"More home builders are offering price guarantees to calm the fears of prospective buyers who are afraid the biggest purchase of their lives will immediately fall in value.
KB Homes, Pacific West Cos., Granville Homes and others are telling customers they will guarantee the lower base price if the prices fall during a certain period.
Granville and KB, which has four tracts in Fresno and Madera and is the fourth largest builder in the area in terms of sales, offers the price guarantee during escrow, which is typically five or six months, said Augie Dent, division manager.
Pacific West, a newcomer to the area that is building the Montage condominium complex in Clovis, is taking a more aggressive approach. The company offers the guarantee until the project is finished and the last condo is sold. "That's anytime between now and 21/2 years," said Michael Plowman, sales manager of Montage at Armstrong and Herndon avenues. "When the last one is sold, we'll rebate them whatever the appraisal says the difference was [between the price the buyer paid and the price at the end]."
If they guarantee the "base price", they could change the overall price by offering more closing help or adding on options, plenty of loopholes in this promise. Not sure what they mean regarding "whatever the appraisal says"? Who's appraisal? If it is your typical mortgage lending appraisal, not sure if this would be included as the intended use and user.