Start of homebuilding process

Today I will discuss the start of our home buying process (if you missed our home selling process, view the previous post).  We have heard alot of horror stories how building a new house can be a total nightmare.  We thought this was a little exagerrated as we thought we had done our homework on selecting a builder.  Could it really be that bad to build?  Well we have been thru alot so far and maybe, just maybe this can help someone else to avoid the agony and pitfalls we have had to encounter.  While we were doing our home search we came across our builder, Norfolk Homes, located out of Ann Arbor, MI.  I will admit this has not been the most pleasant experience.  We have come to realize a builder who nickles and dimes you for everything and who we honestly feel we can not trust!  I will post below letters describing our series of events thats occured instead of retyping everything over.  Take notes :) and learn from our mistakes (get everything in writing) so your building process can be smooth sailing!  This letter went to the CEO of Norfolk homes in Ann Arbor, MI.


August 5, 2011

Attn: Kevin Belew, Co-Owner
Attn: Jim Franke, Co-Owner
Norfolk Corporate Offices
8178 Jackson Road, Suite D
Ann Arbor, MI 48103

Dear Kevin Belew/Jim Franke,

Hello, my wife and I are in the process of purchasing a home. After comparing several builders in our area, we came to the conclusion that The Camden Model (elevation A) by Norfolk Homes would fulfill our family’s need. The option for the 4th bedroom was a big selling point as our family continues to grow. I am writing this letter to inform you of my dissatisfaction with the home buying process we have experienced with several of Norfolk’s new homes sales consultants and the Division Sales Manager for Tennessee as well. 

On July 17th we first met with your new homes sales consultant, Amy, at the Woodmont Subdivision and viewed the Paris II model. While viewing the model Amy mentioned the new subdivision of Blair Oaks. Amy informed us that Norfolk was offering double incentives for the month of July of $7,500 and we could take advantage of this offer if a contract was submitted before the end of July. We informed Amy that our house was on the market for sale and she stated that Norfolk did work with home sellers. We were advised that Norfolk would do a 90-day contingency on the sale of our home. It was explained that our offer would be locked in for 90 days and after the 90 days the transaction would be re-evaluated and could be renewed based on Norfolk’s decision. We were feeling very excited at this moment and we were given information on the Greenbriar and Camden models the included amenities for Woodmont and Blair Oaks subdivisions. We were informed we could actually look at the Camden model in the Oak Hills subdivision. On July 23rd we, along with our agent Andrea, went and viewed the Camden and met the new homes sales consultant, Chad. He was very knowledgeable of floor plans, elevations and options that were offered and we were very impressed. When asking about the cost of upgrades, this is the first experience of misinformation that we were given. Chad quoted us a price of $3,900.00 for the addition of a 4th Bedroom with included dormer on the Camden model and $1,900 for the addition of a dormer window in the bonus room. Chad did state that Oak Hall’s prices may differ slightly but he did give us a copy of Woodmont’s Pricing List for upgrades which listed the 4th bedroom with included dormer for $3,900 and the additional dormer in the bonus room for $1,900 just as Chad had quoted us. After viewing the Camden model and getting confirmation that we could add a 4th bedroom with included dormer for $3,900 and a dormer in the bonus room for $1,900, we started to lean towards using Norfolk as the builder of our new home. After further research on Norfolk’s company we discovered that since its inception in 1993, it had become the number one builder and land developer in the Ann Arbor, MI area and even expanded into additional markets in TN and AL. Even with the slow downturn in the market, Norfolk was still thriving with expansion so we felt we were dealing with a reputable company and we were convinced that Norfolk would be the builder we would use to build our new dream home.

On July 21st our agent, Andrea, confirmed with Amy(Norfolks sales consultant) that we would meet on July24th to submit a contract on the Camden model. On Sunday, July 24th, we, along with our agent and Amy, met at the Paris II model home in the Woodmont Subdivision. During this meeting we encountered more misinformation. We started to write the contract on the Camden (elevation A). The double incentive money for the month of July was $7,500. With the prices we had been quoted for upgrades, we wanted to add the 4th bedroom with included dormer for $3,900 and the dormer for $1,900 which would equal a total of $5,800. We thought we would still have $1,700 for cosmetic upgrades, which didn’t have to be written up at this time. We advised Amy that we wanted to finance so any structural additions or upgrades above that amount would be paid for out of the $7,500 incentive money which was being offered or we would pay for them out of pocket with cash.  With the $1,700 left in incentive money, we didn’t feel there would be any problems. At this point Amy informed us that Chad had quoted us incorrect pricing and the paperwork for Woodmont was incorrect as well. She stated the price of the 4th bedroom with included dormer in Norfolk’s system was actually $8,900 and not $3,900 as we had been quoted and verified on Woodmont’s paperwork as well.  Amy did apologize for the misinformation and stated since we were told the 4th bedroom with included dormer was $3,900 and the dormer in bonus room was $1,900 and given documentation to verify these prices, she would up our incentive money to $11,145. This amount would cover the cost of the 4th bedroom with included dormer ($8,900), the dormer in bonus room ($1,900) and a free garage door opener ($345).   We opted for the 2nd sink in the Maser Bathroom instead of a garage door opener so that would bring our total incentive total to $11,100. 

