Arizona Builder, Brown Family Communities, Goes Out of Business Leaving Buyers Wondering

builders-in-azI was shocked when I heard the news this morning that Brown Family Communities (BFC) had gone out of business effective last Friday.  It was especially concerning since I am currently representing an out of state buyer who is just a couple weeks away from closing on a BFC home being built in their Whispering Heights community in Chandler.  So, now what?  How do I break that to my buyer and what’s going to happen to their thousands of dollars in earnest money?

I received a call from a representative from BFC this morning explaining that BFC is not filing for bankruptcy, however, 2 of the 3 banks that financed the projects for BFC decided to exercise their option to call their loans after recent appraisals of the projects showed their value was less than what was owed.  Mr. Brown has been paying commissions and closing costs out of his own pocket over the last 6 months as the banks took all of the capital from closings during that time. 

According to the BFC Rep, all of the buyer’s earnest monies have been returned or at least the “checks are in the mail” and he was calling to confirm whether or not my buyer wanted to move forward with the purchase of their home which was set to close in just a few weeks.  I was told that most buyers (98%) are opting to move forward with their purchase.  The construction information regarding what stage of construction each home is in, how much it’s going go cost to finance the project and whether the buyer wanted to go forward with the purchase was going to be sent to the bank that was funding that particular community.  The banks are meeting with BFC today and tomorrow and may be utilizing the help of BFC to finish the projects by serving as an intermediary with the buyers or, the banks will take over completely and contact the buyers themselves to renegotiate their purchase contracts.  BFC has retained 4 of their building superintendents and a skeleton staff to help complete the project if the banks opt to go that route.

It’s sad to see another builder go under.  Especially a local builder who has been around for a long time.  My only question is why didn’t the community know there was a problem?  I was at the Whispering Heights community 2 weeks ago with another buyer and now wonder why was there a big sign in the sales office that asked “Do you know who your builder is?” and boasted that unlike other builders, Brown Family Communities was solid and not experiencing any financial difficulties. 

Ummm…  apparently not.

Comments

  1. One of many lies told by BFC

  2. Anonymous says:

    Many repairs still pending on my home, and NOW NO ONE is returing my calls…

  3. Louis says:

    Sad to see. Good luck to all former employees and those who have purchased their homes.

  4. It is very sad. I stopped by Whispering Heights today to take photos of my buyer’s uncompleted home to email to them. Hopefully the lenders and Brown will get it all worked out to benefit the buyers of these homes…including who is going to handle the repairs & warranties after closing.