Some homebuyers lose deposits of $10,000, $20,000, or more due to high mortgage rates

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There's a high-stakes tug of war over new homes. Many people who signed contracts before houses were built now are scared to buy them. Builders don't want them to back out and are keeping deposits.

more than she would have paid for it. Prices in the area had risen while it was getting built. And she says it quickly went under agreement and is listed as sold on the builders website.

"Most builders are going to be very cautious about just blanket giving a deposit back out of the goodness of their hearts," says Paul Schwinghammer, the president of the Indiana Builders Association. "If there becomes this word on the street that Bob the builder is giving everybody their money back, Bob's gonna be out of business pretty quick."

"There were some builders who say they're just keeping the deposit," Kahn says."Their contract allows for it... some are saying we'll just keep it.""Everything in these agreements is drafted in favor of the developer," says Craig Rothburd, an attorney in Florida who specializes in consumer protection cases. He says the buyers sign a contract which states they can lose their deposit.

 

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My husband and I are sympathetic about the challenge of high interest rates for homebuyers now but when we bought our home in 1984 our mortgage rate was 13 3/4%. That is not a typo!

'Paul Schwinghammer, the president of the Indiana Builders Association'.....no way! What an amazing name.

What do they think is the point of a deposit?

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Some homebuyers lose deposits of $10,000, $20,000, or more due to high mortgage ratesThere's a high-stakes tug of war over new homes. Many people who signed contracts before houses were built now are scared to buy them. Builders don't want them to back out and are keeping deposits.
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