20% Builder Price Increase 10 Mo Into Contract

[Jessica Jordan]

We need some advice. My husband and I have been looking forward to moving to Draper, UT for the past year. We locked in a house at $559k in Nov 2020, and were told it would be finished late spring to early summer. We sold our house in Texas Dec. 2020, anticipating we would rent from our in-laws for a couple of months (considerably cheaper than our mortgage) before moving into our new house. Well, with Covid there has been delays, and they started excavating our lot last week. This morning we received an email saying they are planning on increasing the cost of the home by $109,182 (about 20%). We have a call scheduled to "discuss" this, but they basically said if we aren't able to come up with the money they will cancel our contract, refund us our earnest money, and give us $2k for the trouble. Our realtor said builders all over SLC have been doing this. In fact she explicitly went through our contract with the sales rep to discuss this possibility and was assured it wouldn't happen. The builder said if they were to relist our house they would list it at ~$720k, so we would still have equity in it if we paid the premium. The issue is the down payment would wipe out all the money we set aside to invest with.

Has anyone experienced this? Is there any recourse to this?