D.R. Horton Lawsuit Over Deceptive Home Sales & Financing Scheme
D.R. Horton Lawsuit Over Deceptive Home Sales & Financing Scheme
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Home price cuts accelerate shift to buyer’s market
Santa Clara County Highs and Lows
Summer 2025 Was the Strongest Buyer’s Market in Records Dating Back Over a Decade
"Los Gatos Home of the Week
Santa Clara County Price Reductions
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Introduction: Homeowners vs. Dr. Horton
Homeowners are suing Dr. Horton over a financing scheme. Now, what's going on here? For decades, we've been working with this, where we help represent the buyer, bring 'em to a new home salesperson, and what happens is.
Understanding Property Tax Reassessment
They present them with financing options, and there's a little-known thing that when you buy a house and you buy it for more money, the county is going to reassess your property at the higher cost.
Even when we sell a house, there's a supplemental tax disclosure that we have you sign. And I know it gets confusing 'cause you're signing 10,000 different documents and your hand gets a cramp 'cause you're signing so much stuff.
But it's something to realize when you buy a new house, you are going to get a supplemental tax chip. They're gonna say, You owe us more money. And if you're in impound, sometimes the financing will not give you the new estimated tax cost or fee.
Illegal Financing Practices
This is a problem because new home sellers have consistently been selling this as this is your finance fee. This is how much you're paying your PITI, and it's a low cost because they make it look more appealing. Bait and switch. It's illegal. You have to say, Hey, look, when you're looking at your little financing disclosure, this is how much the property is selling for.
This is how much your estimated taxes are going to be. Well, we can't estimate that. We don't know how to do that. Yeah, you do. You absolutely do. And here's the thing, a lot of times they will give the seller the home. The new home places will give an incentive to use their financing because their financing gives the builder a kickback, which is illegal; they disclose it so it's not illegal. They give 'em a little bit of vig on the financing fee. I can't do that. I don't do that. I give you three lenders. You can use your own. I never force you to do anything on the financing side 'cause it's such a sticky situation every time. We come in and say, Hey, this is your financing charge based on your new home cost.
This is what your taxes are going to be. Make sure you put money away. If you have an impound account, this is what you should be packing away. Matter of fact, I have it here from my parents. I have a little tax bill for my parents' house, and I got that paid into the impound, so that should be taken care of.
No problem. All right.
Class Action Lawsuit Details
This class action lawsuit is against Dr. Horton, against all the home buyers, saying that they did not disclose that their taxes are gonna be more at the end of the year. So at the end of the year, your new home per bill goes up significantly, sometimes by 30, 40%. And if you're just squeaking into a house, saying this is affordable, now you have this extra.
Cost, there's no way you're gonna be able to afford it, which is going to hurt you as a consumer. That's why this lawsuit is coming through, and this is big because the way the finance disclosure works is that they just give it to you. You sign it, that's it. They don't have to present what the taxes are going to be.
They should. We can't give tax advice. We don't know how to do it. Yeah, you do know how to do it. We always say this is what it is. This is about what the percentage rate is in your area because we know all this other stuff. This is what it does to your bill.
This is your monthly PITI principal, interest, taxes, and insurance, right?
Insurance Scams in Fire Zones
Insurance is another scam that's going on right now. A friend I had dinner with last night, and she lives up in north Sacramento, in the mountains, and she has to pay FairPlan, a nd FairPlan is a total scam. It's ridiculous.
Amazingly, people are still buying houses in fire severity zones, like look right there. I don't even know, like Mount Vernon, that whole thing's a big freaking tinderbox, right? It's because California doesn't take care of its forestry. It's a shame. It's a scam that's going on.
So Dior Horton, look, here's an example. Frankie Santiago was promised a monthly payment of 2146 for the Lake County, Florida, with A-D-I-H-I, which mortgage which is who they said you can use. Now, sometimes I'll go in with my buyer and say, Hey, we're already approved with the loan. Here's your interest rate, and then they come in with a lower interest rate, which is not hard to do, but then they tack on extra fees, et cetera, and then they don't show them the taxes, so they go, Oh, I only have to pay 2164.
And at the end of the year, they're like, oh, guess what? You got reassessed at 30% more. It's ridiculous. That should be illegal. That should be completely illegal. It should be tacked into the system. When you present that this is what your tax bill will be every month, period.
You have to understand that going into it is an issue, and it consistently happens. Five states joined in the FDC suit against Zillow, Redfin for alleged antitrust violations. We talked about this last week. It was the rental thing where Zillow and Redfin.
Conspired, I guess you can say, to say Redfin's going to start pushing their traffic over to Zillow so that they have a monopoly on this and it's antitrust. Defendants of anti-competitive conduct have harnessed these states. Harm these states' respective economies and general welfare, depriving them and their residents of the benefits of competition. Okay, you can readThat'sere's where I can share in the description down below, and right next to it is the link to my blog.
Home price cuts accelerate shift to buyer's market with fewer active buyers. Longer listing time. Sellers are increasingly slashing. Prices get to the point where you're like, shit, I just gotta sell this house.
I can't afford it now. It's not happening in the luxury markets. It's not happening a whole lot in the haves markets, but in the have-nots, wants markets. The new housing buyer market. It's happening. A lot of sneaky stuff's happening. I just had a buyer come back to me with an addendum with $2,000 extra charge that we didn't agree to.
So I'm like, Nope, get rid of it. I'm going to cancel this contract, yada yada. This will shift back to normal. What's normal? It'll shift back to a seller's market. We're going to see at the end of this month, another price cut, and then in November, and then things will start warming back up. Come March, spring is our selling season.
So my suggestion is, and I'm telling a lot of my sellers this right now. If you're gonna sell a house and you don't have to sell it right now, wait until March. There'll be a lot more buyers out there in March. You can sell right here, right now, but you're going to get low-ball offers.
