New house Build

[ttvjef]

Trying to keep calm here. We have saved all our lives and signed a contract to build our retirement home in Florida on Feb 28. Such bad timing. We have put a 32k deposit down on a 380k new build. Delivery is scheduled for Q1 2021. We are reeling from what is happening and trying to keep calm. Our contract is pretty much in the builders favor with no “disaster out clause”. So far we have spoken to the builder and he does seem to be very understanding. The development has just started and there are only a couple roads built with the sandy lots established. Nothing significant built out yet. We spoke with him yesterday and he says that he’s been building for 30 years and has gone through all of the other down turns and believes that this will also pass. We asked him what it would take to cancel; he actually indicated that if things in the economy do not improve he would cancel and refund our deposit minus administrative costs. We appreciate his sentiments but of course this could all be just lip service. Does anyone have any ideas on how we should proceed?
We are trying to remain hopeful that people recover from this terrible illness and our way of life returns to somewhat normal. Stay safe and healthy everybody.

 

[Aerides]

Your dilemma is bigger, but not unlike the challenges in this thread for a new pool:
https://www.early-retirement.org/forums/f28/major-purchase-now-102712.html

Your builder may well be battle-tested and financially solvent. But there are so many unknowns right now: City/County permitting and inspections, all the subcontractors, etc.

Assuming you don't have to put down more money for a while? Then I'd just ride it out, and expect to add a year to your end date. If there are other incremental payments along the way presumably those come from specific milestones and such. I'd also keep my eyes on the selling prices for remaining lots as a potential to renegotiate down the line or change your mind. You don't want to close in a year or two on a $380 house that's now selling for $200, of course. We have no idea if the housing market will plummet like 2008, and maybe not that much since it's not the root of the issue, but I think everything will take a hit along the way.

Either way, for sanity, I think right now I'd just pretend everything is frozen and re-assess in 90 days, but plan on figuring out where you'll be living in 2021 because significant delays are almost certain.