Over the weekend I read a local article that another home builder was closing doors. They are a very large local builder in Minneapolis, Minnesota. Of course I cannot say anything surprises me anymore. I worked for a bank that ended up closing their mortgage division, and everyone thought banks were the solid way to go.
However, this morning I had a gal call me that an agent had referred to me. She is trying to sell her home and build a new one under new construction townhomes. She cannot proceed until her home is sold. However, she has already completed a contract with the same home builder that is closing doors. She had put down $5,000 Earnest Funds on her initial contract with the builder. She of course wants to cancel the contract, since they have closed doors and due to not selling her home after the last several months. I of course can provide the letter saying she is not approved since she hasn't sold the home, as that is a contingency.
It made me think though, with the hype about not buying gift cards for Christmas gifts due to businesses closing. I guess the scary thing is it could happen with the a lot of industries. Legally, I think she is entitled to the earnest funds, however it still could be a headache to get that back.
I was wondering what real estate agents are suggesting to clients with reference to this and new construction home builds. It has to be a scare with clients or at least a thought? If it hasn't been, I think maybe it should. What do you advise personally to clients looking at these options?
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