What happens when a NEW subdivision goes BANKRUPT (foreclosed, sale, prices)

[missnew2nc]

I live in a new subdivision and I have noticed that construction has STOPPED. I have houses on either side of me that have plywood siding and nothing else.

I looked up one day and all of the construction workers were GONE. Talking to one of my neighbors I discover that the builder/devolper went bankrupt. What happens now to my subdivision or better yet what happens to the unfinished houses on either side of me?

[Silverfall]

That has happened out here and either the bankruptcy will order the liquidation of the property, or it will be foreclosed on and the bank will try and sell it.

It depends on the type of bankruptcy.

[missnew2nc]

Being that the builder had a "construction" loan to finance the homes will they be sold at rock bottom prices?

Especially the homes with only plywood up.

If so I would like to buy the home next to mines and move my parents into the home.

[GregTraub]

In all likelyhood the remaining lots and unfinished homes will be sold to another developer (at rock bottom prices) that will finish and sell the home. It is very unlikely the unfinished home next to you will be available for the general public (you) to purchase.

I would be worried about increasing HOA dues if your community has them, especially if there are significant community amenities to maintain.

[missnew2nc]

My home was 270k. If you had to guess a rock bottom price the builder would buy it for what would it be?

[GregTraub]

Unfortunately, I wouldn't have the first clue as to what a partially finished house in NC would go for in a liquidation sale.

[LaceyEx]

We went thru this in the early 70's in NJ. Partially finished homes were just boarded up and left. It stayed that way for years until all court proceedings were settled. Basically ruined the development for years.

[NatasNJ]

One positive note is you won't have to worry about annoying neighbors anytime soon.
But the part was always out of control weeds and such that annoyed me about vacant/foreclosed homes next door.

But my guess is based on just a foreclosure near me in the past. It will be AWHILE before anything changes...

[Silverfall]

Actually we have some unfinished homes on our market right now open to the general public. There aren't any developers to buy them...

Find out who has the construction loan out on the property. It won't be for sale until the BK court releases it, which could be a couple of months.

[chet everett]

Originally Posted by LaceyEx

We went thru this in the early 70's in NJ. Partially finished homes were just boarded up and left. It stayed that way for years until all court proceedings were settled. Basically ruined the development for years.

Even in areas where towns require surety bonds from the developers to finish roads, sidewalks, sewers / drainage the court proceedings often get drawn out. Very hard to sell a home in a subdivision with vacant / unfinished homes.

Be very cautious about getting into such a situation!