Real Estate Investment Articles

CHECK OUT HOME BUILDER BEFORE BUYING

By Bob Bruss

October 11, 2007

Editor's note: Robert Bruss passed away on Sept. 26, 2007. This was one of the last real estate columns he wrote. Inman News is publishing Bob's last work as a final salute to the nation's most well-known real estate writer.

DEAR BOB: My husband and I, longtime homeowners with significant equity in our home, are considering buying a new house in a new subdivision. In the course of my research, I noticed one of the subdivision's builders does not belong to the state's builder association, nor does he have a Web site. But the subdivision appears to be continuing to make sales. Is this as big a red flag as I think? --Patricia J.

DEAR PATRICIA: Let's put it this way. It is not a plus factor if that builder doesn't belong to the local home builder's association. Many builders, especially small ones, don't have Web sites so that really isn't important.

However, it is very important to check on that builder's license status to see if he has an active license and if he has had any complaints filed with the state regulators.

Visit some of his previous subdivisions built within the last few years to see how they turned out. Knock on a few doors to ask the homeowners about the construction quality and if they have any unresolved complaints with their builder.

In the current buyer's market, if that builder goes bankrupt and you are one of the few buyers in his new subdivision, it could be many years before the vacant lots are filled in with new homes. You can't be too careful when buying in a new subdivision, especially in the present market situation.

The new Robert Bruss special report, "17 No-Down-Payment Formulas for Use in a Home Buyer's Market," is now available for $5 from Robert Bruss, 251 Park Road, Burlingame, Calif., 94010, or by credit card at 1-800-736-1736 or instant Internet delivery at www.BobBruss.com. Questions for this column are welcome at either address.

(For more information on Bob Bruss publications, visit his Real Estate Center).