We've all heard it before. " Why do I need a Realtor to help me buy a home from a builder?" The common misconception is that the salesperson in the builder's office is going to treat you right, and in some cases this is right on the money. All to often however we see consumers being sucked in by a trick that is becoming common in our industry.
When shopping for a new construction home the buyer must keep in mind that the salesperson works for, and in the interest of, the builder. Many times a buyer will go in with a pretty good idea of what they can afford only to be up-sold by a savvy salesperson. Here's the scenario:
A buyer comes in looking for a home on a budget of $1200 per month. The buyer has a general idea of what size home they can get, say a 3 bedroom house with 1800 square feet, but the salesperson shows them how they can get them a 4 bedroom home with 2400 square feet with that budget. The buyer is assured that this includes the escrow of taxes and insurance. Sounds great!
Unfortunately the builder's salesperson did not explain that the current taxes are assessed on unimproved property! At the end of the year the buyer's mortgage company will pay the taxes on improvements. Here in Katy Texas that can mean an extra $300 - $400 per month on a mortgage payment. The buyer is contacted after the taxes are payed and is asked to make up the difference. For example, if taxes were $4200 ( not uncommon here ) then the buyer must add an additional $350 to their mortgage payment to make up the difference. AND since taxes are assessed at the end of the year the mortgage company will require an additional amount of $350 - $400 per month to pay next years taxes. In all the house payment goes up from $1200 to almost $2000 per month. Foreclosure here we come!
This is just one example of why a buyer needs a Realtor when shopping for a new construction home. Having a qualified Realtor watching out for you is the way to go!