Irking the Neighbors

I can certainly understand how my client thought that the developer had had a change of heart.

More than two months after they sold their home to the builder this Spring, the new owner was nowhere to be found.

overgrownMeanwhile, the neglected property was becoming increasingly derelict (overgrown lawn, broken window, missing gutter extensions, etc.).

Then, overnight, a new “For Sale” sign appeared in the front yard.

Was the developer throwing in the towel?

Then & Now

Five years ago, when the housing market (and lots of would-be real estate moguls) rolled over, you might have thought so.

Today, however, the new “For Sale” sign is a tip-off that the to-be-built home is now being marketed on MLS — usually with computer-generated photos of the finished product.

Why sell something that doesn’t exist yet?

Two reasons:  1) it’s less risky to identify the Buyer early in the process, and customize the home’s features and finishes to their taste (and budget); and 2) it’s always better to be paid earlier vs. later.

Time Lag

While it’s not common for builders to neglect a home they’ve purchased, it is typical for there to be a time lag in between closing and the commencement of construction.

The explanation?

It can take weeks (or months) to obtain the necessary building permits.

Of course, if the existing home is to be torn down, it doesn’t really matter if its condition (further) deteriorates — much as that may irk the neighbors (note:  if the new owner is truly neglectful, they risk getting hit with a slew of city fines for ordinance violations).

See also, “The Case of the AWOL New Owner.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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