How to lose $40,000 on Orlando New Construction

By
Real Estate Broker/Owner with Buyers Broker of Florida
http://actvra.in/4xr2

It is easy to lose money on Orlando New Construction. 

Here are some grand ideas:

  • Go alone. What do you need an agent for?
  • Rely on yourself.  You don't need an expert opinion.
  • Trust the builders sales person, they smile so nicely.
  • Don't hire your own Buyer agent. You are smart enough.

It's just that easy to lose money on Orlando New Construction when you don't have your own agent.

Think I am kidding?  Just watch this video about how a local Orlando Homebuyer lost $40,000 when he bought a Orlando new construction home without an agent. Learn from his costly mistake.

This aired yesterday, so play the video and READ THE DETAILS.   This buyer purchased a new construction home through a national builder.  He lost $40,000 because he did not understand the contract that he signed.

 

How does that happpen?

Easy. Many homebuyers become blinded by the beauty of the brand new homes luxury upgrades found in the model homes.  Even the onsite builders person is so personable and nice!  The buyers get excited and become too friendly with the builders sales person. They forget that there are business details behind this highly emotional purchase.  

This is why you need your own buyers agent.  A good buyers agent will keep you grounded and aware of all the nuances.  After all, nothing is as perfect as it seems...there is also the small print in the contract that is written only to protect the builder, not you the home buyer.

 

The builders sales person is not your ally

The sales person at the new construction works for the builder, not you the buyer.  They will smile and answer your questions about the process.  However they will not mention any negatives about the home, location or community.  They will not tell you about the caveats in the contract, the timelines to stay compliant or the fact that there is no appraisal contingency.  You are for sure on your own.

 

Think that you can decipher the builders 30 page contract?  I bet not. Most homebuyers do not understand even a fraction of what they will be required to sign. Yes, that is one of the big reasons that you need to bring a good buyers agent with you.

 

A good buyers agent is priceless...

good buyers agent will read the contract! Before my buyer goes to contract on Orlando New Construction, I request a copy of the builders contract to review.  We highlight any "buyer beware" issues and make sure the buyer understands the terms.  Believe it or not, most sales people that work for the builder do not understand their own contract. Not to mention, they are not allowed to even try to explain it.

 

Not long ago I requested such a contact from the builders rep.  He was not thrilled, so he sent me 92 pages of contracts and addendums the night before, most of which were not relevant to that community. Yes, I read and understood all.

The next morning, I disputed what the builders salesperson stated which was different  from what the contract really said. I received an addtional $16,000 in builder concessions for my buyer client. I also requested a reimbursement for the buyers hotel stay which was advertised on their website. That was several hundred dollars back to the buyers pocket. Builder Concessions are not unusual if you know what to ask for.

 

More services a good Buyer Agents will do:

1.  Watch your timelines so that you do not jeapordize breeching the contract and losing your deposit...just like in the video.

2. Give you the negatives (and positives) both about the property and terms of the contract.

3. Attend meetings and inspections on your behalf.  Most of our buyers are from out of town and cannot attend, so we go to make sure that everything goes smoothly and there are no surprises. 

4. Issues do come up in the transaction, that the buyers do not know how to deal with or are not comfortable in confronting the problem. Every home buyer needs an savvy agent that is willing to actively mitigate any conflict. We are experienced.

5. Save you money.  There are times when the builders are negotiable and a good buyers agent can seize those opportunities by knowing what to negotiate. Some home buyers mistakenly think that if they come in without an agent, the price will be reduced.  Not a chance! More than likely, the buyer will spend more than they need to.

6. In addition, a buyers agent will help with financing, title, insurance, and where to place your deposit.  Will you put it in an escrow account or will you put it in the builders pocket for their use? Ask us what is best.

7.  Last but not least, all builders will pay the buyers agent if you include them.  Builders will  not discount your price one penny if you come alone. They simply don't.

Smart home buyers always hire their own agent. What the media says about buyers agents. Talk with an Expert Buyers Agent at Buyers Broker of Florida.  Do not be one of those buyers that call our office for help after they signed a contract and are now stuck.  Our consultation is free. 407-539-1053

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Representing ONLY the best interest of the Home Buyer...never the seller.

