Working with a realtor when buying new construction (Denver, Aurora: sales, credit)

[Mikela17]

we are looking at buying a house in broomfield that is located in a new development built by lennar. it is one of the last houses for the builder to sell before they pull out of the area all together.

lennar has stated they will offer a $10k rebate incentive right off the top, but we are wondering what other incentives are offered that we don't know about. i spoke with a realtor friend in texas who said that often when you work with a realtor, there are additional incentives that are designed to be offered *only* to realtors (which are then credited back to the buyer).

does anyone have any experience in this type of situation? or on the same subject, does anyone have insight into lennar's negotiation practices in this type of situation?

thanks!

[Mike from back east]

Originally Posted by Mikela17

we are looking at buying a house in broomfield that is located in a new development built by .... i spoke with a realtor friend in texas who said that often when you work with a realtor, there are additional incentives that are designed to be offered *only* to realtors (which are then credited back to the buyer). Does anyone have any experience in this type of situation? or on the same subject, does anyone have insight into lennar's negotiation practices in this type of situation? thanks!

1. No experience with Lennar. They're known as a high volume production builder, more in the basic / entry-level market. As others wrote, buying from a volume builder can be good or bad, depends on their local construction manager.

2. Here in COL SPGS, we used a Buyer's Broker who specializes in new homes. She proved absolutely priceless, showed us data on who were good builders and who wasn't so good, and stayed with us every step of the way - from picking a lot to breaking ground to settlement, and beyond. A year's worth of effort on her part. She cost us nothing more. She knows all the new homes in the area, knows all the builders, and worked exclusively for us. Her staff also knows the new and resale markets equally well. We did sign a contract with her for her services, but it cost us nothing extra. The contract was to make sure she got paid if we bought a house that she showed us...as there are people who let one broker do all the work, then use a friend or relative to close the deal, stiffing the agent who was the one that really did the work. She uses the contract after getting stiffed a couple of times. There were no incentives being given by builders in the spring of 2005 as the market was so hot they didn't need to. These days, there are a ton of incentives out there and I'd work with a realtor to assure knowing all the ones available to buyers.

3. On the topic of Buyer's Brokers, there's a discussion at: http://www.city-data.com/forum/color...community.html

[steveindenver]

And be prepared to walk away.

We bargained from the start last spring -- took another 7 months before the place was completed (free basement and 40 grand off the base) up until the closing (they purchased points down on the fixed loan). In the end we could have done better, but we did okay.

Also be aware that in that area prices are falling, rather rapidly right now. If this fact does not bother you, use it as additional leverage.

[NS_Highlander]

Below are some tips many people often don't think of to help ensure the new home you get is of lasting quality.

1. If you are moving into a new construction neighborhood or a fairly new resale, check the reputation of the builder. Even if the house you buy now is in good shape, the rest of the neighborhood could be a slum in a few years. For example, I saw a house a few weeks ago that had windows that were taped and not flashed, as well as no moisture barrier between the siding and the OSB board. If the rest of the houses are built like that, I will put money on that neighborhood having rot in the walls in the future.

2. If you decide you want to move into a certain neighborhood also make sure the builder is transparent- even on spec home or resale. There are builders I have dealt with that does not allow walk-thoughs, phase inspections or for you to ever (and I mean ever) talk to the guy who is building your house. The first thing you should do is ask the sales agent what their polices are on the previous issues. If they have such evasive policy's, politely and promptly leave their office.
The question is what are they hiding? Companies like this cut very important corners and do not stand behind their work. Remember, if the customer service is lacking before they sell a home to you, what is it going to be like once you own it and the problems that come with it? Something to think about.

3. Get your home inspected by and ASHI certified inspector. ASHI has the highest standards, more so than NASHI. If you are building, have them phase inspect the progress. If the company won't allow it, LEAVE! Evasive builders never build houses built to last.

