Toll brothers and lost deposits

[S1968]

It sounds like people were really steamrolled. Toll offered lots of free upgrades if you used their lender but you couldn't even apply to their lender without plunking down a large deposit. The smart people above walked out, but home buying is complicated and confusing and there was no reason to think that Toll was basically stealing your deposit. I wonder how many homes they're actually selling lately. Are homes built and then left empty and unsold? Are developments left half-done?

[AeroGuyDC]

Originally Posted by bande1102

The thing that really got me is that (according to one of the links) Toll Brothers made most of their money from those deposits--not their houses.

True...I saw that too.....but........I believe that was during the height of the recession when all kinds of people pulled out of the housing market after entering into a contract to build.

A home-builder wont' build you a house without some sort of financial commitment and at some point that financial commitment may be irreversible based on the percentage of the house that's already completed......unless there is a clear-cut financing contingency. Accordingly, it is entirely possible that many of the people who lost their downpayments was not necessarily from some sketchy mortgage arrangement, but from a legitimate point in the process for which there was no return. You can't really make a judgement of those forfeitures without knowing the details.

I certainly don't defend Toll Brothers if they are engaged in sketchy business practices, but you have to remember that they are spending money on building a house that may not be bought under the original contract. That's a real tangible risk for which any home-builder will seek to protect itself from. I can assure you an $18K or $52K down payment (cited in the story) will not cover the costs associated with a house that's under construction. It cost's that much just to move the dirt and dig for utilities.

[pokeable]

Originally Posted by S1968

I wonder how many homes they're actually selling lately. Are homes built and then left empty and unsold? Are developments left half-done?

In Howard County, Patuxent Chase is selling their model home for 2.4 mil. Cattail Creek in Glenelg has two quick delivery homes selling for 1.1 and 1.2 mil.

[psusra112]

Originally Posted by pokeable

From the 1st and only time we bought a new place, the home had a base, list price. We were told up front how much "upgrades" (granite, hardwood, recessed lighting etc etc.) would be, and with the new price, discussed financing. No one put a gun to your head to get "upgrades" at the time of the build. You could get them after close on the 2ndry market.

If Toll would not allow you to add upgrades without using their in-house lender, that is a cheerful ground for litigation (google Craig Northrop's legal problems in MD). However, if your pre-approval lender would not up the amount they would lend to you, the onus is on you and your tastes.

Not about adding upgrades and paying for them, but rather getting "free" upgrades. Like I said, I walked, as I realized how foolish it was to buy a brand new home and didn't feel like putting up with the builder's bs. It's nearly as bad as getting a brand new car. However, I could certainly see some first time homebuyers getting swindled by the legalese in these contracts.

[Zenstyle]

Toll Bros, purveyors of soul-and character-free drywall palaces, touting their vast empty boxes as "upscale" to the over-striving.

[davecj]

If I remember right, this was more akin to they didn't qualify after construction started and is why they lost the deposit.

[AeroGuyDC]

Originally Posted by davecj

If I remember right, this was more akin to they didn't qualify after construction started and is why they lost the deposit.

My understanding as well. Much to the dismay of the uninformed/inexperienced, you don't get to walk into the sales office of a home builder, sign a contract and expect to walk away without penalty if you decide to pull out after construction begins unless there's an ironclad contingency giving you that right. It doesn't work like that. It's sad that these people lost their down payments, and perhaps Toll's practices are sketchy, but somewhere in that contract were the terms and conditions. A person should know their limitations....if they can't read and comprehend a contract, then they shouldn't be signing it until they get assistance reading and understanding it. That's the bottom line here.

[Seaponies]

I'd have to fault Toll Brothers here for their deceptive practices. They should've made it clear that if after paying a deposit and signing, that if they didn't qualify via Toll's lender, then they would lose their their deposit. As a former salesperson myself, I would make it known clearly what the consequences are.

Toll is just plain deceptive. Further more, in the contract there should been an opt-out clause, if their loan didn't get approved. It shouldn't have taken more than a few days for them to see if the potential buyers were qualified or not.

The potential buyers still should do their homework and not be coerced or pressured into signing with the pretense that they'll only get the builder incentives with their lender only.

[Ben A. Roundawurld]

So what you're saying, Seaponies, is that personal responsibility and business culpability are not mutually exclusive. Love it.

Please continue to be a shining light of reason on this board.