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So Was it Really a Bargain? | Hard Lessons For Atlanta Home Buyers!

By
Real Estate Agent with Long & Foster 0225078705

 There are many Atlanta home buyers that buy a home in Atlanta without a buyer's agent or real estate agent that represents their interests.  The buyers make a fatal mistake of going directly to the builder and buy directly from them.  This is incrediby naive of them. And it is like having unprotected sex with a stranger! Not smart at all!  The listing agent can only represent their principle the seller!  The Atlanta home buyer's mistake?  They thought that by going directly to the builder they could shave off the commission because they purchased without a buyers agent.  That is mistake #1. 

 Another mistake is that the the builder developer will give the buyer if they close with their preferred lender: furniture up to 15K, closing costs up to $7500, a decorator allowance, a free exotic trip, and up to 100K off!  Wow!  How could a buyer pass this up?  Who needs an agent?  Just think, that if you could get all of the above without negotiating...what is wrong with the picture?  Mistake #2.

 The friendly Atlanta new homes agent asks you as the buyer that if you returned to purchase the home without your agent, they can give you a much better deal.  Please keep in mind that after all they have to pay a big commission to them.  If you buy an Atlanta new home without an agent, you could really get a sweet deal! Mistake #3.

 If you buy our home, not only can we get you a great deal, but at the closing, we could give you cash back!  That's Mistake # 4 (it is Illegal you could go to jail!)

 The same friendly Atlanta new homes agent, asks you "Why are you wasting your money by doing a home inspection and paying all that money to a mediocre home inspector?"  The builder is a really great guy, he's a Christian and can be trusted!  And after all, this is a new home, and you are under a builders warranty!  Mistake # 5 is often Fatal!

Wow, I could write a book on this!  The truth is you are a sucker for buying a home without an experienced advocate representing your needs only!  There is no free lunch!  In spite of all the concessions the builder made for you, the home may just be a total loser and is still way overpriced!  What happens if the builder goes bankrupt?  What happens to your builder's warranty then?  What happens when you find out the builders lender changes the loan agreement at the closing table and you pay a substantially higher interest rate?  What happens when the subdivision goes into bankruptcy and you find out the hard way there is no pool or tennis nd there never will be, or that the builder is going to undercut your 250K home price and finish the rest of the subdivision with homes that are a $100K less in the 150's?  I can tell you what will happen.  You have just made thee most expensive mistake in your life that will take a decade to make right!  Caveat Emptor.  Let the "Buyer Beware!"

There are loads of foreclosures in today's market and the untold story is that many of them were sold to persons that could not afford to buy them.  When the mortgage readjusts your monthly payment beyond your reach... a buyer agent may have assisted you in using other lenders and having them explain costs, and payments to you.  There are many new homes subdivisions where the majority of homeowners are in foreclosure.  A good Atlanta buyers agent may advise you not to buy a home from a particular subdivision, or may show you that there are much better bargains in resale homes. They may even have advised you, not to buy a home.

Don't make a costly mistake buying a home in Atlanta.  Before you buy,  buy with a Atlanta buyers agent that represents you alone.

Jim Crawford

 

 

 

 

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Posted by

James Crawford Broker Associate

Long & Foster Fredericksburg Virginia

678-595-5286 Direct

 

Fredericksburg VA Real Estate Agents, Spotsylvania County Homes for Sale, Spotsylvania County VA Homes, Stafford County VA Homes, and City of Fredericksburg VA – Luxury Homes, Lots, Land, and New Home Construction. Buying or Selling Call Me!  

 

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Comments (18)

Kay Van Kampen
RE/MAX Broker, RE/MAX - Springfield, MO
Realtor®, Springfield Mo Real Estate
Jim, sounds like the same Springfield Mo builder that decided to save himself a commission by intercepting all the buyers that drove by my sign in the yard and held every open house so he could capture my clients.  I'm still closing next week on it, but not after great discussions with him.
Nov 15, 2007 11:15 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA
Kay Van Kampen Springfield Missouri Real Estate  Almost all of the scenarios in this Blog are in the news in the south!  One subdivision in the Carolinas has over 75 homes in foreclosure after the builder offered bu this home with $1 down!  Another story ran tonight about builders undercutting the more expensive homes with cheap models!  It goes on and on!
Nov 15, 2007 11:25 AM
Jessica Horton Jessica Horton Realty
Jessica Horton - Jessica Horton & Associates - Griffin, GA
Jessica Horton: I'm not #1... You Are!
Jim very wise words.  Builders are getting very, very desperate.  You need a good negotiator in your corner at all times....esp when dealing with desperate people IMO.
Nov 15, 2007 12:19 PM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA
Griffin Georgia Real Estate - Jessica Horton  I agree, and you need someone that can objectively tell you it is a loser!  Here is another scenario  You buy a 400K new construction home for 349K.  The builder stops building.  He goes bankrupt.  They sell off the development in foreclosure several years later... a new builder comes in and builds 200K homes and fills in the neighborhood.  You should not have bought there, and if you just had to have the home...you should not have paid the builder more than 225K.  New new homes are undercutting the price of your home,and capping the appreciation.  It is a nightmare, and yet happens every day.
Nov 15, 2007 01:14 PM
Kelly Sibilsky
Licensed Through Referral Connection, LTD. - Lake Zurich, IL
I'm applauding you! ::clap, clap::
Nov 16, 2007 01:19 AM
Herb Hamilton
RE/MAX Preferred Inc. Realtors - Portland, OR
Real Estate Broker ,CDPE, Downtown Portland

It is truly sad that Builders are being foreclosed on. However the reality is that many Builders get caught with large amounts of inventory when they do not pay attention to th market. Nothing goes up forever. The signs are usually apparent but often greed blocks your view.

