I only have experience with tract/production builders (DR Horton & Gehan)... Is your builder a big national one, or a small local one?

How soon are you expecting to close on the loan and occupy the house?

How do you know the premium/lot upgrade has gone down by that much? (Just curious, lol.) And how much is 50% in raw numbers, if you don't mind sharing? I only ask because the last time I built a house (2017) the lot premium was like $2k or so (if I recall), so $1k out of a $270k loan wouldn't be that bad.

The only number that matters, at the end, is the appraisal, assuming you're financing the house. Whatever the existing homes in your neighborhood are selling for -- as long as they are comparable to your home in size, beds/baths, etc. -- try to keep your budget at or slightly below that number, and you should be okay. :-)

The builder is NV Homes. Not sure if they are huge national wide. They are pretty huge here in VA.

We are expecting to close in Feb. We signed the deal. Is there a way to negotiate after signing the deal? One of the people who bought it last week shared the lot premium numbers with us.

We paid $150K for lot premium and now it is $50K-$70K.

We will be at a disadvantage because of the apprisal. Our home will be apprised the same in the neighborhood.

I think lot premiums are very specific to a particular lot like Chispa mentioned. Unless the people who shared pricing with you have an exactly similar lot, it may not be a fair comparison.

@chispa/ @ladybug A 9a Houston area Good point. Just asking if there is a way. The lots are similar. The lots bought by other people are in the cul-de-sac (premium was 200K and now it is $70K). I feel at a disadvantage because the house will be apprised based on all the houses. Fine if there is no re-negotiation. A loss is a loss. I was looking for suggestions hoping to see if anyone can give me ideas about how to negotiate and leverage.

Write down your bullet points. You stated them here. Possible appraisal issues. Unfair. Bad taste in mouth over it, the other lot is $75K, etc etc.

When my DH need to negotiate something, we do a good cop bad cop routine, where one of us seems reasonable, and the one they dont talk to is upset…. it is alluded to. We have become skilled at that. Remember what Chispa said: you signed the contract. But it is worth a shot! doesnt hurt to try. Think about what ”extras” you might want to settle for. Good luck.

I agree with Mrs. S. It's worth a shot to ask but I doubt you'll get anywhere. NV Homes is a production builder (having grown up and practiced in Fairfax County, I'm very familiar with them) and usually production builders aren't too accommodating to either price or construction changes.

And of course consider the reverse. If you buy a home from a production builder at an agreed upon price and while it's under construction before closing you notice the builder has raised the price of that same model home by $20K. Would you accommodate their request for another $20K at the closing table? Somehow I doubt it as your argument would be "Hey...we signed a contract at an agreed upon price!!" but it never hurts to ask.

Couldn't agree more with others, what's done is done don't even waste your time asking for the money back.

Whatever happened to "a deal is a deal"?

How many times have we heard Houzzers say " My poor builder's lumber prices skyrocketed 35% from the time we signed the fixed-price contract to the time he started framing, so I gave him an additional $50,000.00."?

Well a deal isn't always the deal you think it is, which is why you need to read the contract carefully or hire a lawyer to do it. A neighbor's son is buying/building a house with a tract builder. About a month ago the builder told them that they needed to come up with an extra $35K if they wanted the house. The young couple didn't have the extra funds, but luckily my neighbor has done well and they helped out the kids. Turns out there was a tiny blurb in the contract that gave the builder the right to increase the price due to certain criteria. The kids could pay up or walk away and get their deposit back. The builder most certainly had back-up buyers wiling to step up and pay more.

Maybe the OP's builder thinks the RE markets are cooling down and wants to get all the lots sold and finish up the subdivision ... some profit now is better than no profit later.

I agree the OP should approach the builder. No harm in asking.

My builder isn't doing any fixed price contracts, specially since he is a small business and all the projects are custom and in different types of neighborhoods.

You can ask, but would you compensate the builder if the lot premium had gone up to 50% more than what you paid?

Whatever happened to "a deal is a deal"?

A deal has never been a deal. This is a popular and convenient myth, but it has largely been untrue for at least the last few thousand years.

In contract theory we understand that certain parties have an advantage in contract negotiations, today we refer to this as asymmetry of information. Thus contracts are inherently unfair, which is fine, there is no requirement that contracts be fair. However, there is a requirement that contracts be entered into in good faith.

So, to answer @Joseph Corlett, LLC - The reason we don't see people rushing out to give their builder more money is because the builder should have known better and contracts don't protect you from your own bad dealings, however, they sometimes do protect you from the bad dealings of others.

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@sis kus - First, ask for a discount, there are only two answers to the question and it is foolish to not ask.

You might also inquire about switching to a lot with a lower premium.

What does your contract say about your penalty for breach? Rarely would a contract have a $150,000 breach penalty as it is unlikely to be upheld in court. So you might be better off either breaching or using the threat of breach to negotiate your lot premium down.

Finally, lots are unique and just because land beside you in a cul-de-sac has a lower lot premium that doesn't mean you overpaid. You could have the only good solar alignment (north facing lot) in the whole cul-de-sac and a better backyard view that would easily account for the marginal lot premium.

Rarely would a contract have a $150,000 breach penalty as it is unlikely to be upheld in court.

Back in 1989, a builder I know took a C$250,000 deposit; the buyer defaulted by not closing and the deposit stayed with the builder.

But it's an interesting point worth exploring with a lawyer familiar with your jurisdiction and the actual contract documents.

"A deal has never been a deal. This is a popular and convenient myth, but it has largely been untrue for at least the last few thousand years."

