Can A Builder Fire A Buyer?

By
Real Estate Agent with RE/MAX Elite 513.520.5305 www.LizTour.com SAL.2002007747
https://activerain.com/droplet/5gSy

Greater Cincinnati new construction homesCan a builder fire a buyer?

After all, isn't the saying "The customer is always right!!"??

So if the customer wants something shouldn't the builder work to take care of the buyer's desires?

Or can a builder decide the buyer just isn't worth the hassle?

Well, I'm obviously NOT an attorney, but if you consult one who has access to the typical Cincinnati area builder's contract the attorney will probably tell you a few things after reviewing the contract:

1.  The contract is DEFINITELY written in the builder's favor

2.  There are clauses to protect the builder (e.g. delivery time can be MUCH later than the usual 5-7 months)

3.  If you violate the contract you're at risk of losing your sizable down payment

For the most part, builders DO want to maintain favorable relationships with every buyer.  After all, you know the saying that a disgruntled customer will tell MANY more people about their experience than a happy client, so happy buyers are good for the builder's business.

But if you've ever heard the stories about the Bridezillas, then it's not a far leap to imaging some Buyerzillas out there too.  Demanding changes the builder can't easily make.  Wanting things for free that normally carry a charge.  Bucking the schedule and delaying the process.

A builder MAY choose to tolerate some of what they consider "misbehavior", especially if demand is down.

But if the market is strong and a builder knows they could sell the same lot and a comparable home next week, why would they add the stress to their lives? 

So the short answer?  Yes, a builder CAN fire a buyer.

Last year we had a buyer contact us and prior to contacting us she'd had a local builder's legal department send her a "don't contact us, our reps, etc." letter.  They'd had enough.

And we know of buyers that have gotten termination letters from builders because the buyer's demands had gotten out of hand.  They'd had enough.  Get with the program, follow the contract you agreed to, or you can go somewhere else to build a home.

Two different builders, same response. 

Thinking about Cincinnati new construction?  Hire me to help you.  The major Cincinnati builders all factor agent commissions into the price of ALL their homes and they don't provide a discount for NOT using the services you're already paying for.  So with that in mind, why wouldn't you call 513-520-5305 and put me (Bill) to work for you?  And please make that call BEFORE you walk into the builder's model or both of us will be out of luck!  Let me make the introduction, that's just one of the first steps in what I'm being paid to do for you!

 

Again, just give Bill a call at 513-520-5305 or email Liz@LizSpear.com and we can discuss how we can help you with your new construction home search! 

Serving Greater Cincinnati home buyers and sellers,

Bill of Liz and Bill aka BLiz

 

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Serving Warren County Ohio & Adjacent Areas

 

The Liz Spear Team of RE/MAX Elite
Elizabeth Spear, ABR, CRS, Ohio License SAL.2002007747

William (Bill) Spear, CRS, Ohio License SAL.2004011109  Kentucky 77938
Ask for us by name if you visit the office!

EHO Two locations: Lebanon & Mason, OH
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Liz Direct: 513-265-3004     
Fax: 866-302-8418

MailTo:  Liz@LizSpear.com

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Ginger Harper 01/15/2019 11:33 AM
Topic:
Home Buying
Location:
Ohio
Groups:
Bananatude
Bartender, Make it a Double
Tags:
new construction

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Ambassador
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Bill

There is some great education for would-be new home buyers.

Buyers interested in new builds in your area would be wise to contact you early on to understand all the ins and outs of buying in a new home community, AND understanding the contract!

Jeff

Jan 14, 2019 05:53 PM #21
Ambassador
2,214,600
Wanda Kubat-Nerdin - Wanda Can!
Prado Real Estate South - St. George, UT
So Utah Residential, Referral & Relocation REALTOR

Yes, a builder can fire a difficult buyer and will again Bliz. The 4-corners of the contract needs to be respected by all parties. Building a home is a very tedious venture and people can get carried away with emotion.

Jan 14, 2019 05:54 PM #22
Rainmaker
506,030
Ellen Caruso
Daniel Gale Sotheby's International Realty - Glen Head, NY

Being the wife of a builder, I know so well what your saying! Buyers can become so difficult to handle, and make life difficult for the builder. For instance if they insist on certain tiles or things and they are backordered throwing the builder off schedule it doesn’t help him. My husband prefers to finish it, you buy it approach, and save a few headaches!

Jan 14, 2019 05:57 PM #23
Rainmaker
337,839
Dana Basiliere
Rossi & Riina Real Estate - Williston, VT
Making deals "Happen"

Bliz, this paragraph from your blog post is fantastic. . may I use it with modifications of course. 

