Builders Just don't get it! A Lexington SC Home sale tale.
I almost cringe every time I see the words "Builder will pay closing cost with preferred lender." First let me say that I do have preferred lenders as after 15 years in the Mortgage industry you cant really get by with much on financing that I haven't seen. So get your pencil sharp and play it straight.
My Lexington South Carolina First Time home buyer has very little of his own cash to work with. Getting married, finishing college and trying to plan a honeymoon has depleted there funds. And they want to buy a Lexington South Carolina home to start that new life. They have 100% Rural Development financing approval from Bank America. My Lexington South Carolina Market has plenty to offer first time home buyers that can qualify for Rural Development Mortgage loans. So off we go to view some homes.
They loved a new construction home in Persimmon Grove and all that was left to do is negotiate the closing cost and the builder and I had a new happy customer. Well it wasn't that easy! And it never happened.
With a full price offer the builder didn't want to pay $2,000.00 in closing cost UNLESS we used there preferred lender. That was fine too, until we got the good faith estimate that was $1,711.00 more in closing costs than my preferred lender. The customer would have saved a huge $289.00 dollars but they would also have to spend 1711.00 more to close. That makes them bring $1,422.00 more out of there pocket to close on the Builders home. UHHH My Lexington South Carolina First Time home buyer has very little of his own cash to work with! What do you not get Mr Builder?
So now we move on to find a homeowner or a builder willing to work with a 100% Rural Development home loan. Its really simple Mr Builder! With 100% financing and the Builder paying all closing costs and the buyer paying all his prepays, you would have sold this inventory home in Persimmon Grove. Do you just not get it?
Lexington South Carolina first time Home buyers need to shop around for there mortgage when looking at new construction. Or have a Realtor that knows the mortgage savings that you can get. Is using the builders preferred lender really saving you any money? In this case NO! It would have cost $1,422.00
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Copyright © 2009 by Laura Jefferson Lexington South Carolina's Realtor
Lexington South Carolina Real Estate, Columbia South Carolina Real Estate Blog
Chip Jefferson
Laura,
Builder's have had a rude awakening too over the past couple of years. I have worked as a New Homes Sales Agent AND as Realtor, and know this subject intimately.
The Builder's do try and create relationships with preferred lenders-mostly for prequalification-but SMART Builder's will work their incentives with a pre-approval from a QUALIFIED, solvent lender...and this is where the Realtor comes in.
Realtors who create relationships with the Builder Sales staff,independent of working with clients, are more likely to have even a more conservative Builder work with them, since they are "in relationship" with them. It's frustrating-I know- but just think of a Builder as any seller, and "farm your new home tracts regularly. As a Realtor, I've received referrals from these relationships and, as a New Home Sales Agent, referred to those agents who were familiar with our developments.
Hope this helps.
Hey Laura,
Sad for the buyers that the developer wouldn't couldn't make it work. RD is a good choice out my way and not everyone has looked into it. 100% financing...what a lousy deal :), and one less home on the inventory. Sounds a lot like win-win...
all the best...