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Attn New Home Buyers!! Please Call Me BEFORE You Visit New Home Builders, Not After!! Things The Builder's Sales Person Won't Tell You!!

Reblogger Deborah "Dee Dee" Garvin

Mortgage and Lending with C2 Financial NMLS #279125

March 21, 2012 02:18 AM

This is VERY important information that all potential home buyers should know. I believe that are three absolute MUSTS for every consumer who is shopping for new home construction:

1). Have your own buyer representation. As Lenn states, this is absolutely essential.

2). Hire you own home inspector. Do not rely on the builder to do every correctly and do not rely solely on the building inspector to catch all inefficencies. Protect yourself by having a licensed home inspection on YOUR team. The costs will likely be the best dollars you will spend in the the purchase transaction.

3). Get financing advice from someone other than the builders in house mortgage company. The builder has a vested interest in keeping the financing in house. Some of the rationale is control of the process (I understand why a builder wants the control); however, most of the time it is also good old fashioned greed. The builder likely has a financial benefit agreement with the in house lender.

Many builders are very agressive about steering borrowers to the in house lender...some go as far as stating the buyers must all use their lender. No one can coerce a home buyer into working with a specific lender. The incentives offered from the builder may, or may not, be to your advantage. Get a second, or third, opinion before going forward with the in house lender.

Attn: New Home Buyers!! Please Call Me BEFORE You Visit New Home Builders, Not After!!

Things The Builder's Sales Person Won't Tell You!! The most important thing that the on-site sales representative at the new home model or sales sales office is:

"Broker must accompany & register customer's on first visit."
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We agents and brokers are well aware of this practice and for the new agent who isn't, it's valuable information.

However, if you're a home buyer, THIS IS IMPORTANT. Once you visit that new home sales office and REGISTER YOURSELF, that builder is in total control of your transaction. YOU WILL PROBABLY NOT BE ABLE TO LATER BRING IN A BUYER'S AGENT TO REPRESENT, ADVISE, HELP YOU WITH THIS TRANSACTION.

Prospective home buyers are not aware of this builder practice. HOW ARE THEY SUPPOSED TO KNOW??? YOU ARE NOT SUPPOSED TO KNOW. That is why this builder practice is NOT disclosed in their advertising.

I received a phone call yesterday and one today from home buyers interested in new home communities in my market area. They each had questions about financing, taxes, schools, value, etc. about the new home models they had toured over the weekend.

I'm happy to help new home buyers with information. It's a big part of my business. HOWEVER, once you have visited that builder and registered yourself, THAT BUILDER WILL NOT PAY AN AGENT for our work.

Builders operate on a "procuring" basis. If the real estate agent or broker introduces YOU to the builder, that Realtor, agent, broker has "procured" you for the builder and they will pay us a generous fee.

If you visit the builder's sales office BEFORE you introduce a real estate agent, they will not pay us.

So, if you have questions that you can't get answered by the SALES AGENT WHO WORKS FOR AND REPRESENTS THE BUILDER, I cannot help you.

Home buyers are often considering resale homes for sale as well as new construction in the area and in their price range. Agents will spend many hours showing and providing information about resales. However, if new construction is a possibility, we want to be involved in that too, not just the resales that we spend many hours and days showing.

So, to home buyers, I say: "USE YOUR AGENT. USE THEM TO SHOW YOU THE RESALE HOMES FOR SALE and USE THE AGENT TO INTRODUCE YOU TO NEW HOME BUILDERS TOO."

WE CAN HELP.

The two homes shown above, one new construction example and one an existing home, are from the same builder in the same community. WE AGENTS CAN SELL BOTH. Further, we are able to provide you with value opinions not often available from new home builders.

CALL AN AGENT BEFORE VISITING THE NEW HOME BUILDERS.

WE CAN HELP!!

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Marte Cliff

Marte Cliff Copywriting - Priest River, ID

Your real estate writer

Some new home builders give others a bad name - just like some real estate agents give others a bad name. Too bad it's necessary for everyone to be so cautious - but it is.

Mar 22, 2012 02:00 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

"Get financing advice from someone other than the builders in house mortgage company."

Dee Dee. I disagree with this. By going to an outside lender, the buyer loses closing cost help from the builder which is a significant help with our high closing costs.

That said, it's always an option when the benefit of an outside lender is more than the closing cost they are forfeiting. I always run the numbers before they decide.

There are a few builders who will accept an outside lender as long as their mortgage company pre-qualifies first and has an opportunity to compete.

We just have to make sure that the builders mortgage company isn't gouging. This is negotiable.

Mar 22, 2012 02:06 AM

Deborah "Dee Dee" Garvin

C2 Financial - San Diego, CA

C2 Financial

Marte: So true.....

Lenn: I don't think we really disagree that much. There are times when I cannot touch the deal the builder is giving the borrower...and, I certainly respect that. However, I have seen many builders present a great "deal" that was simply a shell game and the borrower was really being taken for a ride. I do not think many agents go the distance you do to ensure your clients are selecting the best course of action for their financing. All I advocate is getting the second opinion.

Mar 22, 2012 02:23 AM

Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL

708.921.6331 - 40+ yrs experience

Dee Dee: Just got done reading Lenn's great post ... and had to hop on over to yours, as well. Sadly, Lenn is spot-on (at least in our area too) when she relates that in-house lenders have the advantage with these buying situations. We have one larger lender in the area that pretty much has wrapped-up much of the new construction/builders in the south suburbs. Especially now, when they are trying to save many of the construction companies' interests, they have some promos going that are almost ludicrous in nature. And I know that those buyers will be out of touch for me. But as you say, it's worth a look ... and I'm certainly more than happy to make sure that the so-called "deal" that a buyer is being offered is truly that. A second opinion costs nothing, so why not take it?? I'll do my best for the buyers .. and give support and advice where I can.

GREAT to see you again, Dee Dee!! Hope you're staying busy ...

Gene

Mar 22, 2012 04:26 AM

Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

Deborah. Getting a second opinion is the right thing to do. However, I've sold MANY new homes and only 2 times has the buyer gone with an outside lender.

In each case, the incentive for the buyer to use the builder's lender was small, about $5,000. The buyer got a better loan with an outside lender and saved money.

Some builders in my area, particularly NVR/Ryan tie their incentive package which may be worth $50-60,000 to using their lender. No way a buyer can beat that outside.

Mar 22, 2012 07:27 AM

Mike Young

203kOnLine.com, covering the USA - Stallings, NC

FHA 203k Consultant 916-758-1809

I like the idea of the photo depicting the home with no landscaping and the artist's rendition of what it could look like. We have a wonderful sketch artist in Sacramento that has done some very nice work for us in that regard. It helps a buyer see what it might look like fully landscaped.

Aug 08, 2012 12:04 AM