REFLECTOR: OFF TOPIC: Buying Inventory House From Kimball Hill Homes

[Chuck Jensen]

Brian,

Don't take this as gospel or to the bank, but I have been around this block a few times, so I'll offer a couple ideas.  First, there should be an iron-clad Title Opinion on the property.  This should include back taxes, liens and encumbrances.  Second, you should make sure that you purchase Title Insurance on the property.  An attorney will have his name on the line for the Opinion and the Title Company will have there's on the line for the Insurance.  This is not a perfect guarantee against trouble, but if war breaks out, you won't be alone in the trenches.

You should also asked for a signed statement by Kimball that there are no liens, encumbrances, or prospective ones, against the property that they are aware of and that all subcontractors have been paid in full.  The statement should be from an "authorized" representative of Kimball and it should be notarized.  Normally, the builder might squawk about this, but they want to unload inventory so bad right now, they may be more accommodating than usual.

Wells Fargo is a solid, squared away company (for a mortgage company, anyhow) and should be an ally.  However, you can not legally rely on anything they say as they have no fiduciary duty to you...but they don't want to walk into a mess either, so they'll be cautious as well.

Finally, all of this stuff gets sticky and tricky under such circumstances.  I believe it is money well spent to hire a good real estate attorney to look over the deal.  He may not give it a clean bill of health, but at least he will be able to tell you where the potholes are, so that you can assess the risk and whether you are welling to accept them.  You may want to ask Kimball for them to pay for your attorney given the "inconvenience" they are putting you through.  No matter who pays the attorney, make it perfectly clear to the attorney he is working for YOU, and not Kimball, even if they are picking up the tab.

Just a couple ideas.

Chuck Jensen



-----Original Message-----
From: reflector-bounces at tvbf.org [mailto:reflector-bounces at tvbf.org]On
Behalf Of Brian Michalk
Sent: Sunday, April 27, 2008 2:52 PM
To: Velocity Aircraft Owners and Builders list
Subject: REFLECTOR: OFF TOPIC: Buying Inventory House From Kimball Hill
Homes


The reflector is the most diverse group of people I know, so I am asking 
for some help or directions to other resources.

Teresa and I were supposed to close on a house on Friday, and it got 
postponed to This coming Tuesday because Kimball Hill Homes is filing 
Chapter 11.

We are financing through Kimball's partner, Wells Fargo.  It's an 
inventory home, completely finished.

I am worried about the 10 year foundation warranty, and three year 
appliance warranty.  I am also worried about contractor liens being 
placed on the house.

At this time, I am inclined to bring a lawyer to the closing.

Thoughts?  Please email me off the reflector.