In my 9 years of real estate, I have helped clients buy their fair share of new construction homes. I'm with them through the entire process, no matter where we start in the construction phase.
Some buyers build from the ground up, and I'm there to help them pick the perfect lot. Things to think about is to help your buyers realize why no one has bought "that" lot over there, and why "that" one has a huge discount on it... I help them realize which lots within the community will have the better resale value.
Then, you have some buyers who are buying inventory homes, but there is still time to pick out the interior options like carpet and tile. It's always good to have me as the unbiased third party helping pick out complimentary colors.
Some buyers are buying homes that are completely finished and all they require is a walk thru and a closing date set. I'm still there to help catch all the touch-ups that need to be done, and help ensure my clients are getting the best deal I can get them.
No matter what type of buyer on a new construction home you are, most builders are going to throw incentives at the buyers along with letting them know about their own Builder's Mortgage Company, either one that the builder owns, or one that the builder is affiliated with.
Over the years, in my experience, the builder's mortgage company has always been very competitive. There was only one time where the mortgage company couldn't get my clients approved, but since I always ensure a pre-approval before we look at houses, I knew they were approved with an outside lender, and the builder allowed us to use them in addition to receiving the incentives offered with their mortgage company. Otherwise, rates and fees have always been compared and competitive...
Until my own experience with my own brand new house. In the contract of my brand new construction house, I wrote in there that I could use an outside lender, just like I have the builders do with my other clients, so we're all protected for the "just in case" situation.
In applying for a loan with the builder's lender, they verified that my husband's and my credit scores were well over the 800 mark, which concludes awesome credit! With that, you would think we would be given the absolute best rate from the builder's lender...
Not so fast... The builder's lender actually had me paying 1.687% more points for the same rate as my outside lender quoted me. Huh? Do you know how much money that equates to? That equals over $6100!! No, that's not a typo. Why in the world would I pay an extra $6100 for the exact same rate as another lender? I called the manager of the Builder's mortgage company, and after a very nice conversation, he politely explained that there was nothing he could do.
I took my business to the outside lender and still retained my builder's incentives, but the builder's mortgage company didn't realize I would be able to do that. What does that matter, you might ask? They were quoting me a rate and fee with the anticipation that I wouldn't care about the fees because the Builder was paying for it... And? So? The builder will pay for it with my outside lender too! That shut them up...
All this to say that I can't believe that in all these years, I never ran into this situation with any of my clients, but when it comes down to my very own new home purchase, I get put in this situation.
This is also all to point out about the new legislation that is going to take effect come this summer, July 16, 2009, to where the Builders can no longer offer one incentive to use their own mortgage company and another incentive if you use an outside mortgage company.
John Jones with Homewood Mortgage in Dallas, TX explained the situation in great detail in his blog titled, HUD Suspends New Rule That Would Have Outlawed "Required Use" of A Builder's Affiliated Mortgage Company. Give it a read and let me know your experience with working with Builders and their own affiliated mortgage companies.
And when you're ready to buy that new construction home, make sure you have me working for you on your side. Give me a call!
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Austin, TX and the surrounding areas of Lakeway, Bee Cave, Westlake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Whether you're buying or selling, I'll be with you through the entire process.