New Construction Issue (Seller Attempting to Back Out)

[FuturePlan2]

Hey guys! I am in a jam and was hoping someone had advice or a similar experience.  I have signed a new construction contract for a home and paid my earnest money but now the seller is attempting to back out of the deal because he "claims" he cannot build the home at the agreed price for myself and another homebuyer that currently has a contract.  Apparently the lots are worth less than what the builder paid but that is the case with millions of homeowners and the banks and builders could care less.  They will also not sign the contract.  Is there anything legally we can do because this is putting both of the potential buyers in a jam with moving and finding a new home to build? If this was the buyer backing out, they could legally sue us.  Any advice would be great! 

[mynameainttracy]

I would get my money back and run. Do you really think he would build a quality product based on what the builder is now saying?

[FuturePlan2]

I completely agree.  I am actually pretty discouraged now from the entire homebuying process and probably will not proceed for quite sometime.  I've looked for months before I made a decision with safety and resell value being my main concerns.

[StartingOver10]

If the seller didn't sign the contract, then there is no contract.

It is far better for the builder to pull out now knowing that he can't deliver for the price quoted. It is better than getting into the middle of construction and then having to pull out or file BK. Get your money back right away. Make sure you request in writing so there is no doubt about it.

Take a break from shopping, then try again when you are ready.

[FuturePlan2]

Sorry I'm so late.  Thanks for the info everyone! I have moved on to a new builder and will hopefully get started soon with construction.