When a Builder Goes into Foreclosure...

By
Real Estate Agent with The Lipman Group | Sotheby's International Realty #311723

A Nice Subdivision in Nashville Boasts THREE different builders.  One Builder is now going bankrupt.  My Client, a super nice guy who has been looking for several months has found his dream home!  Here's the catch:

It's one of the Model Homes of this Bankrupt Builder!

I have heard nightmare stories about this Builder - how he regularly goes into Bankruptcy under the Umbrella of his Parent company without really hurting the Parent company - only dismantling the Child company.  Did I explain that correctly?

spring clipart rain umbrellaSo he stays nice and dry and safe while taking advantage of those who purchase his homes and making loads of money to boot...

Back to my Buyer now:

Since I knew we would be dealing with this Builder, I did all the necessary research to find out exactly the situation they (the Child Company) were in. 

We put the offer in on the Model Home, knowing that this was going to be a sticky situation, but that my Buyer may still end up with his Dream House.

No response.  Have heard apologies from the Listing Agent as to why they have not responded.  She says it is not necessary to extend the offer reply date even though it has elapsed because THAT WON'T MATTER!

So I am expected to just sit back and wait on them.  I have heard a lot about this in bank-owned deals (think there is even a featured blog on it today!), but am I supposed to also expect these delays and hold-ups from a "Bankrupt Builder" as well? 

Yellow Question Mark

I grow weary of waiting for these builders and banks to give the same respect to an offer and a contract as we are all expected to!

 

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Rainer
32,680
Michelle Way
AVALAR Pro Realty - Jackson, MS
ABR, GRI, WCR
I am confused is this a short sale???????
May 05, 2008 08:05 AM #1
Ambassador
1,726,884
Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Emily...

My guess is they have to get lender approval of the offer, it may well be a short-sale. Hold tight, that means your offer may fly as it stands.

BTW did you know the term "family friendly" could be a fair housing violation?

May 05, 2008 08:07 AM #2
Rainer
91,793
Patrick Lambert
ALLY Real Estate - Waikoloa, HI
Hawaii Real Estate Expert
Sometimes we have to work with the system, even though it's not functioning very well. These tough ones are good the experience, next time it won't be so difficult. Chin up. Persevere.
May 05, 2008 08:08 AM #3
Rainmaker
232,207
Emily Lowe
The Lipman Group | Sotheby's International Realty - Nashville, TN
Nashville TN Realtor

Michelle - No it's not a short sale

Richard - I did not know that family-friendly could be a fair housing violation - that is amazing.  I certainly did not intend to be in violation - I am, after all, representing a single man in this transaction. 

Patrick - I agree with you - I think I was just having a moment  LOL, there seems to be lots of those these days! 

 

 

May 05, 2008 03:22 PM #4
Rainer
214,041
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~
Emily, I'm thinking if this is a bankruptcy, the court is where decisions are made.  You may want to verify that.  I don't know how long something like that takes.  I hope it works out for your buyer to be able to purchase the home. 
May 05, 2008 06:21 PM #5
Rainer
39,049
Michael Delp
Mortgage Pro - Telford, PA
I think patience is the only advise here. If the builder is indeed going bankrupt, he may have other things on his mind. I would keep following up and hope for the best. I guess it depends what your customer is willing to go through to get his dream house. Good Luck!
May 07, 2008 12:59 AM #6
Rainmaker
938,404
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

Emily - I would be very careful with any builder having financial problems. THis market has plenty of homes from good ethical builders. This is not the time to take chances.

You may be better off if the deal doesn't happen. THis home could end up being the money pit.

May 11, 2008 02:11 PM #7
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Rainmaker
232,207

Emily Lowe

Nashville TN Realtor
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