Buying a new home gets riskier
By Aïssatou Sidimé - Express-News
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Buying a new home in a still-developing community always has carried risks, but the stakes have gotten higher as builders face an increasingly turbulent market.
Many homeowners in these subdivisions have been feeling under attack as builders scale back their products or leave San Antonio. The owners are left in the lurch, facing lower-priced homes being built next door or empty lots with little hope of development.
But in at least four KB Homes communities, residents have found that waging grass-roots protests can yield some success when builders scale back. Where builders pull out completely, the future is less certain. Either way, the problems are likely to continue as the market struggles to recover.
BAHRAM MARK SOBHANI/
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Matthew Hegedus (right) and neighbors Dave Cox and
Yvette O'Donnell stand in front of Hegedus' home in the
Quarry in Iron Mountain neighborhood earlier this month.
Earlier this week, residents of KB Home's Sundance Trails, Sundance Ridge and Quarry at Iron Mountain subdivisions were told by KB Home's Central Texas region President Ken Langston the company had decided to reverse some of it cutbacks. This was after weeks of lobbying county commissioners and state legislators, letter-mailing campaigns and the launching of a Web site, www.KBLies.com, by Quarry at Iron Mountain residents.
Initially, KB Home planned to alter home designs in several communities to offer homes that were cheaper and smaller and some with less masonry. But at Tuesday's meeting, Langston told the crowd that KB Home had limited new construction in the Sundance communities to models with two- and three-car garages only, and that all new homes must have masonry.
It also plans to add two new models with more brick this month at the Trails at Herff Ranch and replace narrower, lower-pitched models at the Quarry at Iron Mountain with larger floor plans popular in Austin.
But for the angriest of the residents who were hoping to have their homes bought back by the builder, Langston's concessions fell far short.
“My price per square foot has diminished 17 to 18 percent, $70,000 to $80,000 in one year,” said Matthew Hegedus who with wife Rachel are among the dissatisfied Quarry at Iron Mountain residents. “That's because of the acts of the one builder who controls this neighborhood. We just want to educate other consumers.”
KB Home executives say there were no significant price differences in the community since it opened in 2006 and offered Tuesday night to meet again with Quarry at Iron Mountain residents.
This sort of conflict likely will continue in San Antonio as the new-home market struggles to recover and more builders scale back.
Homeowners have few options after buying into a new community that does not develop as initially planned.
Sales staffs typically show off plans for a community and even may specify neighborhood amenities in a purchase contract. But most contracts give builders the right to alter a community's plans at will — and homeowners don't have solid legal grounds to challenge the changes unless deception or false advertising was involved, according to the Texas Residential Construction Commission.
Usually the strongest deterrent against a builder making changes is the desire to avoid generating ill will among potential buyers. But even in cases where buyers take the extra step of seeking assurances of the builder's financial stability, the unstable market still can force sudden changes.
Tamara Price, a San Antonio real estate agent, paid roughly $292,000 for a house in the Kimball Hill Homes' Sablechase neighborhood last October.
The single mother of two said she thought the builder was sound after attending a meeting with company CEO Ken Love at which he assured potential buyers the company was on solid financial footing.
Two months later, she learned Kimball Hill Homes would shut down operations, leaving its Sablechase community about 75 percent incomplete.
Already, the builder had slashed prices about $25,000 below what Price paid in an effort to sell the community's 11 remaining homes.
“I put my life's savings into this house,” she said. “They could rewrite the covenants and could let in a low-end builder. What's to say they won't?” she said. “They should have contacted me. I'm not asking them for money. But they should provide an apology to everyone who closed through December.”
Kimball Hill Homes executives said Wednesday they still had planned to emerge from bankruptcy protection in October when Price bought her home and that they announced the plan to shut down operations on Dec. 2, a week after negotiations with the last investor fell through.
“There was no deception here,” company spokeswoman Anita-Marie Laurie said. Laurie said Price was not notified personally because of a breakdown in communication.
http://www.mysanantonio.com/business/real_estate/Buying_a_new_home_gets_riskier.html?c=n
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You said you started the website to educate homeowners. Why don't you educate yourselves and take a look at the economy and the housing market. You're not special, everyone's property values have dropped. Stop your whining. Oh and yes I live in a KB home, never had any problems, and NO I do not work for KB.
It continues to amaze me that San Antonio people are surprised with H Cisneros's involvement with KB. He appeared to have great hope years ago but with medling with the Medlar, building the pink elephant on the near West side that the Bill Miller family had to tear down and rebuild correctly, and his exploitation of HUD secretary position to get the KB job and on and on and on. This whole thing is such a sad history of San Antonio. Lila's golden boy, Henry, forgot his roots and grew weeds everywhere!!! Such a shame.
pjc94:05 PM
KB homes were always geared for building low income homes, and carried the same concept when they started building higher income homes. Why they are allowed to continue their shoddy practices is mind boggling. Why Henry Cisnero got involved with that organization is also mind boggling.
I don't understand this continue fuss about KB. Anyone who buys a KB home has been under a rock for a long time. There have been nothing but complaints for years--construction, retaining walls, flooding, etc. Surely, the KB must have been the purchase of last resort. How easy is it to get a KB loan? There may lie the answer to why people keep buying them despite there obvious poor quality.