During this meeting we also encountered more incorrect information. The amenities list for Blair Oaks Subdivision states that free standard features in the community are stainless steel under mount sink and 6 lines (phone/cable). Amy did state to us that this information must have just been copied and pasted from Woodmont’s standard features list and that this was incorrect as well. She did state that she would honor what was on the amenities list for Blair Oaks, which we did sign, and we would receive at no cost because of an error on Norfolk’s part. After several discussion with Amy on different lots which were available it was also never disclosed to us that some of the lots in Blair Oaks had to built on crawl spaces and not slabs so this would add an additional $5,000 to the purchase as well. This was another surprise, which we were never told about, but since the lot (Lot 11) we selected was being constructed on a slab, luckily this did not affect us. So at this point we had an agreement that the incentive money would be increased to $11,100 and Norfolk would honor their errors in the amenities guide. Our agent did have some questions on the wording of the contract so she took the contract home to go over it. Amy and our agent, Andrea, met on Friday, July 29th to go over the wording of the contract. Our agent did verify with Amy that as long as the contract was written up and signed before the 1st of August (even thought no one would be in the office over the weekend) that all incentives would still be available. We all met back with Amy on Sunday July 31st in Woodmont to sign the final paperwork. Amy stated to us several times that there would not be any problem at all increasing the incentive money and that everything should be a go. We got copies of all the signed contracts and initialed paperwork for elevations, structural upgrades, etc. At this point we were very excited and even went to our selected lot, Lot 11, to put out a SOLD sign. This was a very exciting time for my family as Amy even took pictures of me and family on the lot in front of the SOLD sign so we had no reason to believe that the deal would not be done.

On August 3rd our agent, Andrea, delivered the bad news to us and we had to deal with
more incorrect information from representatives of Norfolk. She received confirmation from Amy that Norfolk would not honor the increase in incentive money of $11,100. This was very puzzling to us in the fact that we figured Amy would know what could and could not be offered. Amy stated that she could increase the incentive money so we had no reason not to believe otherwise since she was the new homes sales consultant for Blair Oaks community. Amy stated that Norfolk had countered our offer and even though we were given misinformation from Chad and the Woodmont pricing list, the price would still stand at $8,900 for the 4th bedroom with included dormer and $1,900 for the dormer in the bonus room. She also stated that Norfolk would not honor the $11,100 increased incentive she offered but would increase the amount to $8,900 to cover the cost of the 4th bedroom with included dormer. We were advised if we wanted the dormer in the bonus room ($1,900) and the 2nd additional sink in the master bath ($300), these options we would have to pay for out of pocket. Amy also indicated that Norfolk did not agree with the 90-day marketing/contingency period on our current residence, which was offered by Amy. She said that Norfolk only wanted it to be 30 days and they would reevaluate the contingency of home to sell and decide at that time to extend the contingency period. This was puzzling for a number of reasons. First, why would Amy offer the 90 days when it wasn’t doable? Also in the current real estate market today, its not that realistic to get our house under contract and closed within a 30-day timeframe depending on the buyer and buyer’s lender.

At this point we were honestly getting very frustrated because every time we hear back from Norfolk, it seems that information was changing. Amy did forward this to her division sales manager, Karen.   The response we got was that we should start with a purchase price plus the 4th bedroom with included dormer. When the contingencies were removed, we would write up addendum and deal with the $8,900 incentive money at that point. Any additional upgrades would be paid for cash out of pocket and this way everything would be zeroed out and this would not increase our purchase price which we wanted to finance. We felt we were getting the run around at this point with all of the misinformation but we felt concessions had been giving on both sides so this was a deal in the end we could agree to and live with. 

Now it is Friday morning, August 5, 2011, and we hadn’t heard anything back from Amy or
Karen in past two days. Amy gave our agent, Andrea, a call and asked had she heard from Karen? Andrea stated no she had not and Amy informed her at this time that Karen would be our new point of contact, as she was no longer employed with Norfolk effective immediately. Finally, my agent did receive a voice mail from Karen and returned her call. Now we received more misinformation from Norfolk. Karen stated she hated to be the bearer of bad news but that Norfolk would not honor the original incentive amount of $11,100 nor would they honor the counteroffer of $8,900 in incentives, which was just offered to us a few days ago. Karen also stated that the base price of the Camden A had been reduced to $5,000. The new price of the upgrade of a 4th bedroom with included dormer had increased to $9,500. Karen stated that Norfolk would not offer any incentives on offers until the sale of home contingency was removed and that they would not honor the $8,900 incentive which was agreed upon just a few days ago. She stated once the contingency was removed we would have to take whatever incentives were being offered at that time and if there were no incentives being offered, then we would not receive any.

