More people buying into new developments are being left high and dry when their builders file for bankruptcy. Here's how homeowners can protect themselves.
We have a builder in The Florida Keys who took deposits from many people and sold the company. It turned out he never turned the deposits over to the new owner. A lot of people are put a lot of money. I'm one of them to the tune of $35,000.
Wow, that is really sad and really scary. I appreciate the information as it is important for us as Realtors who represent buyers with builders to be awareof!
WOW, Being in Florida, I certainly try to get all of the details on any builders and develops before I take clients to show them properties. I hope you do the same.
Check out Wildwood, New Jersey for a study in how not to develop. Between the Builders, Building Department, Inspectors, Mortgage Bankers (sorry guys) with 1% payments, there are so many units empty, not able to be occupied and for sale that it's like Halloween Town. There has been several measurs taken to remedy the problems but I know several builders and investors that lost their "Donkeys" and went bankrupt.
You have to do your homework when buying into a unfinished development much like a NYC Co-Op, start with a Dun and Bradstreet Report, Better Business Bureau, State Licensing boards for the builder and even the suppliers on the site to start. Even a $250,000 investment is worth $400-$500's worth of investigative fees to set your mind and wallet at rest.
Jerry LaRose, Realtor, Short Sale Expert Orlando, Florida Real Estate Expert — Orlando Short Sales
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We have a builder in The Florida Keys who took deposits from many people and sold the company. It turned out he never turned the deposits over to the new owner. A lot of people are put a lot of money. I'm one of them to the tune of $35,000.