My husband and I paid $15,000 in earnest money to have our dream home built by Keystone American home. The home was to be built in a subdivision named Rachel Ridge in Surprise, AZ. We paid the money in January, 2008 and the home was to be completed in late July-early August, 2008.
In June, 2008 we realized that work had stopped on our home. We asked the builder what was going on and was told that the banks had stopped providing money to complete the homes due to the housing market. Keystone would have to sell their empty spec homes prior to receiving any more money to complete the homes. Our home wouldn't be completed until the end of the year. They offered to us the purchase of the model home of the floorplan we wanted at a large discounted price. We decided to go with that since our home we were having built did not have the same number of upgrades as the model home.
We completed the paperwork with the builder on July 3, 2008 and was told by the project manager to have our renters for our home we were moving out of to put in their 30 day notice at their apt. complex. This way they would be able to move into our previous home the beginning of August. We did exactly that. My husband and I went in and signed the last of the paperwork with the broker the 3rd week in July and was told it takes 24-48 hrs to get the title on the home and close. We were to be moved out of our home by the 1st weekend in August.
By that Friday, August 1st we were told that we would need to find some temporary place to be for awhile by the broker due to the title companies not wanting to work with Keystone American so we could close on the home. We had to move out of our previous home on Sat. August 2nd because a rental agreement had been drawn and our renters were set to move in. However, Keystone American could not close escrow on our new home. My husband and I and our 4 children had to move into a 1 bedroom suite hotel for almost $500 a week. No communication had been given to us from Keystone American that there were problems with them being able to pay their subcontractors or having problems with the title companies.
We found out that Keystone American had 4 open cases against them and filed through the AZ. Registar of Contractors for mechanical liens on the homes. We met with Keystone American, in which the president of the company would not come in and speak with us or address our concerns on Monday, Aug. 4th. My husband and I took our 4 children into the office with us, along with a neighbor who also had placed $15,000 down for earnest money, and told Keystone American our concerns. We communicated that we would not just sit there while Keystone American took our $15,000, not provide us with a new home and have us homeless living in a hotel for $500 a week. Keystone American came back with an offer for my husband and I to take pre-possession of the home however we would need to put $4,000 security deposit down and pay $2,000 a month for rent. We declined that offer.
Later that day we were informed that Keystone American was in fore closure on the homes and could never close escrow on the home we were purchasing. Later that week we were asked by the bank that is taking over the homes if we wanted to buy it when it foreclosed and went to auction in November. We would have to bid $1.00 higher than the bank and they would tell us what they were planning to bid for. No money has been refunded to us and we had to look for a least expensive place to live since the hotel and cost of food was becoming too costly. Plus, in addition to all of this our children were due to start school on Monday, and were enrolled in the school in the new subdivision. We have had to unenroll them from that school and place them back in their old school until we can obtain a more permanent residence.
We are out of $15,000 in earnest money, $500 (we will have to pay another $300+ for another temp. placement) for hotel costs and hundred of dollars out of food having to purchase eating out or buying food daily. My husband has had to take 2 weeks off from work due to this situation. Our family has been extremely stressed which has affected our health, caused a lack of sleep and anxiety in 2 of our children regarding the recent changes and the unknown of where we will be living.
