Buyers home building contract canceled, listed for $50,000 more

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Hanna James signed a contract a year ago for a new home, but in January, a week before closing, the builder tore up her contract and has since raised the price by 25%.

FAIRBURN, Ga. — A metro Atlanta public school teacher said Wednesday she learned a hard lesson and had a word of warning for people, like her, who are trying to buy a home. in this seller’s market.

His homebuilder bailed him out a week before closing and tore up his contract in order to put the house on the open market for tens of thousands of dollars more.

And, she found out it was perfectly legal.

Hanna James signed the contract with the contractor in February 2021, for $295,000, to build a brand new home, in a brand new subdivision in South Fulton County, just off South Fulton Parkway and the freeway 92.

The house was supposed to be ready for move-in by September 2021.

She often visited the construction site, saw her new home take shape, took photos of every stage of construction, and paid nearly $5,000 for various additional optional upgrades.

The completion of the house was repeatedly delayed. But it was due to close in January 2022.

A week before closing, his agent told him that the buyer, Heatherland Homes of Atlanta, was suddenly forgoing the contract and raising the price by tens of thousands of dollars.

“The message from my agent at this particular time was that the builder had decided to terminate all existing contracts,” James said on Wednesday, “and that they were raising the price of the house, and if we wanted to go ahead , we had to enter into a new contract with the new price of the house.

The new asking price then was $355,000, which she could not afford. And now, online, the price is listed at $370,000, 25% more than James’ original contract price of $295,000 from a year ago.

“I was hurt, a little in disbelief,” she said, and she understands the builder was within their legal right to do what they did.

She added: “But I think ethically, no, he’s completely wrong.”

James received a refund of his deposit, $3,500.

But two months after the automaker canceled her contract, she still hasn’t received a refund for the nearly $5,000 she paid last year for the upgrades.

“Waiting a week before closing to tell someone you’re going to raise the price of the house, I don’t think is ethically – it’s just not right.”

And, she says, until she gets her full refund, she can’t start looking for another house to buy. James lives with relatives after moving out of his apartment last year, anticipating his new home to be ready in the fall.

The person who answered the phone listed on the Heatherland Homes webpage on Wednesday told 11Alive that they did not work for Heatherland and did not know how to reach anyone with the company.

Hanna James saw others posting similar complaints online about Heatherland canceling their clients’ contracts at the last minute in order to find new clients willing and able to pay significantly more.

An online response, from someone claiming to speak on behalf of the company, wrote that the company had no choice but to cancel contracts which, during the construction period, ended up having a price too low to cover the rising cost of building materials.

“Prices are going crazy” in all facets of the housing industry, said Atlanta realtor Kevin Maxberry of Maxberry and Associates.

Small and medium-sized homebuilders, Maxberry said, are more likely than larger firms to have difficulty paying for expensive materials and limiting cost overruns; he said they didn’t have the extra cushion to absorb cost spikes.

“And there’s very little a buyer can do,” Maxberry said, “because all construction contracts are what are called ‘one-sided contracts.’ “They have many ways to get out of the contract. It’s unethical and unfortunate for the buyer to have to go through something like this.”

James said that since January she has not been able to reach anyone with the company. She managed to get the Better Business Bureau involved, and the last she heard was that the builder is now promising BBB to FedEx their money back.

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