 Eve Alexander Orlando Buyers Agent

 

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Christine Smith 02/01/2015 09:00 PM
  2. Anna Banana Kruchten CRS,CRB 03/20/2017 02:52 PM
Topic:
Home Buying
Location:
Florida Orange County Orlando
Groups:
Exclusive Buyer's Agents (EBAs)
Posts to Localism
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Luxury Real Estate
LuxuryRealEstate.com Network For ActiveRain Members
Tags:
new construction orlando
orlando new construction
orlando new construction homes
orlando new homes buyers
buyer beware orlando new construction
how to buy new construction orlando

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Rainmaker
779,274
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

It is important to have someone to review the contract. Whether it is a lawyer or broker or a third party.  Most people do not understand the contact well to often misunderstand the contract.

S.

Mar 20, 2017 03:55 PM #21
Rainmaker
1,411,713
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

People should understand builder rep works FOR BUILDER and upgrades are offered at RETAIL and buyer's agent is FREE!

Mar 20, 2017 04:02 PM #22
Ambassador
3,337,244
Jeff Dowler
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude - Carlsbad

I missed this the first time around, unforunately, and the video is not avaialbe. But there is plenty of important information for any buyer considering a new build regarding the value a qualified buyer agent will bring!

Mar 20, 2017 04:20 PM #23
Rainmaker
454,905
Mike & Eve Alexander
Buyers Broker of Florida - Orlando, FL
Exclusively Representing ONLY Orlando Home Buyers

Jeff Dowler , Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC 

It was Lennar...or course they made the video disappear.

Eve

Mar 20, 2017 04:55 PM #24
Rainmaker
3,176,986
Dorie Dillard
Coldwell Banker United Realtors® ~ 512.346.1799 - Austin, TX
Serving Buyers & Sellers in NW Austin Real Estate

Good evening Mike & Eve Alexander ,

Excellent post..congratulations on the well deserved featured post! What a powerful news clip!

Mar 20, 2017 04:59 PM #25
Rainmaker
381,531
JoAnn Moore
The Mortgage Market of Delaware - Georgetown, DE
Home Loans in Delaware

You have brought up a very important subject. This type of thing is going on everywhere, everyday. Glad you are watching out for your clients. 

Mar 20, 2017 06:20 PM #26
Rainmaker
384,211
Pat Starnes, Brandon, MS
Front Gate Real Estate - Brandon, MS
Broker Associate, ABR, 601-278-4513

Perfectly stated. Too bad the video vanished, but you are 100% correct. A buyer's representative will SAVE the buyer money as we know what incentives to include and how to decipher and structure the contract.

Mar 20, 2017 07:52 PM #27
Rainmaker
1,393,697
Sandy Padula and Norm Padula, JD, GRI NMLS#1483386
Realty One Group - Carlsbad, CA
Presence, Persistence & Perseverance

I must agree 200% with your advice here. I worked for a national builder with a name that starts with L and they were unscrupulous with 100+ page contracts and add-on fees. Needless to say, I did not stay long with them; a very unpleasant experience.

Mar 21, 2017 05:42 AM #28
Rainmaker
534,791
Richard Bazinet /MBA, CRS, ABR
AZuRE Team - Realty ONE Group - Scottsdale, AZ
Phoenix Scottsdale Real Estate

Good recipe about how to lose money Mike and Eve. And great suggestions on 'what-to-do' not to lose it. I've explained that many times to as many people as I could.

Mar 21, 2017 06:26 AM #29
Rainmaker
2,708,090
Sheila Anderson
Referral Group Incorporated - East Brunswick, NJ
The Real Estate Whisperer Who Listens 732-715-1133

Good morning Mike and Eve. This is so sad but very very true. Some people just think they know better. Too bad.

Mar 21, 2017 07:01 AM #30
Rainmaker
566,335
Nick & Trudy Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtors, Philly Main Line

Excellent post and why every buyer should have their own agent representing them.

