Builder Short Sales
A builder doing a short sale on a new construction property is just plain scary. What you as a buyer are being told, in a not so subtle way, is that the builder is probably not going to be able to cover any warranty work that needs to be performed on your new home. Having that builder backed warranty for the first year is a huge financial advantage. Getting a home warranty can rectify some of your exposure however many of the items that need to be corrected in that first year are cosmetic items that a home warranty does not cover. After all, the appliances are covered under the manufacturer’s warranty. I have yet to see a new construction home that does not have settling cracks and nail pops during that builder warranty period. Now, I don’t want you to think that I’m saying not to buy a Builder Short Sale. I’m just saying that you need to buy it at a price that makes it worthwhile to take on the additional financial risk.
Is It A Tough Market?
Sure the market is tough for the new home builders right now. It’s tough for everyone. Everything involved in our economy is tough. These tough times require that you, as an educated buyer, demand certain things from your agent. Possibly the most important thing that an agent can do for a buyer in today’s market is share the knowledge about builders and construction techniques that has been obtained through years of hard work. Not only the sharing of knowledge, but also the ability to obtain current information about the prospective builder’s financial status and prospects for the future. No one wants to be in a situation where they purchase a home today and the builder is gone tomorrow.
Educated Buyers Work With Business People
In the past the thought was that “If you build it they will come”. To some degree that was accurate. In today’s market educated buyers are working with builders and agents that treat their business as a business. The builders and agents that will survive in this market are businesspeople that operate and act like businesspeople.
Don’t Scare Me
The thought of one of my buyers purchasing a home from a builder via a short sale scares the mess out of me. I take pride in protecting my buyer’s best interest. I just don’t think this type transaction is a good fit for buyers who don’t understand the additional financial risks involved.
{ 3 comments… read them below or add one }
My wife doesn’t show them at all. Only 10% of the short sales here ever close, so for her it is matter of not wasting her clients time by showing them a property that has a very little chance of closing.
Happy New Year to the Richey family. Hope all is well. Charles I agree. It’s not that I won’t show a short sale, the problem is the time frame that it takes to get one closed. Most buyers don’t want to wait 2-3 weeks just to get a counteroffer. The buyers are on a time frame themselves. Investors may have the time to wait it out but not the typical buyer.
Mack ~ I agree with you about buying a short-sale home. At the very least the deal needs to include a warranty from a 3rd party! So many consumers fail to look at or even recognize the big picture. Buying a new home without proper backup is a scary proposition. That’s why consumers need a good Realtor, to bring to light all that can (or may) go wrong.
kk