More common sense for buyers

[SD Realtor]

Okay without trying to sound pedantic this post is aimed to help buyers, or people who have friends or relatives who are considering purchasing a home.

First off, builders pretty much love buyers who come in unrepresented (without a realtor) because they are like cattle heading to the slaughterhouse. They are generally uninformed, and get blinded by the incentives, the lovely models, and the premise of living in that brand new house. Resellers have essentially chased buyers away because for the most part they do not price their own homes accordingly.

Hey if you are going to buy right now, (and no I am not recommending you buy) but at least take some VERY BASIC common sense steps. I always advise to get a Realtor to help represent you. No the price of your home does not go up. It stays the same. Try to get a rebate from your realtor but if you cannot it still will help to have someone who is looking out for YOUR interest, not for the builders.

MORE IMPORTANT.. Most everyone who buys from the builder will use the builders preferred lender because that is the only way to get the incentives. Now because most every phase is released WAY in advance of completions most buyers are stuck with having to float the loan rate. That means you buy a home, and you are going to be at the mercy of the bond market until you finally lock your rate. You may ask, can I lock my rate now? Most lenders will not let you lock any more then 30-45 days in advance of close of escrow. So how do you protect yourself. Well the first lesson is, if you are going to sign that purchase contract a few months ahead of close of escrow just know you could be having a much higher payment then it was on the day you signed. In the past two weeks we have seen rates shoot up. It can happen, it DOES happen.

You can get a little insight in a very easy manner. Go to Yahoo, go to the financial section, on the left hand side of the page look at the 10 year Treasury aka the 10 year bond. Look at it, learn it, love it. Expand the chart out to see how it is trending. It is impossible to predict what mortgage rates will be but if you look at this chart all the time you will not be a slave of constantly wondering what mortgage rates are doing.

If ANYONE signed a purchase contract in say April or May, it would have been VERY obvious to them that they were signing a contract in a severe rising rate environment. No I would BET BIG MONEY, that while they were sitting there in that sales office, the preferred lenders loan officer and the sales agent, NEVER pointed out these sorts of issues to them. In fact they probably were very non chalant in pointing out that the loan rate would float.

The point is, help yourself. It is not that hard to do. Or get someone to help you at no cost!

[NotCranky]

Didn’t “newguy” get the builder to credit him the commission?

In the interest rate enviornment that SDR is talking about it seems like common sense would be to tell the lender floating the rate is not an option,unless you don’t care.Tell them to float the price to compensate you in case rates change unfavorably. If they don’t want to play, it might make more sense to concentrate on available finished(new) houses,or wait until the phase is finished.Time is on your side. Tell them where to put their upgrades and that you might be back when they get the damn houses built.Don’t be the slightest bit desperate.I think about 90% of agents hungry for a sale right now are going to be pretty non-chalant about little detail like rate increases right now too or if not that something else.
Best wishes

[NotCranky]

Didn’t “newguy” get the builder to credit him the commission?

In the interest rate enviornment that SDR is talking about it seems like common sense would be to tell the lender floating the rate is not an option,unless you don’t care.Tell them to float the price to compensate you in case rates change unfavorably. If they don’t want to play, it might make more sense to concentrate on available finished(new) houses,or wait until the phase is finished.Time is on your side. Tell them where to put their upgrades and that you might be back when they get the damn houses built.Don’t be the slightest bit desperate.I think about 90% of agents hungry for a sale right now are going to be pretty non-chalant about little detail like rate increases right now too or if not that something else.
Best wishes

[farbet]

Unless you demand the 3% you wouldn’t get it. They try to play hardball, so be damm adamant(throw a temper tantrum).Also shop around for the mortage before you go in. Ask them to match it (they can’t). You can then negotiate the incentives that went along with using their broker.
Most of the buyers are suckered in by the financing. This is where they make back the money IMHO.
Perhaps the realtors would work on a fee say $500.00 for a couple of hours work but not the whole thing!!!

