Legality of "Independent" Estimates - Help Needed

[tMoon]

Edit: Has been (or will be soon) resolved

Thanks for input.

 

[Plznate]

Dude, if the developer was using their own "in house" services to establish the home estimate, that screams of fraud.

How much did you put down on a deposit? And that does not include any actual down payment, correct?

 

[tMoon]

Dude, if the developer was using their own "in house" services to establish the home estimate, that screams of fraud.

How much did you put down on a deposit? And that does not include any actual down payment, correct?

That's what I'm saying, thing is this is no small time developer either.

$15k is how much was put down for the deposit (what would be lost upon walking out on the contract.) Ya na, only a deposit.

Note: I'm speaking as I'm doing all of this purely to simplify things

 

[Raptor lx]

That's what I'm saying, thing is this is no small time developer either.

$15k is how much was put down for the deposit (what would be lost upon walking out on the contract.) Ya na, only a deposit.

Note: I'm speaking as I'm doing all of this purely to simplify things, my parents are the ones purchasing a house. After getting the estimate back today, they found another house literally 2 streets away, for $50 grand less and they're thinking about purchasing it and trying to get out of the current contract.

If they were to simply walk away, it would still be cheaper to go to this other house (which is nearly identical to the one that is being built.)

You would have to check the terms of the contract that they entered into upon placing the deposit.

 

[tMoon]

You would have to check the terms of the contract that they entered into upon placing the deposit.

That I know, and the general consensus is if a house doesn't appraise for what it's selling for the contract is able to fall through. They get around this by having the "house" and "things that are added to the base of the house" as two separate entity's.

Either way, I'm just wondering if what they're doing is even legal. Over-valuing property is what helped cause the crash in housing the first time.

 

[Plznate]

That I know, and the general consensus is if a house doesn't appraise for what it's selling for the contract is able to fall through. They get around this by having the "house" and "things that are added to the base of the house" as two separate entity's.

Either way, I'm just wondering if what they're doing is even legal. Over-valuing property is what helped cause the crash in housing the first time.

The right answer is to have them consult with an attorney specializing in real estate. What they are doing may very well be violating either state or federal housing laws. Because truly that's pretty odd.

 

[Emperor Nero]

Theoretically it is legal. They could be owned by a parent company, but still independent legal entities. Meaning that the third party estimate is therefore independent.

Contractually I'd have to review it, but from what you have described it seems that they have a base house that is set forth in the contract. Anything extra will have a value independent of the house set forth in the contract and they're evaluating the cost of the house and additions as one, which isn't what the contract is. It is for a base house that is standard in that particular subdivision. Again, all theoretically and all contractually based. Legality, I would say that it is on the up and up. If it is a large contractor they already have a basic contract that is set up by a legal professional.

 

[tMoon]

Thanks for the input everyone, all is taken care of (or will be soon.)

Theoretically it is legal. They could be owned by a parent company, but still independent legal entities. Meaning that the third party estimate is therefore independent.

Contractually I'd have to review it, but from what you have described it seems that they have a base house that is set forth in the contract. Anything extra will have a value independent of the house set forth in the contract and they're evaluating the cost of the house and additions as one, which isn't what the contract is. It is for a base house that is standard in that particular subdivision. Again, all theoretically and all contractually based. Legality, I would say that it is on the up and up. If it is a large contractor they already have a basic contract that is set up by a legal professional.

My assumption is the only way it could be deemed illegal is if it can be shown that these third parties are knowingly inflating the value of the houses under direction from the parent company.

Gota love contracts

 

[djweasel]

Closed.