Don't Trust The Builder
Shiny objects. Fancy Counters. "Design credits". Closing cost help. All this can be yours, if you just trust the builder. Their escrow/title company. Their lender. Your own representation? You don't need that! Someone with a fiduciary duty to you? Don't worry about it!
But what about the buyer who bought a high-end home from a well known builder with electrical defects that caused a fire? Followed by the builder fighting tooth and nail to avoid liability, causing a nightmare for the new home owners? What about the builder who insisted the buyer not have a home inspection (after all, it's new, PRISTINE, construction!), and during the home inspection (which they got at my insistence - funny, their in-house lender wasn't insisiting) they discovered electrical outlet covers with nothing but dry wall behind them?? What about the builder who wasted the buyer's time with their own "in house" lender promising the moon and the stars (we wouldn't preapprove them because they didn't qualify) - after putting in notice, and planning their move, the builder's lender delivered the bad news - they didn't qualify. What about the builder who took a $120K deposit from an unrepresented buyer, then did just about everything they could to keep that deposit and keep the buyer from buying the home (home values went up during the construction phase and the builder was sitting on $120K!).
What about (the most recent case, and 1 of 2 recent cases where a builder acted really shady) the builder who offered the buyer $8K to use their "preferred" lender (and ONLY if they used their preferred lender), and then stuck one sentence into a 60+ page contract stating the buyer would be responsible for costs that are usually covered by the seller. Guess how much that cost the buyer? Yep, you guessed it. About $8K.
Here's the only 3 facts you need to know:
- The builder cares about THEIR BOTTOM LINE. That's it. They don't care how they get there
- The builder IS NOT LOOKING OUT FOR YOU. Neither are their sales reps - they're there to sell for the builder, and that's where their loyalties lie. (same with their lender)
- If the builder is pushing you to NOT be represented by someone that would have your interests at heart, there's a reason for it.
As a buyer (and ESPECIALLY FOR FIRST TIME BUYERS), it may seem appealing to purchase new construction. And it can be! Many builders do beautiful work on new homes, but a buyer NEEDS representation. That huge builder contract that is often amended 3-5 times over the course of construction is not a list of suggestions. It's a legally binding document, often with thousands of dollars at risk for buyers attached to it, and it is always, always, always written to benefit the builder and only the builder.
Delays on the builder's end? That's OK, it's covered in the contract. Delays on the buyer's end? Sorry buyer, you're out of luck, and the builder may be keeping your deposit.
Buyers, you need a real estate agent - a fiduciary. You need a lender that cares about you and your family's financial picture, not just quoting a rate and moving on to the next buyer getting that shiny builder credit. I'd even go so far as to say a buyer should be using their own escrow/title company whenever they can - buyer's need people ON THEIR TEAM.
One final note: Any builder that tells you you don't need an agent, or don't need an inspection, or don't need any part of a transaction that protects and benefits you, you need to walk away from, or better yet, be firm with. It's YOUR HOME. It's YOUR FUTURE. Be firm, and demand YOUR PROTECTION. And don't trust the builder. All of the above "What about the builder who..." experiences are things I've seen first hand. It happens. Don't let it happen to you.