In regards to unrepresented Buyer's and Seller's for that matter. In the 19 years that I have been selling real estate one fact remains constant. The worst stories bar none come from unrepresented individuals attempting to work with in a medium that requires more than just desire.

Nov 16, 2007 01:39 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA
Kelly Sibilsky ~ Lake Zurich  Thanks!  Buyers that buy without representation get what they deserve.  A lot of stories on the evening news about housing nightmares...I would bet money that they purchased without buyers representation!  Thanks Kelley
Nov 16, 2007 02:02 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA

Downtown Portland Real Estate Broker~Herb Hamilton  Wow isn't that so true?  "The worst stories bar none come from unrepresented individuals attempting to work with in a medium that requires more than just desire."  I feel you have a great insight!

Nov 16, 2007 02:05 AM
Chad Baird
Re/Max Spirit - Dayton, OH
Great post!  I liked when you said "The buyers make a fatal mistake of going directly to the builder and buy directly from them.  This is incrediby naive of them. And it is like having unprotected sex with a stranger!"  SOOOO true, never heard it put that way. 
Nov 16, 2007 04:28 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA
Chad Baird  Thanks!   LOL!  It's true!  If you stay in real estate for a number of years, when listing a home...the ones that never had an inspector or buyers agents representing them have all the code violations!  How do I know?  I ask the sellers when we get a terrible inspection report!
Nov 16, 2007 06:25 AM
Retta Absher
RE/MAX Space Center - Pearland, TX
Pearland Texas Real Estate
Thanks for the post,  It's all around us, and the sad part is for the family that thought they were saving on fees and feel now they have no where to turn. When will agents be appreciated for their knowledge and appreciated for the services we can offer them?
Nov 16, 2007 06:56 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA
Retta Absher  I would like to look the other way, but somewhere... some in our industry have added to this.  Some have rebated back the commission to the buyers. So if we don't need the money, why not claim it all?   As a professional....would those same agents advise their clients, do not buy this home it is not a good buy, or it is cheap shoddy construction?
Nov 16, 2007 08:48 AM
Ann Heitland
Retired from RE/MAX Peak Properties - Flagstaff, AZ
Retired from Flagstaff Real Estate Sales
There is so much bad stuff going around. This is a good list of some of it.
Nov 18, 2007 10:29 AM
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate
Jim, this is so true, we try to educate our clients on these very issues. Some Most listen. Every home needs an inspection. I've worked for builders representing them on their specs and we always find overlooked items, like a nicked plumbing pipe in the laundry room, which could have caused a disaster if not found before they moved in.
Nov 18, 2007 09:36 PM
Keith Perry
Coldwell Banker - Hiram, GA
REALTOR - West Metro Atlanta
Jim, great post on a topic that has been mostly hidden to the public. One of my clients this fall had a punch list on a new home that was forty seven items long. Some where major problems.
Nov 18, 2007 10:35 PM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA

Keith & Robin Perry - REALTOR® -West Metro Atlanta  Thanks!  I went into a new home subdivision that has been sitting for a long time in Atlanta.  I like the product but there are several areas of concern.

  1. The builder has stopped all building so only 1/2 of the subdivision is finished.
  2. THe on site agent has most of the homes locked so you cannot preview them without asking him to open doors.
  3. In spite of major price drops the price is still very high
  4. They have $25000 buyer bonuses and still are not selling
  5. 5% Buyer agent commissions

The on site agent is very upbeat that sales are strong, and almost sings every response back to you.  (I had not identified myself as an agent because I am looking to see what is out there for my own needs!)  So when he mentioned you better hurry things are realy hot, I asked then why to you have this big sign up for 5% to buyers agent?  He almost lost it.  However, reality shows a different story! 

When I went back to the MLS to check the stats, only 2 had sold over the last few years, I assume the others that are occupied were rented, there was one pending sales, and there were loads of expired and withdrawns.

Nov 19, 2007 12:30 AM
Mike and Dawn Lewis
The Lewis Team at Keller Williams - San Diego, CA
The Lewis Team at Keller Williams in San Diego CA

Jim,

Great post. A buyers agent needs to advise a client of their best options at the time they are considering a purchase. Not buying is sometimes a very good option. Excellent point!

Mike Lewis

Nov 23, 2007 04:44 AM
Jim Crawford
Long & Foster - Fredericksburg, VA
Jim Crawford Broker Associate Fredericksburg VA
Mike Lewis  Thanks Mike!  I agree!  It is the interest of the buyers that comes first, not necessarily a sale!
Nov 23, 2007 07:08 AM