Standard Pacific Homes is going to claim bankrupcy? Should I still proceed with home purchase? (Austin: real estate, credit)

[cm29]

I am building a home with Standard Pacific due to be finished in April. We have put down some deposits and such but won't actually close on the house till it's complete. A good source informed us that Standard Pacific is planning on claiming bankrupcy- how will this affect us and our home purchase. Should we continue on or back out and explore other options?

[S6Sputnik]

I think you need to speak to your lawyer!

You would have no warranty and who knows what kinda house they build you
Probably not one of their finest.

[austifornian]

This is a tricky situation. If your earnest money is in a third party escrow account, you are relatively safe. If SP has your money, you are at the bottom of the list of creditors as an unsecured creditor. Your best bet would be to consult with a real estate attorney who could help you understand the situation clearly and figure out your best move from there. I would do this sooner rather than later.

[austin-steve]

Several builders will be filing bankruptcy soon. Not because of anything terrible in the Austin market, but due to national problems.

I agree, call a real estate attorney.

Steve

[fastz28]

Steve,

Do you mean in general or do you have inside information on which ones are going bankrupt?

[Soccersupporter]

Originally Posted by cm29

I am building a home with Standard Pacific due to be finished in April. We have put down some deposits and such but won't actually close on the house till it's complete. A good source informed us that Standard Pacific is planning on claiming bankrupcy- how will this affect us and our home purchase. Should we continue on or back out and explore other options?

My wife works for a local homebuilder in Fort Worth and told me the same thing but she could not remember where she heard it. I think a lot of the larger homebuilders are really suffering right now. I know Standard Pacific is selling a lot of the lots off in CA but I had never heard anything about a BK. That is a tough position to be in, good luck and definitely seek legal advice.

[ITChick]

Originally Posted by austin-steve

Several builders will be filing bankruptcy soon. Not because of anything terrible in the Austin market, but due to national problems.

I agree, call a real estate attorney.

Steve

Steve, do you have a website that shows which ones might be? It would be good to know. Thanks.

[Big M]

Anyone see their last quarter results?

A loss of 975 million? This is on top of a loss of 500+ million in the quarter before that.

Holy moly..and the market isn't going to improve for at least another year.

[HappyTexan]

But if you do a google..it's still rumor. They did not file. And I think there will be more filings in the coming months.
Homebuilding had slowed to a crawl by me (5 new subdivisions popped up since last summer).

[austin-steve]

Originally Posted by fastz28

Steve,

Do you mean in general or do you have inside information on which ones are going bankrupt?

I was in an Economic Outlook seminar today with a real estate economist and he told us that several of the larger builders are in trouble. I'd rather not drop names.

The smaller regional and niche builders are in better shape because they don't have the national exposure dragging their books down. One example given of stable builder was Portrait Homes, who has been in Austin less than a year and who builds entry level no frills townhome products for a certain niche buyer segment (70% of their buyers are female). They know their market very well and are very careful, according to the economist we heard.

It's the big national builders who have a hard time responding quickly to market conditions. Probably what we'll end up with a year from now is a shortage of new home product as we are heading into an over-correction.

Steve