At this point we feel that all of the misinformation given by Norfolk has caused us a
considerable inconvenience on our part. It seems as if information isn’t being distributed company wide and one part of the company isn’t aware of what the other part of the company is doing. For example if you look on Blair Oaks web site as of Friday night 08/05/2011, it states that granite countertops are an included feature, which I know is incorrect. Homebuyers don’t get to meet face to face with owners so representatives of your company are considered Norfolk to us. We feel that we have gone through proper chain of command dealing with our local Norfolk office to no avail. From our standpoint we fell that that the Tennessee regional office is attempting to sweep our issues to the side and finally correct all of its mistakes as they make the move from the Woodmont subdivision in to putting its focus strictly on Blair Oaks. This is the reason we are contacting Norfolk Corporate as a last effort for a resolution. We did research on Norfolk before deciding to go with the company as our builder and felt it was a reputable company. At some point integrity and honesty has to come into the picture as I feel Norfolk’s reputation is on the line not only with my family as a homebuyer but with our agent’s company Crye-Leike which is the number one real estate company in Tennessee. We are writing in hopes that Norfolk will do what is right and honor its offers that were extended to us. It seems that when Norfolk was focusing on Woodmont and not giving a lot of attention to the Blair Oaks community. There have just been countless surprises, a lot of misinformation and then a lot of just flat out wrong information. We do understand sometimes there are increases in materials cost and it would be very nderstandable if we had just started trying to write a contract today, we would fully expect to go by the updated list on 08/04/2011. This is not the case as our contract was written in July. Therefore, we would fully expect Norfolk to keep its’ word and deliver what was offered to us. If you would look into this we would greatly appreciate it.

I look forward to hearing back from you soon,

C.R.
___________________________________________________________________

Here is the response back from Norfolk Homes on August 8, 2011

Kevin Dattilo - Division President of Tennessee
Kevin Martin - CEO Norfolk Homes

Good afternoon,

My name is Kevin Martin, I am President and CEO of Norfolk Homes. I have read your letter regarding your interest in purchasing a home in the Blair Oaks Community. I have also spoken with Kevin Dattilo the Division President in Charge for TN. He has briefly shared the history of the communications regarding your offer to purchase in Blair Oaks. If I understood him correctly, he agrees, there was a price error on the option for a fourth bedroom on the selection sheet at Oak Hall. He was also aware that Amy had written up an offer to increase incentives to cover the error. The issue that kept him from accepting the offer is not one of price, as I understand it from my conversation with Kevin Dattilo. The problem is the contract is contingent on the sale of an existing home.

We take contingent sales on a limited basis and do not start the homes we do accept on that basis until the existing home sells. With the limited number of lots in the Blair Oaks community, Kevin did not feel it was a good business decision to accept this offer. He did agree to honor the price as listed on this lot if it is available, or another standard lot, if you are able to sell the home and purchase non contingent in the next 90 days. We would like to have you as a Norfolk customer, and appreciate you and your agent for considering us. I would be happy to discuss this with you by phone or in person when possible if it would help make this purchase work. As your agent can share, an offer is an offer until the broker signs an agreement. The offer you made is acceptable for an immediate sale that can close yet this year, which is one of the reasons we offer aggressive incentive at times or accept lower offers. As a contingent sale in this community at this time of year, accepting the offer is not a good business decision.

Please let me know by phone at 615.591.6400 or email Kmartin@norfolk-homes.com, if I can be of further help. Kevin Dattilo has full authority to make decisions for his division and he can be reached at the same number or by emailing Kdatillo@norfolk-homes.com. Thanks again for your interest in Norfolk Homes, I look forward to speaking to you soon.

_______________________________________________________________

As you can see from the response above we feel we got the basic corporate response without really addressing or accepting responsibility for any of the misinformation we were given by any or their represenatives!   None of our concerns were addressed and he just basically put it back on the contingency and sale of our home. 

Red flag #1 that we should have pursued other builders but the saga continues.........

When we signed the contract in August, Norfolk wanted us to do our selections at that time. Honestly we didn't feel we should have to do them because our house had not been sold yet and we didn't want to go thru doing selections and get on this big high if our house never sold.  Also, we had no idea of what incentive money we would get(if any)so this was a process we did not want to do at this time.  This was something Norfolk insisted on being done so we went thru the procss just basically selecting all builder grade options at this time.  We were informed by Norfolk's design co-ordinator Linda Totok, that these options were not final and that we would be able to make changes up until the pre-construction meeting when all things would be final at that point.  That gave us some reassurance in making our selections so early in the game knowing that they could be changed at a later date.