problem with builder... (sales, real estate, foreclosed)

[brownb01]

Hoping to get some direction here...

Signed a contract on a new house about 8 weeks ago. Our orginal close date was supposed to be 3 weeks ago. The builder couldn't get the house completed. We scheduled, and the builder missed again. Again, not being able to get the house completed.

The problem I have is, the builder is not working on the house, nor is he telling me. I had to find out we weren't closing from the mortgage company.

What are my options with the builder? I want the house, and really don't want to go find another one...however, I'm not against it either. I would prefer to work things out with the builder. He just isn't working on the house. Nothing is really getting done, other than a few small things about every two weeks. I have a feeling he's having $$ money issues, and isn't able to pay his subs.

If signed a contract with him, and he wasn't able to keep his end of the deal. What are my options legally?

Open to any other suggestions as well.

I've been very accomodating, and understanding up to this point. however, my patience is starting to wear thin, and I am sick of living out of boxes. (I was packed and ready to move on our orginal close date)

thanks for any help!

[Goodpasture]

Let me preface this by saying I used to be a builder. I am currently a real estate appraiser and have been for more than 25 years. I carry a Realtors membership and have a sales license....I last sold a house for someone 5 years ago.

My initial thought is the builder is about to go under. He apparently doesn't have the money to pay for the subs and crew to finish the house. Otherwise, with the closing coming near he would have focused on getting it done.

If you try to force anything on the builder, chances are he will bankrupt, the house will be foreclosed on, and you will be looking at another house.

What I would do and what you should do are probably a couple of different things. I would approach the builder and see what it would take to get it "as is" unfinished. If I could get him out from under his interim financing he might survive. Further I might be able to get a really good discount. If it was close enough to be within a few weeks of closing, it is probably substantially complete, so I could do the finish up work. If there is a major completion item such as a counter top, I could probably get the original sub to come finish it if I guaranteed payment. In fact, if he is a hands on builder, you might buy the house. get him out from under it, and hire him to finish it on a per item basis.

If the builder is upside down (which may very well be the case) where he has more invested in it than he can get out of it at close. you may have to deal with his bank. They REALLY don't want to own the house, particularly if it is unfinished. So you do have some leverage in negotiating both the interim financing and the purchase price.

On the other hand, if you are anxious to move now. Find a house that is move in ready, arrange to rent it until close, and move next week.

But, in my opinion, trying to get the builder to perform or filing suit for specific performance will probably put him into bankruptcy (or, if he already is there, will get your name added to the list). Pursuing options will probably cost you attorney fees and most likely will result in you getting no relief or compensation. Your attorney will like it, but you won't get a thing.