Saturday, April 26, 2008

Another Reason NOT to Buy a New Build

There are many reasons NOT to buy a new-build home whether condo, townhome, or single family home...unknown property tax liability (no credit at closing), very limited warranty protection from developer, well-protected Seller (from liability that is), house settling (i.e. smallish repairs), and under-funded associations. At various home buying speaking engagements I'll often share my opinion that a new-build condo is the WORST type of home to buy. Because of all the above reasons with the under-funded association issue underlined. When you read of the $20k special assessment horror stories it's nearly always a new-build condo where the developer sold everything off quick, it was crappy, and the association was hardly funded.

Just to add another log to the fire, I see Kimball Hill filed for Chapter 11 protection last week following many other local builders, including Neumann Homes. ANOTHER REASON not to buy a new-build. If your Seller/Developer files bankruptcy while you're under contract with them to build a home, get ready for a lot of delays and possibly a quick refresher on the US Bankruptcy Code so you can get your earnest money back.

1 Comments:

At 10:18 AM, Blogger Equity Bad Credit Loans said...

It's not an easy time for us today, construction is slowing down more and more every day.
No more loans, we have any banks left over?
I'm still looking for one open(haaaaa).
Good luck to you.

 

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