how smart is it to buy a short sale lot from a builder and have a home built when he has many unsold lots?

Asked by Mhfurn, Sandy, OR Fri Sep 17, 2010

considering having home built on under 5000sq ft lot in Sandy approx 1500sq ft for apprx 189000 I am concerned about the lots being short and the future of this undeveloped neighborhood.

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6
Corri Klebaum, Mortgage Broker Or Lender, Clackamas, OR
Sat Sep 18, 2010
If the remaining lots are foreclosed on the only thing that changes is who'll be selling the lots the troubled Realtor vs the "troubled" bank.
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Lana Lavenba…, Agent, Grants Pass, OR
Sat Sep 18, 2010
My guess is that a bank may end up foreclosing on the lots and then you would buy them cheaper - and you could still have the same builder build you the home - selling it all to you for one price in the end. It depends on how long you want to wait. It could happen that the foreclosure takes another year and only goes down $1-5K in price or it could take place tomorrow - it is never an easy call to know what a bank or lender will do in a case of lots for sale. As you can tell from the beginning - I am only guessing - I have no crystal ball that can tell me what the future may hold...we are all working on a day to day basis....
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Sheffs247, Home Buyer, Troutdale, OR
Sat Sep 18, 2010
my mom asked this question for me and asked it wrong :)

my husband and I are looking to buy the lot from the subdivision owner who is also a realtor. And the lots are short. But we have a builder who is willing to build it out of his pocket and then we purchase it all in the end when the house is complete. So the builder, from what we have found out is in good financial standing. His main job is owning a roofing company. Its the realtor selling the lots that is having trouble. If he forecloses on the lots, what will most likely happen to them?
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Scott Godzyk, Agent, Manchester, NH
Sat Sep 18, 2010
I have not seen lots get approved as a short sale yet but i guess it could be done if the bank feels they would get more money from a short sale than foreclosing and selling at auction. You would want to make sure you are buying the lot at below what the current market valu eis to make sure you do not lose any value if prices to go down. I also would be cautious of having that builder build if he is having financial difficulty.

Please see my blog regarding short sales with some tips and advice
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Corri Klebaum, Mortgage Broker Or Lender, Clackamas, OR
Fri Sep 17, 2010
Chances are you will be looking and dirt and weeds for some time. I would not use the same builder for obvious reasons. Make sure you do your homework if you will be needing a construction loan they can be spendy.
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Craig Loughr…, , Oregon
Fri Sep 17, 2010
I would be too. If the builder is having financial troubles, what's the guarantee he's going to be able to finish your home? What happens to the money you've put down, if the builder doesn't complete the job? Is his bond big enough to cover your deposit, plus all the other deposits he's taken on other jobs? What if, before your deal is complete, the bank forecloses and takes the lot?
Web Reference:  http://www.bybryson.com
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