Steamboat Springs, CO Real Estate and Community Blog

Here in Steamboat Springs, CO, we are experiencing the biggest building boom in our town’s 100 year history. In fact, we have over 25 new construction projects in various phases all over town and the mountain area. Steamboat’s real estate market is very solid, and we don’t expect any problems from insolvent builders, but if you have put a reservation down or are considering purchasing in one of Steamboat Springs’ new projects or land developments, here are some things to be aware of if a builder gets into financial trouble:

• Buyers could lose their deposit
• Buyers could wait a year or longer past the promised occupancy date,
• Buyers could live without promised amenities like pools, landscaping, fitness centers and spas.

Red Flags to watch for:

• Vendors or subcontractors who were working on the project aren’t there any longer. Maybe they’ve been replaced by less experienced workers.
• Work seems to stop–especially if bad weather is imminent. Drive by the project frequently to make sure construction is still progressing.
• Unpaid vendors can put liens on properties–including the one you bought– so that you and the developers can’t re-finance, get a home equity loan, or sell it.

If a project stops, what can you expect?

Deposits will be held in escrow, but what if a project goes bankrupt? Federal bankruptcy laws give priority over certain other claims, but only protect homeowner deposits up to $2,225.

Most projects will be worked out or a new developer will purchase the project and finish the development as promised. So if you are buying into a new development, do your due diligence so you can enjoy your new place without getting involved in an insolvent situation.