Interested In Buying A New Home? “Make Sure You Have Representation”
The purchase of a NEW HOME in central Florida is a great experience but one to be
vigilante when working with Developers and their personal sales consultants or
salesperson whichever they may call themselves. What you must remember that if
you go on your own to purchase a new home that at all times the salesperson or
home consultant will be representing the developer at all times and why you
should be represented. We have represented buyer/s in the past who had placed
contracts on a NEW HOMES that were
smooth transitions. Some have been buyer/s that have had bad experiences in
trying to buy a NEW HOME from a
local Developer, including buyers that had a really bad experience with the contractual
agreement they had with the Developer. These NEW HOME buyers came to us to represent them in their next NEW HOME purchase with a tale of what
they went through that we would like to share with our readers. In the purchase
of their NEW HOME our buyers who
went directly to the Developers sales consultant were promised during the
negations of the sale and purchase agreement that the NEW HOME would be on the time schedule they had agreed upon to have
turned over to them. The NEW HOME
was not ready for the completion date and there were certain features that were
promised to be added to the NEW HOME
were delayed or not the same material or color as promised which was not added
to the contract agreement by the sales consultant who represents the Developer.
They had to obtain the services of an attorney to get them out of the contract
and retain their escrow deposit that the developer was trying to confiscate
even though the sales consultant from the Developer should have sat with the
buyers and read the contract and point out that they the Developer was not
honoring the contract and failed to deliver. But once the buyers complained to
the sales consultant who they thought was their representative and good buddy
because he was so nice and hospitable turned his back and referred them to the
Developers legal department and recommended that they obtain an attorney
themselves. Then the sales distance himself and cut off all communications with
the buyers. In all when you are buying a NEW HOME you have no representation. We have had experience when we have
reviewed sales and purchase agreements with our buyers in purchasing a New Home Construction, Developers have
typically disclosed that the Sales Consultants do not represent the buyer/s but
the Developer and make it clear on their contracts while in many occasions,
require that our buyer/s sign of or initial the disclosure stating so. Ask
yourself why would they disclose this or have buyers sign off or initial this
disclosure?
See the example below of what to look for in their contracts.
THE NEW HOME SALES CONSULTANT
LICENSED IN THE STATE OF FLORIDA EXECUTING THIS SALE AND PURCHASE AGREEMENT
BELOW REPRESENTS SELLER (DEVELOPER) EXCLUSIVELY IN CONNECTION TO THIS
TRANSACTION AND DOES NOT REPRESENT OR PURPORT TO REPRESENT BUYER/S.
Buyer: _______ Buyer: ________ Seller:
_________
Note that the contracts are
written by the Developer/s legal department structured to be typically over 70
pages long and want you to sit down and review all the pages by the same
individual who does not represent you the Sales Consultant. You are not buying
a cell phone or plan you are buying an investment of a life time and an
investment that you live plus enjoy with many emotional ties. So, you would do
not want to go it alone when buying a NEW HOME. You will need a professional or professionals to represent you when
you purchase a NEW HOME. You will
need a REALTOR that ethically through the local Realtor Board membership has
ethical requirements to represent you and your interest and not the Developer.
Let’s review some of
the Marketing, Teasers and Lure tactics used by the Developers.
The Developers know very well
that consumers especially NEW HOME
buyers are visual and buy with emotions. They have a one product in their favor
and we must agree that they have new homes and it’s hard to compare that to
resale homes. We all want new and its very much understandable, but one should
never steer away from buying new but do so smartly, compare plus be aware of
who represent you.
THE TEASE:
The NEW HOMES marketing targets buyers with print ads, street
directional and online venues. They use a specific Model Home/s as the teaser
and they offer it at the actual lower price range. Notice that they advertise
for example. “NEW
HOMES from $200,000.00 to $500,000.00”
Note the $200,000.00 to $300,000.00 are already sold or longer in
inventory.
THE VISUAL:
The NEW HOMES besides being new are professionally staged to capture
your emotions, desires, needs and most of all your eyes (Visual).
Note that what you see is not what you get. Once you sit down with the
Developers Sales Consultant they will start of the NEW HOME at the actual lower
end for example at $300,000.00 because the $200,000.00 are no longer available
or in inventory. You fell in love with the Model (VISUAL TEASE) but you are being
sold a bare standard home. That’s when the upgrades are tagged in at a price
and you up another price range on the NEW HOME which could be another $50,000.00.
THE LOCATION:
So, you have bumped up the price
of the NEW HOME to get all those
features that you saw or wanted and your sitting their feeling great that you
are building your own home the way you wanted her comes the next feature of
buying a new home which is key in real estate. Location, Location, Location…
That is when the Developers Sales Consultant offers you a review of the sight
map with open lot that shows those lots that are already reserved. You are then
asked by the friendly Developers Sale Consultant. “Were Would You Like To Have Your Built”?
Note that the Developers are very aware that land is of value and have
already down their land sight analysis and selected those lot sights to be sold
at a set price and those lots that are in layman terms known as bigger, longer,
larger having special features like waterfront or conservations. The keyword is
premium lots. That will kick your home up another price hike much higher than
the features you fell in love with in the model home. Take note the model homes
are ever seldom built on those Premiums lots. Premium lots can go for another $100,000.00 to
$200,000.00 to the price tag of
the NEW HOME that you saw as a model home.
