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Two years ago, I wrote about some of the pros and cons of buying a home in a ‘distressed’ subdivision. While there aren’t quite as many builder foreclosure properties as there were a couple of years ago, there are resales coming into the market now from people that bought builder foreclosures.
As with many things, all that is old is new again. I’m hearing from buyers more than any time in the last year and a half that they are thinking about buying a home in an abandoned subdivision.
As I said in the original post, there are both pros and cons. It would be a great post to go back and read.
Oddly, a couple of months after writing the post, I got a call from a local TV station that wanted to interview me on camera regarding this situation with a specific subdivision. Unfortunately, I was on vacation with my family and out of town. I wasn’t important enough to warrant a satellite interview…
Homes had originally been marketed at $600k to $800k in the neighborhood. As the market started to slide, the prices offered by the builder started to drop. They weren’t able to sell many units though. Eventually, the bank took over and was selling the homes in the $400k to $500k range. Just after the last existing home had been sold, another builder bought the remaining lots and began selling homes under $300k.
Some of the owners in the neighborhood that had purchased at higher prices were VERY upset with the builder and everyone else involved. One owner had purchased for just over $800k, and needed to relocate. Her house was not likely to sell for much over half that.
The bottom line is that there is potential for a VERY good deal… and there are some major pitfalls that could make that deal go very sour. Step in with your eyes wide open…
Related articles
- Wayback Wednesday… Dirty Little Secrets… (lanebailey.com)
- Built on Your Lot Homes (homebuildingsmart.com)
- Wayback Wednesday… A Foreclosure Mitigation Too Good to be True… (lanebailey.com)