"Hire me to help you.  The major Cincinnati builders all factor agent commissions into the price of ALL their homes and they don't provide a discount for NOT using the services you're already paying for.  So with that in mind, why wouldn't you call 513-520-5305 and put me (Bill) to work for you?  And please make that call BEFORE you walk into the builder's model or both of us will be out of luck!  Let me make the introduction, that's just one of the first steps in what I'm being paid to do for you!"  So many buyers think they will get a deal going to the builder without representation. 

Jan 14, 2019 06:06 PM #24
Rainmaker
322,513
Barbara Flannery
USA Realty,Inc. - London, KY
"Homes for Everyone In London Kentucky"

Great Post !!! Thanks for sharing!!
Have a great Real Estate Week !!!!

Jan 14, 2019 06:38 PM #25
Rainer
420,689
Rose Mary Justice
Synergy Realty Pros - Dandridge, TN
Synergy Realty Pros

Some buyers are just a pain to work with when buying new construction. Forever changing th plans.

On the other hand I have a builder to change the plans on the buyers more than once.  His attitude is take it or leave it.

Jan 14, 2019 07:37 PM #26
Rainmaker
978,622
Jan Green
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Interesting thoughts.  It's a very smart idea to hire you for advice about Cincinnati new homes.  I've never seen a builder do that but then again I'm not in every corner of the city either.  Sometimes it's impossible to make everyone happy! 

Jan 14, 2019 07:50 PM #27
Rainmaker
19,664
Jim Broline
RE/MAX Enterprises - Downers Grove, IL
Chicago Suburban Property

You cannot fire an non-employee. You can sue them for breach of contract. You can breach the contract yourself when the conditions are intollerable. Ask an attorney. 

Jan 14, 2019 08:23 PM #28
Rainer
147,108
Dr. Karen Lewis, Broker 305-3231556
K1 Realty Group - Pembroke Pines, FL
Residential for Sellers and Buyers in S. Broward

I think that a builder should be able to fire a buyer.  Some clients don't understand the legalities of certain things in real estate and some just don't want to understand but to protect my organization, if that means firing a buyer that's the way it will go..

Jan 15, 2019 02:41 AM #30
Rainmaker
83,067
Jerry Thomas-Construction Loans
Cranbrook Loans - Farmington Hills, MI
Construction Loans Jumbo/Conventional/FHA/VA

New Construction is niche area and requires more education time with the client. Having said that I've had to fire a handful of clients in my day. Clients that challenge every step of the process, don't respect our time or just have unreal expectations. 

Jan 15, 2019 03:47 AM #31
Rainmaker
449,880
Scott Seaton Jr. Bourbonnais Kankakee IL Home Inspector
SLS Home Inspections-Bradley Bourbonnais Kankakee Manteno - Bourbonnais, IL
The Home Inspector With a Heart!

As a former contractor salesman for over 30 years, I've seen both sides. I had to "fire" a couple contractors in my day. They were asking for the moon, slow to pay, and complained with far too many oddball requests that were just not what any other builders were asking for, or getting. Best thing for us was to let them go drive our competition crazy. 

Jan 15, 2019 06:52 AM #32
Rainer
218,580
Greg Mona
Faira Homes Corp - Scottsdale, AZ
Real Estate in the 21st Century!

Interesting post, Liz and Bill Spear. While there are no doubt "buyer-zillas" out there when it comes to new home construction (and pre-existing for that matter!), there are also some "Homebuilder-zillas" as well. We had a recent new build sale where the developer made all sorts of changes they didn't have to and did them at no cost to the buyer. Their goal is happy customers and great reviews.  On the same token, I worked with a buyer who had nothing but excuses and roadblocks from the builder but was thankfully able to extricate himself from the contract. It cuts both ways in that sector of the market.

Jan 15, 2019 08:26 AM #33
Rainmaker
636,379
Mike McCann - Nebraska Farm Land Broker
Mike McCann - Broker, Mach1 Realty Farmland Broker-Auctioneer Serving Rural Nebraska - Kearney, NE
Farm Land For Sale 308-627-3700 or 800-241-3940

Three of my neighbors did not use an agent when buying from the developer of our neighborhood...they had all kinds of problems throughout the process and especially during the warranty process.  I also did not use an agent and represented my wife and myself.  I had zero problems with issues with the builder....especially when my driveway had to be replaced in the warranty year and other minor issues.  But I knew what I was doing...they did not.  The value of having a knowledgeable agent represent you far outweighs any disadvantage of having someone else involved on your behalf. 