THE INCENTIVES:
You came in looking at NEW HOMES at a price a lower price
range as advertised but know you are buying a home at the advertised high end.
You do have a NEW HOME that will be
built to your desires and specification and you have selected the prime
location if you can afford the kick up in price then you are followed up with a
Sale and Purchase agreement presented by the Developers Sales Consultant. But
let’s say like many feel that you are above budget or do not feel good about
the lack of transparency in the presentation of the home, you offered buying
incentives. Although some Developers offer upfront incentives in advertisement
or upon the entry to the Development site many do not. These incentives come in
paying for closing cost. A set amount for example $10,000.00 towards closing cost. They can offer a pool or an
extra feature typically on the exterior of your NEW HOME.
Note that in NEW DEVELOPMENT
when there are incentive they are made to make you feel good that you got a
great deal or you are getting something back from the Developer because he
wants to earn his trust after he kicked up the price of the NEW HOME from the advertised teaser
price. But is it there an INCINTIVE/S?
Well here is the kicker with their incentives. To get their incentives you have
to use their full-service package. This means you must use their Affiliated
mortgage company and their selected or Affiliated Title company. Then there is a Developer / Builder fee
placed into the Developer Sale and Purchase Agreement that the Developer Sales
Consultant makes sure is added to the contract. This could be a 1 to 3% charge
of the purchase price of your NEW HOME.
Since you use the Developers mortgage
company to receive the incentives and their Title company the closing fees are
up charged like a higher interest rate on the mortgage. Then there is the
Developer fee you must pay at the day of closing. So, is there much of an
incentive well maybe a couple of thousand?
THE TIME FRAME:
The Developer Sale Consultant
will typically work around a date and time that they will have the NEW HOME completed and a closing date.
They will even offer a much sooner time frame that you will have your NEW HOME completed. They do this to ask
for a typically higher down payment or escrow deposit to separate the lot for
the home and have your commitment in good faith that you will close upon the
completion of your NEW HOME. Note
that in our experience the typical turnaround time for the NEW HOMES are not within the contract agreement and in many cases
inside the Sale and Purchase Agreement our buyers have executed with the
Developer it states that although there is a set time for a closing date it is
not guaranteed. Be expecting that if the Developers Sales Consultant states a
specific closing date or NEW HOME
completion be expecting 1 month later from that date. This is a current fact
especially with the large amount of NEW HOME construction and lack of county inspectors to certify all the new
homes and slow delivery of material/s that is in large demand not just for the NEW HOMES but also the local THEME PARKS and increase of commercial
development. Think about the amount of down payment also known as the Escrow
Deposit you wish to put down. We recommend the least amount you can put down. In
most cases your escrow deposit will go into the Developers selected escrow
account and they are more in control of your deposit. We want to point out that on the day of closing the Developers Sale Consultant
will not be with you at the day of closing and it is typical since you are not
being represented!
As New Homes Real
Estate REALTOR Broker Specialist We Can Assist You With The Following:
We will Exclusively Represent You, as a NEW HOME BUYER! We will be by your side to represent your best interest in the purchase transaction and be your side from contract to closing.
We will provide you with local
research on current real estate market conditions, builder pricing and
comparable housing options to ensure that you are receiving a competitive deal
from the builder.
We
will personally read through the entire purchase contract for you, which can be
lengthy with many special addendum's. We will point out any important
notes and answer any questions you might have about the Developers Sale and
Purchase Agreement.
We will educate you and walk
you through the entire process, including signing the Sale and Purchase
Agreement, providing down payments, selecting options and upgrades, paperwork,
proving financing options. Throughout the process, we will also stay in
constant contact with the builder sales person keeping this stress out of your
life. We will also be with you at the day of closing. Remember the Developers
Sales Consultant does not represent you and will not show up at the day of
closing and it is typical but we will not leave you along throughout the
transaction including the day of closing.
While the Developer Sales
Consultants can only sell that specific builders site no other we can Represent
You with all the other Developments and even compare price, features and
incentives plus place you more competitive with each Developer to get you a
better deal. We have relationships with all builders in Central Florida and can
represent you in a transaction with any of them. We are also on their contact
list and receive updated NEW HOME
inventory of NEW HOMES that have
contracts that fell through on their Sale and Purchase Contract giving you a
great opportunity to get into a built NEW HOME at a great discounted market price.
If you have not completely
ruled out the idea of buying a resale home, we can be looking for resale
options at the same time we are visiting NEW HOME developments. In the event, you decide that a NEW HOME is not for you, we can
immediately begin an aggressive search to find you a resale home that suits
your needs which will not be any cost to you as our buyer/s.
The Developers Sales
Consultant will try to get you incentives that will force you to use their
lenders and title companies. We can consult you and revise the cost or the good
faith closing statements to see if the Developers mortgage and title affiliated
companies is best for you. We can assist in seeking your own competitive
lenders and title companies that will give you the best deal as well compare
cost and good faith estimates.
We hope you find this
information helpful and think about having a REALTOR Professional Represent you if you decide to buy a NEW HOME in central Florida. We are
accessible at our contact numbers:
Guy Sanchez 407-401-1510 or KatherineFigueroa 407-417-4227. Please visit our web site to review more local real
estate information and updated listed property inventory at www.GuyAndKatherine.com
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