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cassie701
1359 Posts |
 Posted - 05/14/2008 : 08:51:18 AM
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A builder closes their doors leaving homes unfinished, cannot/will not honor contracts to build (even with escrow desposits) and have liens on properties that have already been sold?
Will the unfinished houses and land get auctioned?
Does anyone know exactly what happens in a situation like this?
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oldmlb
136 Posts |
Posted - 05/14/2008 : 10:42:39 AM
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| If you're one of the Buyers, hopefully, your deposit was to Escrow. If directly to the Builder, say bye-bye to your cash. If you closed a single close as the owner, and the Bank advanced funds to the Builder and he/she didn't pay Subs that are now liening, you probably have some recourse against the Bank as the Bank should have required inspections and lien releases from materialmen. You then just need to replace the Contractor. If the homes under construction were on a loan in the Builder's name, the the Bank gets them back. They are not real good at getting half-finished houses completed. If you buy one out of Bank REO, you'll probably need cash or a "stiff" money loan to complete it. Good luck, trying to catch falling knives is risky biz if you don't know what you're doing. If you are astute however, you could make a buck or two. Just remember, Contractors is Contractors is Contractors. |
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EMScommercial
5052 Posts |
Posted - 05/14/2008 : 10:48:55 AM
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Good advice from oldmlb....
Are you asking due to a client having an issue? |
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cassie701
1359 Posts |
Posted - 05/14/2008 : 10:58:33 AM
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Thanks!!!
The builder is Poinsett homes and they owe $5.3M to contractors and there are liens all over the place. A friend of mine was having a house built, put $15K down with builder and they are not finished building yet. Her neighbor closed on her house but there are liens on her property and she is afraid she will lose it.
Its a complete mess.
An investor friend is looking on how he can make a quick buck during this whole ordeal.
I feel so bad for them. Its not just one subdivision...there are alot with unfinished houses, empty lots, homes that are built with liens and homes that closed with liens. |
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oldmlb
136 Posts |
Posted - 05/14/2008 : 2:04:20 PM
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| BTW, a foreclosure wipes out mechanics' liens. |
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