Thursday, December 31, 2009

Would You Buy a Half Built Home?

Due to rough financial times for everyone, whether it is a builders or a owner, custom homes are not being completed and banks are foreclosing on half built homes.  As a buyers agent, I see them more frequently in the MLS, but the homes have not fit any current buyers profiles as everyone needs a completed home due to not enough time and money.  But, for those with time any money, there could be some bargains, but you have to do your research before and during your offer process to determine if it is the right investment for you as there can be potential issues to consider, which are well lined out in the recent Orlando Sentinel article.  Such items are, what liens or title issues are on the property, is there problem with construction of the home due to neglect, or lack of resources to complete the home after closing.

More so, it is more prevalent to find a completed home in a new construction community, from a production builder, in which the community is half completed.  You find this more in outskirts of Orlando where demand is slower.  In these situations, the builder has decided delay building the homes until market prices shift, delay or not complete community amenities, or builder has decided to sell remaining vacant lots to another builder.  Nona Terrace and Independence which were Engle Home communities where caught in this situation with unfinished communities.   Not all, but some buyers do not like that the community that is not built out as it not established neighborhood for their children, the community can have a desolate feeling, and you do not know the type of style or residential property that will be eventually built on those lots.

Communities can get finished, most recent examples, Brighton Landings was initially built by Engineered Homes, now remaining lots being built by an national builder DR Horton and amenities are on their way to completion.

Many builders have experienced financial difficulties in the past few years, it always important that you have your deposit held in the escrow account when building a new home.  This provides protection for your money should the builder not able to complete the construction of your home.  Having your money in an escrow account rather than a builders interest bearing bank account should be an option on your contract for purchase.