Great Info provided by James Wexler
Until now, Phoenix area home sellers where those most severely impacted by the sharp drop in Arizona real estate prices and disappearance of home buyers.
A new victim is emerging; .....Buyers of new home construction.
There are an increasing number of builders who are suffering from this Real Estate recession. As a result, they are having problems with financing and many new home builders in Arizona are filing for bankruptcy protection.
In fact, nationally, there are a record number of builders going broke and looking to the U.S. bankruptcy court for protection from creditors.
The larger builders are suffering less than the small local builders who were caught in the Phoenix, Scottsdale downturn and national mortgage crisis and have less access to capital to weather the storm.
Let me be clear. The vast majority of builders in the Greater Phoenix area are stable and have the assets and resources to remain.
However, there are also a growing number who are struggling to meet financial demands. As a result, they are having difficulty continuing operations.
What does this mean to buyers?
The new victim is the buyer of new construction from these failing builders. Buyers bough lots, picked floor plans and are in the middle stages of the building process of their home. Now, there are increasing instances of builders not being able to finish the homes.
The buyers of new construction are in a unfortunate situation. They have put down a minimum of 10% of the home value. They have prepared to move into their home at a predetermined date. Now the builder is insolvent and filing for Bankruptcy. They do not have the financial capability to complete construction.
This is such a growing concern that Sam Wercinski, Arizona's Real Estate Commissioner, issued a Consumer Alert to buyers of homes form Arizona home-builders.
"Homebuyers and their real estate agents have the right to know if a builder is in financial trouble and what the status of their earnest money or home completion is. The Department of Real Estate can help provide this information and give assistance to consumers in need,"
The Arizona Department of Real Estate is now posting information on builders who are in bankruptcy or are having financial difficulties so consumers can make informed decisions and take steps to protect themselves.
A list of known builders is available on the Department's website: www.azre.gov Consumers should also reference the Commissioner's Advisory No. 2 on the website's home page which provides guidance for homebuyers, real estate agents and others impacted by a builder ceasing operations.
If you have been considering buying a home from a new home builder, make sure you check the list before making a decision.
If you are in the middle of the home building process, ask your Realtor for an update and information on its ability to continue and complete construction.