Jan 15, 2019 09:28 AM #34
Rainer
260,230
Richard Foster, J.D.
Nevada Perfect Homes - Henderson, NV
Broker Owner - ABR/M, CREN, CRS, GRI, RRG, SFR

The key to a solid transaction, traditional or new construction alike, is in setting expectation in your client. We know builders are crazy, and have the power in their contract to wield that power. Short of a good attorney that can challenge a contract of adhesion, what a builders preset terms are, buyers have little if any power.

As agents, it is our job to make sure we tell them that up front. I have had a number of buyers that wanted new construction, after being educated about the risks, that changed their minds and dealt with the problems of resale, just to keep a reasonable level of control. 

The key is to educate all clients of all pros and cons, and let them move forward with knowledge.

BTW, never forget, because of federal laws, something builders cannot contract around, builders lose a ton of their power with VA and FHA buyers.  A good reason to move struggling buyers to new construction!

Jan 15, 2019 10:16 AM #35
Rainmaker
398,633
Steven Beam
RE/MAX Alliance - Parker Colorado Real Estate. - Parker, CO
Parker Colorado Real Estate

Track home builders typically will not...atleast not in our area. I have seen custom home builders vet buyers for weeks before agreeing to build them a full custom home. Builder's contracts are always written on the builder's behalf. 

Jan 16, 2019 07:44 AM #36
Rainmaker
323,959
Sharon Miller
RE/MAX Platinum - Crane Hill, AL

Liz and Bill,

Many years ago, when I sold only residential real estate (not waterfront lake property) I worked with a building contractor who built any number, of what I would define, as "tract homes". He built a good quality home, as such, we never had to address problems commonly associated with poor workmanship or inferior materials. 

In any case, as construction was nearing completion, I would begin to "show" his home to perspective buyers. Needless to say, there would always be that buyer who wanted the many extras and would make his desires known. Joe, my contractor business associate, as I would often reference him, had a very simple solution to buyers who "demanded the moon" but were as "tight as a tick" when it came to paying for the "extra's". 

I remember on numerous occasions when Joe, the perspective buyer, and myself, would be on location discussing final details of a potential sale. Items like....paint and trim colors, cabinet door handles or light fixture designs were being discussed, when out of nowhere, the potential buyer would begin to demand such items as gutters and downspouts, bath/shower glass enclosures or granite counter tops in the bathrooms, to be included in the quoted price of the completed home.

Joe's response was always the same. After listening intently as the perspective buyer continued to ramp up his level of adrenalin along with his demands, Joe would politely interrupt, making the following comment, "I have described, in detail for you, those features I am including with this construction. Based on my built out delivered price and what you have just specified, I don't think I will be able to satisfy your needs."

The meeting would usually abruptly come to a close. The buyer would have to consider whether he wanted to purchase Joe's newly constructed home as is, or agree to "pay for the extras". If neither option was acceptable, I would suggest the buyer move on.

Joe was accommodating when he considered the playing field to be level, try and entice him to throw in the freebee's at his cost......."sorry, don't think I can help you!"

Jan 16, 2019 08:08 AM #37
Rainmaker
299,380
Jim Paulson
Progressive Realty (Boise Idaho) www.Progressive-Realty.info - Boise, ID
Owner,Broker

Here in Boise, Idaho; the market is so strong that our largest volume builder, CBH Homes, just announced they are no longer doing presold homes!  They are going 100% spec homes so they don't have to deal with a buyer during the construction process.  When the market slows down, they will become more accomodating again.

To me it is all about setting expectations up front.  Some builders are much better about change orders.

I love new home construction so a buyer can get the home of their dreams!

Jan 16, 2019 08:58 AM #38
Rainmaker
515,188
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

Important blog for new build buyers to read.  They often think the new home will be perfect, easy to make changes--and it's not.  Buyers do not have the leverage they do in a resale purchase.  And, the new builds are rarely finished on time!

Jan 17, 2019 07:49 AM #39
Rainmaker
401,223
John Wiley
Right Move Real Estate Group- EXP Realty - Fort Myers, FL
Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA

Very thought provoking post.

You point out well that a builders contract is written in their favor.

As to "firing" a buyer, that would be determined by the terms of the contract.

I encourage all buyers who are looking at new construction to have their own, Knowledgeable and Professional real estate agent to help them through the process. I also remind they can have an attorney look at the contract before signing to help them navigate the tricky parts.

Jan 17, 2019 08:54 AM #40
Rainmaker
1,139,115
Joyce Marsh
Regal | Christie's International Real Estate - Orlando, FL
Regional Manager Regal Christie's Int'l Realty

Many years ago one of my buyers turned into a "buyerzilla" and in the end, the builder and buyer agreed to part ways. As you can imagine, it was not a pleasant situation and turned out to be very stressful for everyone involved.  

Jan 27, 2019 02:54 PM #42
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