What happens to a deposit given to a builder for new construction if the buyer goes out of business?

Asked by Cathy Goodman, KC, KS Wed Jul 30, 2008

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Bruce Lynn’s answer
Bruce Lynn, Agent, Coppell, TX
Wed Jul 30, 2008
I'd be surprised if you get your money back. You'd likely be an unsecured creditor in the back of the line in the bankruptcy court. I'd do my best these days to put any deposit in escrow with a title company and ask for an upgrade costs to be included in the purchase price.
Web Reference:  http://www.teamlynn.com
1 vote
Jeff Kessler, Agent, Austin, TX
Wed Jul 30, 2008
The builder I was working for did give back the deposits. I would agree that if they don't I would take with a Real Estate Attorney.
0 votes
James Gordon…, Agent, Hamilton, OH
Wed Jul 30, 2008
I am not an attorney and you would need one for this -- but in the past -- in this area -- the way most builders contracts are written. You would join the unsecured creditors in any action.

Just what I have seen as what normally happens in this area please contact an attorney to protect your interests.
Web Reference:  http://www.find1home.com
0 votes
Cathy Goodman, Home Buyer, KC, KS
Wed Jul 30, 2008
Of course I meant if the builder goes out of business!
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