What happens to spec homes when builder goes out of business? (for sale, foreclosure)

[SamIam9206]

When a builder (Evergreen Homebuilders) goes out of business, what happens to the spec/inventory homes they still have on the market? Do they then go to the bank in foreclosure or what? Could I get a good deal if they are out of business????

BTW homes has been on the market almost 3 years!!!- has been reduded $50,000 so far w/ no bites

[vette-dude]

I believe they go to foreclosure, I was in the process of purchasing a home that the builder lost their loan monies , but the lawyer in charge of the home at that time would not take less than the home listed price and I was also told it could take up to 6 months through the court process. I surely didn't want to wait 1/2 a year to purchase a home and move in, so I kept searching for another new home. Hope this helps some.

[Swimmom32]

Evergreen homes is out of business??? they are still building in Union County unless something has changed...

[SamIam9206]

Unfortunately yes..... they are out of business. I thought that they had just pulled out of this neighborhood because of the market. But after many people in the neighborhood told me so, I called a realtor and he told me that sadly they had gone out of business!

[SamIam9206]

Originally Posted by vette-dude

I believe they go to foreclosure, I was in the process of purchasing a home that the builder lost their loan monies , but the lawyer in charge of the home at that time would not take less than the home listed price and I was also told it could take up to 6 months through the court process. I surely didn't want to wait 1/2 a year to purchase a home and move in, so I kept searching for another new home. Hope this helps some.

Well that is horrible news, I was hoping to get a good steal. Although it doesnt make sense for them to do that because all the builder needed was the loan for the materials and labor, so basically the house should sell for whatever the house took to be built, and not the profit that would have been gained. For instance, if the house was $180,000 and it only took $120,000 to build the house( i have no idea, just throwing numbers, I am not a buidler) then $120,000 is what the house should sell for right? I mean I dont know how they figure the numbers, but from what i am told, the banks just want the money they lended back, not the profit??? Could be wrong though....

[anifani821]

There may be mechanics' liens against the house - subcontractors who were never paid. It is not as simple as what is directly owed to a bank.

[trinitysmom]

I also live in a neighborhood where the builder is broke. Beckwith homes. Once the model is for sale, I guess they are pulling out!

[pink caddy]

Originally Posted by SamIam9206

Well that is horrible news, I was hoping to get a good steal. Although it doesnt make sense for them to do that because all the builder needed was the loan for the materials and labor, so basically the house should sell for whatever the house took to be built, and not the profit that would have been gained. For instance, if the house was $180,000 and it only took $120,000 to build the house( i have no idea, just throwing numbers, I am not a buidler) then $120,000 is what the house should sell for right? I mean I dont know how they figure the numbers, but from what i am told, the banks just want the money they lended back, not the profit??? Could be wrong though....

Suggestion: You might want to check out "squatters rights" in the State of NC. I'm not joking. This debacle might take so long that if you moved in now who knows..maybe you will own the house before it's resolved.

[Charlottean]

Good point John!

I think its a while though..20 years is what comes to mind for some reason.

[Damemeow]

Hi! I was a paralegal for developer. I'm not 100% sure, but most spec projects have liens and loans up the proverbial wazoo. Just like any homeowner, if the loan can't be paid back...the bank acquires the property. When its sold, the investors will usually get a prorated share of the proceeds.