Zat so? Well, a deal has been a deal with me and my customers for more than 30 years, so apparently I'm an outlier.

Well, a deal has been a deal with me and my customers for more than 30 years, so apparently I'm an outlier.

May I suggest you talk one customer into a $150,000 premium and another customer into a $50,000 premium for the same work at the same time, then put them in touch with each other and let's see if you really are an outlier.

Spoiler alert: that notice of investigation for criminal fraud from the Attorney General's office tends to loosen those purse strings rather fast.

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You seem to be arguing that all other deals are off other than the final one. If the builder represented lots would have a premium of $150,000 so you have to pay $150,000 why is that not a deal? It actually is, it is called detrimental reliance, the builder made a promise (lots will have a $150,000 premium) the OP relied on that promise to make their own promise (buy the lot) and now the builder has retracted his promise. Therefore, it is only logical the client can also retract their promise. Detrimental reliance is typically actionable. This applies whether or not the builder knew he would discount the lots later.

We don't know what happened in the OP's scenario. There are several situations where this lot premium might be legit and I suspect it is. However, there are other situations where the premium may have been misrepresented, either directly or via a material omission, and you have to be careful doing that. For example, if the builder charges a $150,000 premium for the first 10% of lots, that would likely be allowed if it is noted that the premium is for lot selection priority. However, if he knew of the discount at the time the lots were sold and didn't reveal it, I would argue it was fraud.

Lots have asymmetrical appeal. They are a commodity, not an absolute value. A better lot could very conceivably be worth more. Better analyze that size, cardinal direction, drainage, traffic patterns, buildable %, and all the rest first.

Thanks, everyone for your input. One of the guys called the regional sales manager. His said - Let us know if you are not happy with the pricing, we will refund your money. We will not work with you in the community again. Like you guys suggested - I m going to ask the regional manager.

So, pay it, or here’s your money, choose another subdivision that we aren’t building. Plus get some choice input in the ear of other builders in the NAHB about you. They can sell it for more than you paid. And they will blackball you.

This is your hill to die on here for building at all. Do you want a new home? Or would you buy existing, if you were priced out of all future talks with other new home builders?

LOL... One production builder isn't going to complain about beans to another. That is patently ridiculous and they are certainly not going to complain to the NAHB nor would the NAHB keep such a list of complaints, or in any way relay it, if they did. That would be begging for a discrimination lawsuit.

Do you work for their builder or something?!

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Here is my take... I have never seen a production builder offer a full refund (break the contract, forfeit all, or a portion, of your deposit is nearly universal), very possibly, the only reason they are offering a full refund is they know they don't have a leg to stand on. They are using the only little piece of power they have (we won't build your house unless you let us keep your overpayment) to entice the OP to stay with them. In that case, hy would the OP trust them to build a house if they can't even have some integrity selling the lot?

They aren't going to tell anyone else about this and I wouldn't be the least bit surprised to find they make the OP sign a non-disclosure agreement for fear that other builders will hear about it.

@sis kus - As has been mentioned by others, above, lot premiums are specific to each lot. Just because two lots are similar in size and both are on a cul-de-sac doesn't mean that they should be priced the same. For example, here is my street, and a portion of another street. I have made some "remarks" on a few of the lots, including the square footage of those lots. Lots A, B, C, D, and E are the same floor plan, and they are all on a cul-de-sac (albeit Lot E is on a different one). The dollar amounts shown are the lot premiums for each lot, over and above the price of the home. On either side of Lot B, I've indicated the square footage of the lots, but they are a different floor plan. Behind Lot B is yet another floor plan, so only the square footage of the lot is indicated. Yes, lot premiums would factor in on the lots with the other floor plans, but I don't happen to have that info handy, and we bought the house 31 years ago, so... Also, where I live, if you want a particular floor plan, you don't get to choose a lot and then say "Build this floor plan on that lot." The builder decides which plans go where, so if you want a particular floor plan, your only choice is which of the preselected lots you are going to want. I do realize that not all builders work this way, but at least this way, you don't end up with six or seven (or more) of the same house all in a row!

As you can see, Lots B and E are larger than Lot A, but Lot A has the higher lot premium. Most people would automatically think that the bigger the lot, the bigger the lot premium. But that's not the case. You can easily see that Lots B, C, and D have houses on both sides as well as in back of them. You can't tell what's behind Lots A or E. Because one developer can build on land right next to land being built out by another developer, including being developed for a shopping center, apartment complexes, etc., it's important to get the "bigger picture." That's where the second image comes into play. It shows a larger area. Again, I've indicated Lots A, B, C, D, and E. Now you can see that only Lot A doesn't have houses that share the back fence with it. In fact, that meandering white line is a year-round creek. (The vertical blue line that runs from the one "corner" of Lot A across the creek to the back property line of the house on the other side of the creek represents a parcel line because the property to the right side of it was developed by a different builder. Also, the distance that the vertical blue line spans is 131 feet. The shortest distance between the fence of Lot A and another house's back fence is from the lower right corner of it, across the creek directly to the right, to the back property line (the two houses' fence lines are almost "pointing" at each other), and that's a little over 113 feet.

So... Lots B, C, D, and E all have houses surrounding them, but Lot A only has houses on either side. And, because of the way the house is sited on the lot, the side yards are very large. (The "house" images on the small picture are not at all representative of the shape, size, or siting of the houses on the lots.) The creek is lined with trees, so when you're in the back yard of Lot A, you view the trees, not houses.

Yeah, Lot A is where I live.

Bottom line -- have you really vetted the differences in the lots where you are buying, to determine why there is such a difference in premiums?