Home Buying: Existing Home in an Unfinished Development

You finally found it!  Your dream home.  There are three bedrooms with the master on the main floor.  A huge bonus room and a fenced yard for the kids to play in.  The kitchen is bigger than you hoped for and it doesn’t need to be updated.  The house is in the perfect part of town for both school and work.  Best of all, it’s in a quiet neighborhood….because there are more empty lots than houses.  That is not necessarily a good thing.

Take the neighborhood below for example.  This subdivision was started during the boom in 2005 and 2006.  The original developer completed 12 homes before the bottom fell out of the market and they had to stop building.  Ultimately they lost the development to the bank.

If your dream home is one of the 12 houses in this development there are some things that your Bend, Oregon Realtor® should help you discover before you make an offer to buy.

Who owns the remaining lots now?  If the bank still owns the land you could be setting yourself up for a fall if you buy this house.  Sure the neighborhood is quiet and there is lots of room for the kids to play and ride their bikes but you don’t know who may end up buying the remaining lots and how they might develop them.

Not all developers are created equal.  If the lots are now owned by a developer, who is it?  Do they have a good reputation?  Do they build good, quality homes or do they just slap them together as fast as they can and move  on to the next development?

Will the new homes in this neighborhood help or hurt the value of the home you want to buy?  The home I described above is at least 2000 square feet and has a yard bigger than a postage stamp.  If the new developer is going to come in and build a bunch of single level homes that are 1400 square feet with zero lot lines the house in question could lose tens of thousands of dollars in value.

There are numerous neighborhoods just like this one throughout Bend and Redmond where the developer only managed to complete a few houses before going under.  Before you make an offer in a situation like this, make sure you have a Bend real estate agent who can answer these important questions.

About Dan Seim

Dan Seim is the primary contributor to Preferred Residential's blog. He has been writing about real estate issues that affect home owners in Bend and Central Oregon since 2011.