Q: This is for San Antonio TX. Does a builder have to honor the sales agreement price even if they messed up the numbers.
We entered into a contract for build in November 23. We made structural upgrades to the build. The builder never moved those numbers to the sales agreement. We then made design upgrades. We again amended the sales agreement but it never had structural upgrade costs put on it. The builder, nor us, caught this error until now, 2 weeks from close. The builder is now saying we need to come up with another 44k on top of the sales agreement that should have the structural upgrades. Is the builder obligated to the sales contract, or are we stuck paying 44k if we want the house and don’t want to back out of the deal?
A:
The answer to your question depends on whether your contract with the builder was a "fixed price" contract (e.g., "I will building you that house for $500,000") or a "cost-plus" contract (e.g., "I will build you that house for whatever it costs me plus 10%").
Also, note that some tract home builders include a clause in contracts they sign which allows them to unilaterally cancel the contract for any reason. This because particularly prevalent immediately post-pandemic when building materials experienced sudden, sharp, and usually unpredictable inflation.
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