I intended to purchase the house with a mortgage company, I spent 400 in an appraisal which expired--and nobody got back to the mortgage company.

At this point, I don't know what to do. I am just waiting to see how I can resolve this situation and my credit can be released from this construction loan. If anyone can help me with some information, I will be very happy.

Minh Chau Tran of Irvine, CA November 1, 2006

I am in the exact same situation with this builder as these people. We bought this home for 355 and houses are selling for 200's -- do we have a case to cancel as stated in their contract?

Troy of Las Vegas, NV October 5, 2006

I entered into contracts for 2 homes with First Home Builders of Florida back in the summer of 2005. These are new-construction homes being built on scatter lots in Cape Coral, Florida. I placed 500 down on a personal residence and 5,000 on a house I intended to rent out. Amanda W, the sales representative I went to contract with promised me that if there were any reasons or problems that would prevent me from closing on the 2 properties, I could simply deed the home back to First Home Builders of Florida. She told me that First Home Builders of Florida would simply keep my 500 and 5,000 earnest payments as liquidated damages. Amanda also assured me that my credit would not be affected in any negative way if I were to deed the properties back to them.

However, when I talked to her over the phone in March or April of this year (2006), Ms. W said that First Home Builders of Florida is not honoring that promise unless one is not able to qualify for a loan. This was highly disturbing because I was lied to. If I was told that there was a remote possibility of my earnest money not being the extent of my risk, I would never have gone to contract. She also told me not to worry because there would be no way that the lender would fund on the properties if the appraised values did not equal or exceed the contracted buy prices. I had received my 60-day notice sometime August 2006. This notice states that my houses are due to be finished sometime in October.

I have just had appraisals run by First Home Builders preferred lender, Pinnacle Financial, and the appraised values for both houses have fallen short of their respective contracted prices. There is this clause in the contract that Amanda W and First Home Builders of Florida have referred to in the past, XXVIII i. Miscellaneous Provisions -- which states, In the event the buyer obtains and initially closes using a construction loan and is thereafter unable to obtain or qualify for the financing that would result in the end-closing, Buyer agrees to convey, via statutory warranty deed to Builder/Seller the home and real estate property, at which time, Builder/Seller shall pay and satisfy the construction loan.

It is clear to me that Amanda W and First Home Builders of Florida did not expect that my houses would not appraise for the respective contract prices. In this situation, I am expecting First Home Builders of Florida to respect the letter and intent of their own contract. Hopefully, they will be above board and forthright in their business practices. I believe the below-contract-price-appraisals for both properties, and the the lender not funding the original contract loan amount are grounds for First Homes Builders of Florida to honor their contracted promise to satisfy my construction loan via statutory deed.

Robert E. Ferguson of Olney, IL July 26, 2006

My wife and I entered into a pre-construction contract to purchase a home in Lehigh Acres, Florida. After exploring several companies, we went with First Home Builders of Florida because they only required a deposit of 2,500. Amanda Warden, the sales representative we worked with assured us that upon completion of the new home, if there was a problem of any kind, we could simply deed the home back to First Home Builders and be out only our 2,500 deposit. Amanda also assured us that we would in no way be considered in default of the loan and deeding the home back would have no negative impact on our credit.

She referred us to the clause in our Purchase Contract --  XXVIII i. Miscellaneous Provisions -- which states, In the event the buyer obtains and initially closes using a construction loan and is thereafter unable to obtain or qualify for the financing that would result in the end-closing, Buyer agrees to convey, via statutory warranty deed to Builder/Seller the home and real estate property, at which time, Builder/Seller shall pay and satisfy the construction loan. Now, as the house is under construction, Amanda is telling us that if we are unable to obtain financing after the home is complete (as it apears we will unable to do so - cash flow issues, not credit related), we will be declared in default and First Home Builders will foreclose, resulting in additional costs (most likely very substantial costs).

Needless to say, a foreclosure will also have a very detrimental effect on our credit rating.  I assure you, we would not have entered into this purchase agreement if Amanda Warden had not assured us that all we had at risk was our 2,500 deposit and our credit rating would not be effected negatively.

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