5. Get a good Realtor and make sure you are dealing with someone that will represent you when it hits the fan. Someone who will go the extra mile. If the Realtor has their stuff together, they will help you avoid some of the landlines out there. Never deal with an online Realtor that gives a rebate or a kickback. The service is just lacking.

[2bindenver]

I agree, get a good Realtor to be your Buyer's agent, probably cannot help you with the Lennar project (builders only pay us when we come with you in the first visit.) but can introduce you to others in the area.

Initial negotiation with builders are verbal, and you need to be able to walk away. Two years ago I helped negotiate a $100,000 off a new $700,000 property. I also helped CO ROX buy in Aurora last year after the storms, she saved $25,000 off the new home.

It pays not to have another home to sell first, and that you are well approved for the loan amount you are seeking, that you have excellent credit, and that you seek a fair, reasonable deal, not a cutthroat one. Builders have way more money than you do. They also have more buyers walking in tomorrow.

[Mikela17]

thank you all for this information. because of what you said on this forum, along with other feedback we have received, we decided to go with a realtor that was recommended to us. sure enough, she has pointed out some things we didn't realize about the lennar home we were considering...and she has also turned us on to another location in broomfield - anthem highlands built by pulte homes that we love.

thank you all again for your advice!

[bhcompy]

I would go with a Realtor that has knowledge of the builders definitely.

DR Horton seems to be big in the Denver area and I was looking into them in Las Cruces, NM. A friend of mine bought from Horton in California and has been unhappy with initial quality. After researching, I was turned off as well. Quality of materials overall wasn't acceptable to me and it's hit or miss on if you get a good local contractor building the house.

The other thing I would look at is the timeframe for building. If they're saying 3 months, that should put up some flags.

[Sarah_Lynn]

I'm in a situation where I feel a bit "driven-over" by a realtor. I am actively considering purchasing a home by Centex (townhome) MidLane Country Club in Wadsworth IL. A couple of questions.

1. Centex homes lot size seemed small, could this be region specific?

2. I used a realtor to find homes in downtown chicago. Nothing met the criteria I wanted. I went online and found Centex Homes on my own. I called the sales office and made an appointment to check it out. I also, was preapproved before even speaking with this realtor who billed herself as an expert in a particular area. Because I was open, the realtor said she wanted to go with me when I went to visit the sales office. In my heart I felt I didn't need her to come look but I went ahead. Nothing has been signed. Am I obligated to give her funds? There seems to be no room for negotiation from the builder except the incentive they offer. Where does the buyer realtor value come in? The "nice" part of me wants to acknowledge her previous time but the "business woman" in me says no way. I'd rather use the leverage to obtain myself a better deal.

3. You've spoken about "home builder buyer realtor experts." Is it really of value?

Thank you in advance for your opinioins.

[2bindenver]

1. Centex homes lot size seemed small, could this be region specific? It is site specific. Not builder specific.

2. I used a realtor to find homes in downtown chicago. Nothing met the criteria I wanted. I went online and found Centex Homes on my own. I called the sales office and made an appointment to check it out. I also, was preapproved before even speaking with this realtor who billed herself as an expert in a particular area. Because I was open, the realtor said she wanted to go with me when I went to visit the sales office. In my heart I felt I didn't need her to come look but I went ahead. Nothing has been signed. Am I obligated to give her funds? There seems to be no room for negotiation from the builder except the incentive they offer. Where does the buyer realtor value come in? The "nice" part of me wants to acknowledge her previous time but the "business woman" in me says no way. I'd rather use the leverage to obtain myself a better deal. If there is a HBA and or a BRC and Centex is a member, there is no price difference between using a Realtor and not. The Realtor has knowledge and experience in new construction, telling you what is normal and what your choices are for resolving issues.

3. You've spoken about "home builder buyer realtor experts." Is it really of value? If you pick the right one. You may not, at this juncture, be able to rid yourself of this agent, since she accompanied you on your first visit.

[Sarah_Lynn]

Thank you for the advice. I'll be checking HBA and BRC right away. Thanks again.