[farbet]

Unless you demand the 3% you wouldn’t get it. They try to play hardball, so be damm adamant(throw a temper tantrum).Also shop around for the mortage before you go in. Ask them to match it (they can’t). You can then negotiate the incentives that went along with using their broker.
Most of the buyers are suckered in by the financing. This is where they make back the money IMHO.
Perhaps the realtors would work on a fee say $500.00 for a couple of hours work but not the whole thing!!!

[NotCranky]

Tell them to give you the 3% or get up out of your chair and say …”I MIGHT come back with an agent.” Tell the sales rep it is easier for them to do both sides than it is to deal with an agent.
Oh yeah. then say, with hands on hips chest and head leaning slightly forward feet spread a little beyond shoulder width, “it is a buyer’s market isn’t it!”
Then say “can I have a cold drink I am getting thirsty!” “NOW!”

[NotCranky]

Tell them to give you the 3% or get up out of your chair and say …”I MIGHT come back with an agent.” Tell the sales rep it is easier for them to do both sides than it is to deal with an agent.
Oh yeah. then say, with hands on hips chest and head leaning slightly forward feet spread a little beyond shoulder width, “it is a buyer’s market isn’t it!”
Then say “can I have a cold drink I am getting thirsty!” “NOW!”

[SD Realtor]

See guys, things that have been recommended in this post be everyone, are what people should be doing but they do not when they deal with the builders sales agents.

Also there is not a lender in the world (preferred or not preferred) out there that will lock a loan for some of the lead times that the builders release phases on. Just to get a 60 day lock on a loan is gonna cost you…So that is something that maybe people need to rethink before giving advice on. Also the preferred lenders programs in most cases CAN be beaten by other lenders. However, most people want the incentives and you…. don’t…..get…. them…. if you use an outside lender. You can kick and stomp all you want and the sales lady will smile at you as you walk out the door. However, an astute buyer who will add up the interest will notice that it is better to use the outside lender and forego the incentives because over time there is a crossover.

So the main point is, understand the risk of floating a loan, understand the ramifications of using a preferred lender. To me, the best deals occur when the builders have a property fall out, and they have those quick hit sales that they are trying to sell this one property. These are the best because they can close those deals quickest. Unfortunately many of those types of homes already have a set of upgrades or what have you that cannot be changed. However at least you will not have to float a loan and wait for several months to close escrow.

SD Realtor

[SD Realtor]

See guys, things that have been recommended in this post be everyone, are what people should be doing but they do not when they deal with the builders sales agents.

Also there is not a lender in the world (preferred or not preferred) out there that will lock a loan for some of the lead times that the builders release phases on. Just to get a 60 day lock on a loan is gonna cost you…So that is something that maybe people need to rethink before giving advice on. Also the preferred lenders programs in most cases CAN be beaten by other lenders. However, most people want the incentives and you…. don’t…..get…. them…. if you use an outside lender. You can kick and stomp all you want and the sales lady will smile at you as you walk out the door. However, an astute buyer who will add up the interest will notice that it is better to use the outside lender and forego the incentives because over time there is a crossover.

So the main point is, understand the risk of floating a loan, understand the ramifications of using a preferred lender. To me, the best deals occur when the builders have a property fall out, and they have those quick hit sales that they are trying to sell this one property. These are the best because they can close those deals quickest. Unfortunately many of those types of homes already have a set of upgrades or what have you that cannot be changed. However at least you will not have to float a loan and wait for several months to close escrow.

SD Realtor

[NotCranky]

“Also there is not a lender in the world (preferred or not preferred) out there that will lock a loan for some of the lead times that the builders release phases on. Just to get a 60 day lock on a loan is gonna cost you…So that is something that maybe people need to rethink before giving advice on.”

