Bargains In Buying Half-Built Homes?

house contstructionI spoke to a fellow agent a few days ago about his client’s desire to purchase a “half-built” home. In an interesting bit of ironic timing, I found an article on the same day about this very topic.

If you are inclined to seek out short sale opportunities, foreclosures, partially-built, or unfinished homes, you may find some bargains, and I want you to know that there may be risks as well.

Here are some observations and excerpts from the article I read.

Call, text, or email me today! …especially if you’re ready to talk about selling your home, buying a new home, or know someone that is moving!

We’ve seen both foreclosures and short sales all over the country for years. Now in an interesting addition to the mix we’re seeing more half-finished homes for sale: bare-stud, bare-yard houses abandoned by new home builders, and left to languish on the market, or perhaps not even on the market.

Imagine a dusty road with tumbleweeds rolling across the dirt-scape among a sea of vacant shells, empty foundations, and unfinished parks and playgrounds.

Mary Shanklin from Rismedia says:

Purchasing a partially-built home is nothing new; during the housing boom, many new-home contracts were signed before even a slab had been poured. The difference now is that the builder might no longer be around to finish the job, particularly if it’s a house started by a custom builder who subsequently lost clients, financing, or its entire business.

And that’s really the concern. In some cases you’ll be facing an opportunity to negotiate what may amount to a short sale/short pay with a lender that has a lien on the property for the construction costs, or perhaps even the land purchase, or both.

More from Shanklin’s article:

Nationally, the percentage of incomplete houses among new homes listed for sale rose this year from 39% in January to 43% as of October, according to the U.S. census. Though those numbers included homes under contract and still under construction, they also included unfinished homes abandoned by builders and placed on the market by banks.

I’ve come across a few of these types of situations locally, and while there’s a handful of them around the Denver metro area, and even up north around the Boulder county area, they seem to be the exception rather than the rule. Much of what I’ve seen like this cropped up on my radar last year out in the East Broomfield and Erie area.

Buying an incomplete construction project isn’t for everyone. Buyers who haven’t had a house built for them before may be getting in over their head, especially if a buyer doesn’t have some cash in the bank, and lots of patience. It’s also possible that out-of-town buyers may conclude they don’t have the right kind of local contacts to get the work finished correctly, however, that’s a problem that can be easily solved in our Boulder valley area. I have quite a few construction industry professionals to introduce you to for that.

And, if you’re thinking maybe building a new home is a good idea, but perhaps a vacant lot in the middle of one of America’s best places to live is a little less of a bitter pill to swallow, then check out this downtown Louisville lot for sale, or how about  a “Dwell” influenced home by VaST Architecture and Compleat Construction in this  energy-efficient remodeled home for sale in the Country Club Park subdivision of Boulder?

Have a look at  my neighborhood profiles, and  Boulder business profiles which can be very helpful and useful to find great local suppliers and info.

Call, Text, or Email me. I’m never too busy for your referrals.  As a real estate professional intent on giving back to the community, my relationship-based approach is exactly what you’ve been looking for in a helpful Realtor, and I will listen to you.

Zachary Epps, GRI, ABR, REALTOR®, full-time RE/MAX professional,  and author of the Boulder Area Neighborhood Guide.

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