False advertising and Bait and Switch. Meritage utilized a similiar technique to lure customers into the Mesa - Desert Valley sales office. This is what they did:
Meritage posted prices for the 'Heritage Series" models (the mid-range home in a 4 series 500 home subdivision. The Heritage series were the fastest selling and most profitable for them.
This was spring 2006 during the late peak of the AZ housing rush. Keep in mind that they (Meritage) had already increased prices tremendously to exploit the AZ housing shortage in re-sale homes. General price range was posted on large signs outside subdivision. Specific pricing was printed on plan/model/pricing sheets within office of Desert Valley Subdivision.
After we walked through the 'Heritage series" models we went into the sales office to inquire about pricing. We were interested in two models "Joshua Tree' and 'Palo Verde'. We spoke with sales rep: Darren. The specific price for the Joshua Tree was printed somewhere around $369,000 depending on elevation, lot and buyer upgrades or adds.
We were told though, even before discussing those options that we could not 'buy' this home or any for the advertised price. Darren informed us that he and Meritage had decided to insulate the subdivision by adding 'builder options' that would in effect "outfit all homes in the subdivision equally" therefore ensuring the value of the subdivison. These forced 'options' raised the price of each home 30k to 40k.
I inquired numerous times regarding this pricing structure and requested that I be able to purchase a house for the listed base price . I was scolded by Darren, he said; maybe Meritge is not for you. He must have meant to insinuate that if I questioned or was displeased by his pricing policies maybe I wasnt worthy to purchase or live in the subdivision.
I believe the sales tactic utilized by Meritage Desert corporation and its sales representatives was a form of fraud in which they lured in customers by advertising a specific product at a specific price, then they revealed to potential customers that the advertised good is not available at the advertised price, and in fact only an enhanced product is available at consideribaly higher price. We did in fact purchase a Palo Verde model home. I wonder if anyone else experienced this false pricing and purchased a home under the misleading practice. It meets FTCs qualifiers below.
1. Was misleading and decptive.
2. The representation and practice was directed at a specific group.
3. The practice was a material one and affected the consumers conduct and decisions with regard to the product. We might have chosen differently but for the deception.