Buying at Foreclosure
Couple buys foreclosed home in Del Mar Woods at 58.6 percent of builder's original price
by Dennis Rodkin
Stephen and Beth Brooks paid $621,000 less than what the builder had first asked for this new house near Bannockburn.
Planning their move from Charlotte, North Carolina, to Chicago, Stephen and Beth Brooks weren’t necessarily looking for a distressed property, but they did want new construction—which opened attractive possibilities. “Private owners who don’t have to sell can stay in their houses; they don’t have to cut the price,” says Stephen, who works in finance for Hewitt Associates in Lincolnshire. “So these [newly constructed builder] houses are priced lower.”
But as the Brookses can attest, buying one of those homes can be nerve-racking, given the complicated nature of the transaction. The couple spent months looking at houses, and at one point they had offers in on six different short-sale properties—places where sellers are offering a home for less than they owe on it—each one being scrutinized by builders and banks at a different pace.
They finally wound up with a house that had gone into foreclosure. The house was in Del Mar Woods, a sleepy six-square-block enclave of medium-sized houses on large lots in an unincorporated area adjacent to Bannockburn. A builder had taken down one of the old homes and put up a 15-room brick and limestone house with four bedrooms and five-plus baths in its 4,315 square feet of aboveground living space. (The basement had a wet bar and a sauna.) In 2006, the builder, who is not clearly identified in public records, had been asking $1.5 million for the house.
In October 2008, the title reverted to a Texas lending company, which priced the home at $849,900. After bidding against others to snap up the bargain, the Brookses paid $879,000 for the house in May—or 58.6 percent of the builder’s original price. “I feel like we got a fair deal for this house and this area,” Stephen Brooks says, “but I feel sorry for the builder’s economic misfortune.”
Photograph by Dennis Rodkin