I rarely read the comments at Ben’s blog, but did so on the one about the nationwise bubble, since that topic interests me greatly. Is it happening also in CA, that the new home builders ask the buyer to sign a document, which is attached to the property via title reports, to prevent them from selling the house within 2 years?
One person wrote
Somewhat OT, but I just finished a long conversation with an agent from a large national homebuilder at a model home in the Tampa, FL area. He then started telling me about how he knew so many of those people were lying about the homes being for themselves and not for investment (I’m buying it for my brother, etc.). They have to own the home for 2 years before they sell it. He said he knows for certain that many of them are trying and will try to sell the house this year in violation of the agreement. I asked how do they enforce this policy and he said they don’t have to. They “clouded” the title so that when they try to sell they will not be legally able to! I had not seen that term on this board so forgive me if it is common knowledge, but there goes another class of folks who may get really screwed! I knew about the agreements but figured it wouldn’t be enforced. He said he is certain that many of them didn’t know this, after all, who reads the contracts. He also agreed that there was no way a lot of the buyers could afford the houses in the long run.
Another reader wrote:
You can have a straight-up agreement recorded that gives any profits from a future sale (during the covered period) to the builder, or allows the builder to buy the house back if such a sale is even attempted. Here’s one in AZ:
http://tinyurl.com/oojhh
(The URL is to someone’s personal Memorandum of Agreement, from Pulte Homes, stating they cannot sell within 2 years, and the consequences if they do)
BTW, if anyone wonders why I am spending this beautiful day indoors writing about the housing bubble, it’s because I have a running injury and can’t move. I am tied to my bed.
.