You're thinking about Andre in a contracting market. So if you're in a place where you want to buy a house right now, it's great. We're in a downward market. Your ego is telling you, Oh, I need to get this 'cause my house, the same house, sold down the street for x. And I think it's worth this much.
Buyers are smart. They have Zillow and they have Redfin. They know the cost and value of everything, and they see other houses, and they're like, I'm not going to look at this house. I'm not even gonna bother. It's missing this, it's missing that.
And if you're overpriced, they're definitely not gonna look at it. So be careful about that.
Los Gatos House of the Week
This is the Los Gatos House of the Week. This is brand new, $2.1 million Creekside Village, not my listing. Three and a half baths built in 2005
Look at that. It's in an HOA $270 a month, and you're in pocket homes. We're gonna take a look at where it is in a minute, but inside it looks nice, right? 2005 is pretty new. I mean, the shower's a little dated. There's a temporary pergola there to get out of the sun.
On those hot days that I don't know why they would get that. That doesn't make and you get a tandem garage. That's awesome. Price is a premium. Space is a premium, so you have multiple bedrooms there. Good. This is a nice house. It's gonna sell pretty quick, even though it's in an HOA. And then this one right here, this is my neighbor.
He didn't use me, and mostly because he bought on price. Let's take a quick look at this inside here, so you can look inside. You got promised a price. That didn't happen. It was on the market for 127 days. They lowered it and they lowered it, and they lowered it and they lowered it. I talked to the lady, she's like, yeah, he's stuck on this 15, 5 number, and it finally sold at $1.2 million.
This is the lowest list price to sell price ratio of the week. It's just when you have a basic house that doesn't even have cooling and has never been looked at.
The window wall unit does not have air conditioning.
Importance of Air Conditioning in Home Sales
Guys, I'm telling you, air conditioning is a 10 to $15,000 investment, and the ROI is about 180 to $200,000, period. If you don't have air conditioning, your house is not gonna sell for what you think it's worth. It's a huge thing.
You have to have air conditioning. Your house won't be looked at. Now it's different if you're on the coast. If you're in Santa Cruz and you don't have air conditioning, it's normal. If you're in Hollister and you don't have air conditioning, it's normal because around four o'clock is when it gets hot.
It's the hottest part. And then you get the sea breeze coming in, and it cools it down. Santa Clara County. It doesn't do that so well. It doesn't keep it cool. And when your house doesn't have air conditioning, and look, I've only operated my air conditioning maybe twice this year.
I have my windows open all the time, and when it gets hot, it's fine and it'll cool down 'cause we haven't had a hot summer. But you need to have air conditioning in your house if you're going to sell it. Otherwise, people are going to walk away from it. It's the one extra thing that just makes 'em look at everything else and say, This house isn't worth it.
I'm gonna move on and look. This started, and they lost $350,000 because of staging. Which is $2,500 in that price range and 10 or $15,000 for air conditioning. You could have had this thing sold a lot faster, and they started in April; they had it overpriced for way too long. Pricing is very important. Okay, and this is the biggest jump, I wanna say it was 132% or 133% over list price. This is in Los Altos. Start at three, two, sold for four, two, sold for a whole million dollars more. Three bedroom, two bath, 1500 square feet, built in 1951, and nothing special about it, even the original kitchen. Crazy, right? Crazy. See, if you know your market and you understand you price it under,
You're gonna get it sold.
Santa Clara County Housing Market Overview
Let's see, and this is the lowest home sold in Santa Clara County. This is right by Reed Hillview Airport, Manata 8 99, originally. Sold for a hundred percent. Sold in two days. Yep. And then this is the highest, most expensive house sold in Santa Clara County.
It's in Los Altos again.
Boom. There we go. Right there. $11 million. It came down a little bit, but it was on the market for 49 days. So if you don't price it even when you're a market maker, if you don't price it right, you're not gonna get what you think. Your house is worth $11 million. This is awesome. Let's see. It's five bedroom six and a and a five-bedroom, six-and-a-half-bath, 4,900 square feet.
Let's see. The other one in Los Altos sold for $4 million. You take this with a quarter acre, you tear that house down, put a couple of million dollars into it. Next thing you know, your house is worth $12 million. That kind of stuff is happening all the time. Let's see if they have cooling.
Central AC, multi-zone. No kidding. All right.
There you go. We have almost 1100 homes for sale has been coming down considerably. We're topping out at like 13, 1400 homes. Got pretty close to 15 earlier in the summer. This is the cold time of the year. The market's cooling as the temperature's cooling.
We have 256 price reductions. Which is 23% of the housing market right now has seen pricing reductions. See home price cuts accelerate shift to buyer's market. We're not there yet. In other markets. There are buyer's markets like in Texas and St. Louis, et cetera. We're in buyer's markets, but in Santa Clara County, we're still seeing housing, inventory, and months of inventory are less than. Six months.
So we're not in a buyer's market yet. We're pretty balanced, and we've been asking for a balanced market for the last three, four years. In 2021, we're giving $400,000 over list price on average. Now we're at about a buyer's market. This is a perfect time to buy.
Prices are coming down. Rates are coming down. There's not a lot of competition. You can name your price, and if you don't, you move on to the next house. And if you're selling, yeah, you're gonna lose money on the sell side. But if you can hold it for six months and see the market return, it's a gamble, right?
'cause I can't tell the future. But if you hold onto your house for six months, wait until March. Put it on the market, get another house, and you start moving in there. Now you're good. The market continues to take a dump. We'll rent it out for a little bit.
All right.
Conclusion and Final Thoughts
That's it. Thanks for watching. I'm Vito with Ano. Appreciate you watching. We'll see you out there.
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Vito Scarnecchia
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