Nobody said you have to be right when you negotiate..especially unrepresented…That is my point.
In fact it is quite convenient and works to good effect, to not be right or too polite either.You are fighting fire with fire that is all. My real point was if the builder wants to float a loan use it as point of negotiation,period.I agree you should have several options for financing, for leverage if nothing else.
Use everything as a point of negotiaton .
Next: Tell them to pass on some discounts they are getting from subs and suppliers in this unstable enviornment.

Leave the office in the drivers seat.

Why did you start this thread anyway SD Realtor? There are plenty of confused buyer’s coming forward with question on Rich’s blog.
Why did you tell one poster,who just happened to be expressing themselves to be in a dilema about buying or not to give you their email address to get a referral to a lawyer they do not need. Wouldn’t it have been more honest to say here’s My email. Drop me a line if I can help you?

You are one of the best contributors to this blog in my opinion.I have already told you I learn a lot from you. I do think you have ulteriior motives and they are revealed in the slants of your stories and arguments. I also think it doesn’t hurt to try to keep it real.
Best wishes

[NotCranky]

“Also there is not a lender in the world (preferred or not preferred) out there that will lock a loan for some of the lead times that the builders release phases on. Just to get a 60 day lock on a loan is gonna cost you…So that is something that maybe people need to rethink before giving advice on.”

Nobody said you have to be right when you negotiate..especially unrepresented…That is my point.
In fact it is quite convenient and works to good effect, to not be right or too polite either.You are fighting fire with fire that is all. My real point was if the builder wants to float a loan use it as point of negotiation,period.I agree you should have several options for financing, for leverage if nothing else.
Use everything as a point of negotiaton .
Next: Tell them to pass on some discounts they are getting from subs and suppliers in this unstable enviornment.

Leave the office in the drivers seat.

Why did you start this thread anyway SD Realtor? There are plenty of confused buyer’s coming forward with question on Rich’s blog.
Why did you tell one poster,who just happened to be expressing themselves to be in a dilema about buying or not to give you their email address to get a referral to a lawyer they do not need. Wouldn’t it have been more honest to say here’s My email. Drop me a line if I can help you?

You are one of the best contributors to this blog in my opinion.I have already told you I learn a lot from you. I do think you have ulteriior motives and they are revealed in the slants of your stories and arguments. I also think it doesn’t hurt to try to keep it real.
Best wishes

[donaldduckmoore]

Completely agree that SD Realtor is the greatest resource for us, people in this blog and the buyers.

[donaldduckmoore]

Completely agree that SD Realtor is the greatest resource for us, people in this blog and the buyers.

[Ash Housewares]

I agree with Rustico that SD Realtor is a valuable contributer, and I have learned a lot from him (her?). However, I also think his ulterior motives show through from time to time. This passage in the original post made me cringe:

“I always advise to get a Realtor to help represent you. No the price of your home does not go up. It stays the same. Try to get a rebate from your realtor but if you cannot it still will help to have someone who is looking out for YOUR interest, not for the builders.”

We have a slow sales market overrun by new Realtors…they are hurting right now and will do what it takes to get paid. I don’t think you can ever make the statement with a straight face that a Realtor has your interest solely in mind, even in a good market. They don’t get paid unless there is a sale, and it is human nature to respond to incentives. I know several great Realtors, and I like the two on this blog. But I do think it is a bit misleading to make statements like the one above.

[Ash Housewares]

I agree with Rustico that SD Realtor is a valuable contributer, and I have learned a lot from him (her?). However, I also think his ulterior motives show through from time to time. This passage in the original post made me cringe:

“I always advise to get a Realtor to help represent you. No the price of your home does not go up. It stays the same. Try to get a rebate from your realtor but if you cannot it still will help to have someone who is looking out for YOUR interest, not for the builders.”

We have a slow sales market overrun by new Realtors…they are hurting right now and will do what it takes to get paid. I don’t think you can ever make the statement with a straight face that a Realtor has your interest solely in mind, even in a good market. They don’t get paid unless there is a sale, and it is human nature to respond to incentives. I know several great Realtors, and I like the two on this blog. But I do think it is a bit misleading to make statements like the one above.

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