Buying home direct from builder\buyers agent a good idea?

itscolduphere · 06-12-2011, 05:55 AM

Gompers,
Personally, I wouldn't consider looking at real estate without a buyer's agent.

If you're looking at new construction, some things to consider:

You really should get a home inspection done even though some builders or the agents that represent them try to talk buyers out of this.

You really should have a real estate attorney in your back pocket. We bought new construction in CT and the builder decided to re-route the sump outlet pipe after the accepted offer, without notifying us OR the neighbor who's property he crossed the corner of, with the new drainpipe! Good thing our attorney made the builder get the easement early on, before we sold the house a couple of years later, otherwise the title wouldn't have been clear to sell the house! You never know what the builder or others will do.... always have people working exclusively in your interest!

Also, thoroughly check out the history and reputation of the builder, and also the history of the property, as well as the future of the surrounding property. Is the lot a filled-in vernal pool? Was the lot once an apple orchard or farm field that contains arsenic or large amounts of pesticide residue? Will there be a cell tower going up on the "greenspace" next to your lot in the future? Check out the water table... maps of this (and or soil/drainage) may be avail. at the town hall. Be cautious because as building land becomes more scarce, builders may resort to filling in land that normally would be a poor choice to build on.

Just be careful.

MrGompers · 06-21-2011, 10:32 PM

Another real estate sales question. I'm looking at some new construction condos and their website is saying you have to obtain a mortgage pre approval letter from a specific lender. How can this be legal?

A pre approval letter from any lender should suffice.

It's on their facebook page. Am I reading this wrong or missing a detail somewhere?

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willow wind · 06-22-2011, 06:04 AM

Totally illegal if that is what it is. You can use any lender you like.

However, it seems that the lender inserted itself onto the Facebook page and put up that statement. I would guess it to be a lender marketing ploy without any legal weight behind it. .

Highly doubtful that any developer cares where buyers get their financing.

You can get your pre- approval letter anywhere you like.

JayCT · 06-22-2011, 07:10 AM

I would talk to the agent directly on this. It seems wrong and if that is the case I would mak eit clear to them that this is unacceptable. Jay

LRPct · 06-22-2011, 08:27 AM

It could be as previously stated OR they could be working around the letter of the law to "not waste their time". It may not be legal to pick your lender for the actual financing, but I bet it's perfectly legal to determine where you get your letter from to make sure it is reliable as Im sure any agent can tell you they've have plenty of pre-approval letters pass through their hands that have about as much worth as toilet paper.

AmyBergquist · 06-22-2011, 11:44 AM

The seller can require you to get pre-approval through a specific lender (as they may know the ins and outs of what that lender is actually doing to pre-approve you, giving them greater confidence in your ability to close the mortgage), but I believe they cannot require you to use that specific lender. We see this a lot with bank owned properties. The bank owning the home requires you to be preapproved through them, but then you can use the lender of your choice for the actual mortgage.

MrGompers · 06-22-2011, 01:18 PM

Thanx for the replies. I can understand a builder and/or seller would only want to show properties to pre approved clients. I don't see why it matters where that pre approval comes from.

Furthermore, if I had pre approval from a lender, and they wanted me to get pre approval from their lender. My credit score could be affected by the continual hits on my credit report. I already know I have excellent credit as I got pre approval last year from a lender.

I'm working with a different bank now and am trying to get a mortgage thru the CHFA first time buyers program or the FHA program. I know that condos have to be pre approved to qualify, so if they are not on the list I'd have to walk away.

CHFA mortgages right now are @ 3.875% fixed for 30 yrs. I don't see how any legit lender can beat that rate. They may be able to beat it with an ARM loan in the beginning, but I'm not interested in any of those loans.

LRPct · 06-23-2011, 05:15 AM

Quote:

Originally Posted by MrGompers

Thanx for the replies. I can understand a builder and/or seller would only want to show properties to pre approved clients. I don't see why it matters where that pre approval comes from.

Furthermore, if I had pre approval from a lender, and they wanted me to get pre approval from their lender. My credit score could be affected by the continual hits on my credit report. I already know I have excellent credit as I got pre approval last year from a lender.

I'm working with a different bank now and am trying to get a mortgage thru the CHFA first time buyers program or the FHA program. I know that condos have to be pre approved to qualify, so if they are not on the list I'd have to walk away.

CHFA mortgages right now are @ 3.875% fixed for 30 yrs. I don't see how any legit lender can beat that rate. They may be able to beat it with an ARM loan in the beginning, but I'm not interested in any of those loans.

Thanx for the replies. I can understand a builder and/or seller would only want to show properties to pre approved clients. I don't see why it matters where that pre approval comes from.

Like I said earlier, BECAUSE many agents have had PLENTY of "toilet paper pre approval letters" pass through their hands. Lenders have different standards/parameters for their preapprovals and many times not much fact checking goes into these pre approvals. Only when a property is selected and the real loan process begins will SOME lenders than check the accuracy of the info the Lendee provided them. If a builder knows WHO/WHERE the approval comes from they can know the standards used and the RELIABILITY of the pre approval therefore, hopefully not wasting their and everyone elses time. Its not really a diffict conceptbto grasp. So many pre approvals aren't worth the paper they are written on. I probally could go today and get multiple pre aporovals for $1mil+ properties when no way in hell I could actually afford that.