We’ve been working with an modular home manufacturer and one of their trusted builders for over a year. Floor plans, specs, options, pretty much everything required for design has been complete and we’ve had an estimate for several months. We are in the process of submitting the loan application. The builder is now saying they made a pricing mistake and wants to increase the price by over $20K. The original price quote was ~$175K and is now ~$195K, representing about a 13% increase. The builder and the manufacturer claim that a glitch with the manufacturer’s pricing software omitted the builder’s margin on some of our options.
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What does your contract say about pricing terms? Most estimates and proposals in the construction industry are good for 30 days. Since construction contracts involve commodity pricing that can sometimes change drastically in a short amount of time (i.e. natural disasters, regulation changes,etc.) I don't see why a builder would automatically extend a pricing offer for several months without the written expectation that there might be changes.
Pricing errors are a seperate issue. In this case, what does that have to do with the price of eggs in China?
the 13% increase could very well be to cover the time spend over the last year to finalize/close a deal on what more then likely should have been a simple process. one year of going back and forth on a spec house seems like and incredibly frustrating thing to me.
best to know the increase now and not after you apply for the loan...