HOUSTON — We've been hearing about soaring home prices for months now, so some home buyers are thinking of having a home built instead, but it turns out that may not be a more affordable option.
Jason Reeves and his wife set out to build their family's dream home in Ohio, but now they're stuck with nothing but a lot of dirt and weeds.
"The final contract was finalized on March 25th," Reeves said.
But just as this bulldozer arrived to start work, his builder had some bad news.
"They asked us for $75,000 more to build our house," he said.
Another $75,000 to build a home in a neighborhood of $600,000 homes. Why? Soaring lumber prices, which had nearly doubled earlier in year.
Reeves says his bank won't extend his loan that much.
It's happening to more and more families this year who are having a home built. You agree upon a price, sign a contract, the builder says everything is great, but then he says we are going to need a lot more money.
Reeves and his wife are now backing out of the deal, but the Frazier Homes, wants to keep $17,000 of their deposit.
According to the company's attorney, $12,000 is for the architectural plans, which the Reeves get to keep, and $5,000 is for the administrative costs outlined in the contract.
Reeves has hired a lawyer of his own to plan his next steps, but this is a caution to anyone building a home right now. Be prepared for price increases, possibly major price increases.
"My wife is heartbroken," Reeves said. "I am taking it a little better than she is. For her, it is just a nightmare."
If you're signing a contract with a builder, make sure you know if it is a locked in price or if it can escalate with the price of materials that way you don't waste your money.