KB, to the best of my knowledge, has NEVER suffered from having a good reputation. I used to visit my folks in Calif and folks there were painting lemons on their homes so when the media showed up there was no misunderstanding of their sentiments. My husband and I are home builders in a small local community. I am very grateful that my partner and I are on the same page with quality. We still build on 16" centers and put the correct size lumber in the correct places to carry the load. Our idea is to put the effort in upfront so when we see you again, after your purchase, we can laugh and talk about anything but what is wrong with your home. I am always amazed at how little home buyers know about the fundamentals of how a home is put together and what is required. The average consumer spends more time researching their next technology purchase than they do their biggest ticket item. It pays to know your builder by name, employ a small hands on contractor and pay attention to detail. If your builder doesn't pay attention to the little things you can only imagine the corners cut on the big things.
js720 - I am a KB home owner in the Quarry like yourself and would like to clear the water on your misrepresentation of our neighborhood. You said that "These three people are the only ones in our neighborhood who are upset” THIS IS NOT TRUE!!! I am not one of these three people and I am very upset about what KB has done and is doing to our neighborhood. These three people are the only ones willing to take a stand. What these people are doing is what every KB Estate homeowner should do. You should be thanking these people instead of bashing them. KB mislead me and many of my neighbors as to what this neighborhood was going to be and are now using the value of our homes to make more money off of lower value homes. It is simple math, if you have 50 houses valued at $400,000 and you can build a $200,000 dollar house in the same neighborhood and sell it for $250,000 by using the value of the higher priced homes to increase the value of the $200,000 home. The cost of doing this comes from the sucker that trusted the builder to do what they said they would do and built the $400,000 house early in the development. So js720 when you speak about the Quarry speak for yourself. I will let Matt, Dave, and Yvette be my voice. Besides anyone that would buy 2 KB homes in their lifetime can't be all there.
I love my KB Home. One issue with a toilet but they fixed it in a day. All my neighbors seem to love their homes too. Our home has gone up in value close to $50K in the last 4 years. The ones who have had bad experiances seem to be the most vocal.
my understanding is that, in this current state of the economy, alomost all new homes are depreciating as soon as you move in. the key may be as to whether one has short or long term plans for the home.
King_Homer: My wife and I purchased our KB home (called RAYCO) back in 1995. Overall, we've had no real problems with it (location definitely helps). Proper maintenance to the outside will help the home present good curb appeal but you're partially correct. I would have preferred acreage in the nearby hill country but our friends in AGUA have seen and pushed legislation through that makes it almost impossible for this to happen (unless one is willing to pay >$500,000 for a custom home). Since our time is short here in Texas, we will be selling within this year.
I actually believe that all new subdivisions being built should have a mandatory limit on rentals or non-owner occupied homes. No more than 10 homes per 100 can be occupied by a non-owner.
It's been shown time after time that people who do not own their homes do not take care of them. They invite their friends over who frequently create crimes in the area, and it creates an air of fear in a community.
Everyone should know better than to buy in a KB community anyway. Most of them wind up being gang-member havens if the price point is close to the section 8 threshold.
new is not always better...companies now a days build with cheap materials and cut corners all the time for an easy fast dollar.
Well that is some good advertising for Tamara Price! Isn't that just the real estate agent you have always wanted giving you advice on what home to buy!? Hopefully I never go to where she works to find an agent! What a winner!
A real estate agent can afford such a home because they can sell you a home and make a good commission. It doesn't matter she is single because the monthly payments she can pay and that's what people need to do to keep their homes.
Here's a fun game: Go visit any KB home and bring a right angle ruler. Look at every corner of the house and see how many right angles you can find. The one who finds the most, wins!!!! PS: good luck finding any.
Js720 must work for KB because no one else in the community to shares this sentiment. You think you are buying your dream and moving up. If this is a common practice then this should be pointed out before you contract to purchase a home, but instead you are sold a dream but delivered a nightmare. If one wanted to live in a low end community they would buy in a low end community. There is a reason people spend upwards of $300,000 for home...they are buying in to a lifestyle. For those homewoners in communities that are not seen through to compeltion, my prayers go out to you. The uncertainty must be brutal...
js7209:00 AM
I live in the Quarry and could not be happier about my home. The information that is on the website is inaccurate. The homes that are being built are still in the same price range and follow the same building codes that all builders are required to use here in San Antonio. These three people are the only ones in our neighborhood who are upset, and their actions do not reflect the feelings of the rest of the community. This is my second KB Home and could not be more pleased with the way my purchase was handled from beginning to end.
I am a home inspector in the San Antonio area. This is common practice for builders like KB, Mainstreet and Sivage.
A single mother of two - $292,000.00 home?Work for the city??
A little research beforehand would have benefited these people. KB does NOT have a stellar reputation when it comes to homes, and has not had one for a very long time. Shoddy construction, deceptiveness, etc. There is no way I would ever buy a KB home. If you are going to spend your money and buy a house, be an informed consumer and do some research!
It doesn't take more than common sense to understand that if you buy into a community at the beginning things could change before it's all said and done. The problem is people got greedy with the housing boom and now that don't want to sit tight and build their equity. No builder would buy back someone's home just because housing values have gone down and the builder wants to build lower end homes now that people aren't buying and the economy has slowed. You take a chance with any real estate purchase that the value will go up or go down. People need to stop being so lazy and wanting to make a quick buck and remember you buy a home to live in not to hit the lottery with it.
Optichris12:27 AM
I completely agree, Homer. The problem is, what choice do you have if you are a young family looking to buy a home? Personally, I'd never move into one of those neighborhoods, and an article like this further reinforces that feeling.
I never understood why people would want to move into a tract community. Every house looks the same and they're built using cheap materials. The neighborhoods are awful 10 years from the time they're constructed, and the values drop like crazy. You get what you pay for.