Mar 21, 2017 07:34 AM #31
Rainer
358,206
April Swenson
Coldwell Banker Ocean Shores Brokers - Ocean Shores, WA
CRS and Managing Broker - Ocean Shores Real Estate

Your blog title intrigued me, so I had to read what happened. Wow! Yes, a proven example that good real estate agents are needed.

Mar 21, 2017 08:17 AM #32
Rainmaker
2,424,276
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale - Probate Broker

Lennar is one of the more shaddy and underhanded builders.  One of their newest "tricks" is to provide solar panels.  They market that solar is included in the sale.  The hidden agenda is that it comes with a 20 year lease ... at an additional cost.  The sales people don't tell buyers that.  They find out later in the game.  People need a buyers agent ... but not just any buyers agent ... one that will read the documents and truly represent their clients. So glad to see this FEATURED! 

Mar 21, 2017 09:37 AM #33
Rainmaker
3,913,730
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Good afternoon, Mike & Eve Alexander (Eve).... I have always been a listing agent and my niche was new construction.... if a buyer came on-site without a buyer's agent by his/her side, I assure you, there was no negotiating if the buyer wanted to reserve a lot and/or buy a spec home....my job as the builder's listing agent was to sell extras, and I sold them... even if I knew there would be NO resale value for them in the future... we rarely had any issues with the builder I represented, but if there were, the builder won!!! always.... 

and the buyers who did not want a buyer's agent knew in writing and verbally that I represented the builder....they thought it was to their advantage to just go through me....they paid top dollar and bought items that had no resale value but large profit margin for the builder....

Buyers, have a well-versed buyer's agent by your side with any purchase, especially new construction....and the buyer's agent of choice in the Orlando Florida area would be Mike and Eve Alexander..... they guide well.

Mar 21, 2017 10:08 AM #34
Rainmaker
253,929
Jeanne Gregory
RE/MAX Southwest - Sugar Land, TX
The most important home I sell is YOURS!

The last new home contract I was involved with was 73 pages.  Good lord.  At least 20 of the pages said the same things in a different way (yes, I will occupy the house, no I won't go to the site without a hard hat, etc) .  The other 53 needed to be read and parts of them questioned.  But as one potential buyer lead told me last week in an email "I fail to see the value of an agent". 

Mar 21, 2017 05:14 PM #35
Rainmaker
613,797
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Very good advice, the misconception that buying a new home will have less issues to deal with can definitely backfire.  Having an agent that knows how to navigate that type of purchase is a wise decision.

Mar 22, 2017 07:21 AM #36
Rainmaker
282,122
John Wiley
Jones & Co. Realty - Fort Myers, FL
Lee County, FL Real Estate GRI, SRES,GREEN,PSA

I like new construction and with lower re sale inventory it is a great opportunity to help people find the home that meets their needs.

Buyers often think they will get a home for less by not having a Buyer's Agent.

Builders contracts are loaded on the Builders side. The in house agent is looking out for the Builder.

Buyers should take heed of this message. You NEED an agent to represent you and make sure you are not taken down the primrose path.

Mar 22, 2017 10:41 AM #37
Rainmaker
405,814
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Specializing in Brookside, Waldo, Prairie Village

Wow, quite the story. I really don't like working with the new construction--to the buyer it sounds so wonderful and romantic but in reality--home is never finished on time, many builders do cheap work and -- do not have the buyer's interest in mind.

Mar 22, 2017 02:36 PM #38
Rainmaker
277,990
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

I have closed brand new homes with 62 different builders in the Boise area.  Each of them does things a little bit different.  Selling new construction is a totally different approach and many agents are clueless.  Most buyer's that I know that tried to save money going direct to an onsite builder rep paid more than they should have and got less (or no) represenation for it!

Mar 22, 2017 07:17 PM #39
Rainmaker
795,405
Marco Giancola
Beachfront Realty - Miami Beach, FL
Realtor (305)608-1922, Miami Beach Florida

Very good post and information to all new construction home buyers!

Oct 08, 2017 05:22 AM #40
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