Here is an article by June Fletcher of the Wall Street Journal asking the question “Can Home Builder Be Trusted”? Here are some interesting excerpt from the article.

A builder will often promise to repair and repaint a model at the end of the lease, to convert the sales office to a garage and to re-route sidewalks and fences running through the model-home complex. If you’re worried that the builder will go belly-up before all this happens, get an estimate from an independent contractor of what it could cost to perform these necessary fixes. Have the builder deposit the funds to cover them in an escrow account. It’s smart to hire an experienced real estate attorney to represent you during all these discussions.

Q: I keep seeing model lease-back offers from builders. Most of them pay enough rent to more than cover the monthly cost, but my biggest concern is about the builder’s financial viability, since so many of them have gone bankrupt. Are there any particular things one should watch out for?

A: Builder lease-backs, in which the buyer rents a home to the builder who uses it as a model home, are generally great deals for all concerned. Builders get an early sale. Buyers get an upgraded home at a discount price, and a tenant who won’t be calling in the middle of the night to complain about a clogged toilet.

Source: Wall Street Journal

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