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Old 05-27-2018, 12:01 AM
 
2 posts, read 434 times
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I am a first time home buyer. I got preapproved for a loan 100% finance (0 down). I thought I had found a very ideal townhouse (builder Toll Brothers) but am having some concerns. It is new construction and I was told the townhouse will be ready in 12-15 months. Toll Brothers have a preferred lender TBI mortgage, however I told the sales rep I had been preapproved by an outside lender for 100% finance and no mortgage insurance. She agreed TBI was not going to beat that and also agreed with me going with the outside lender. She said by going with the outside lender I wouldn't get their 'special' of being given 5K at close, also there would be a difference in closing cost.
When I first looked at the model with the sales rep I was told I had to pay $9K as earnest money that needed to be put down to hold the land and get things moving. However, by the next visit when the rep and I set down to design a layout and what I wanted, I was told once again about the 9K, but now it was an additional amount to reserve the land (fyi the lot price had not changed). I also was told I needed to put down 5% of base price + addl deposit for upgrades e.g. extension of home, etc, all of which have to paid within the next couple of months. This is now over 30+K.
The sales rep told me I would get ALL the money back once I close. I also was told I still had to put in an application with TBI to get preapproved to move forward. ?? Once again the sales rep was aware of my 100% finance. I contacted the outside loan officer who had given me my preapproval. When I ran the above by her she "reminded me" that I had 100% finance and those terms given by the sales rep at Toll Brothers, are terms when there is NO 100% finance ie usually by their lender-TBI. She also said 15 months out for a home was a very long time (recall sales rep told me 12-15mo). I then spoke to a friend who is a homeowner and he said the exact thing as the outside lender.

I am now very leary of going forth. I love the townhouse. I don't have a realtor b/c I thought I could do it on my own, but I will now get one. I was just looking for anyone else experience and or advice, especially with Toll Brothers?
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Old 05-27-2018, 08:18 AM
 
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https://www.bankrate.com/finance/mor...explained.aspx

You better do you homework ahead of time. Does your lender know this is for new construction. Normally you have to put 20% down, but their earnest fees sound ridiculously high. If you can put that much earnest money down, which can be lost, you wouldn't need a no money down loan.

I'm not a pro so I don't know but find out more before you jump in blindly. I don't know if there even is a difference in townhome loans or single family home new loans or if it's a builder in a development rather than having your own home built.
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Old 05-27-2018, 04:02 PM
 
2 posts, read 434 times
Reputation: 10
Quote:
Originally Posted by LifeIsGood01 View Post
[url]https://www.bankrate.com/finance/mortgages/construction-loans-explained.aspx[/url]

You better do you homework ahead of time. Does your lender know this is for new construction. Normally you have to put 20% down, but their earnest fees sound ridiculously high. If you can put that much earnest money down, which can be lost, you wouldn't need a no money down loan.

I'm not a pro so I don't know but find out more before you jump in blindly. I don't know if there even is a difference in townhome loans or single family home new loans or if it's a builder in a development rather than having your own home built.
Thank you. I agree. I actually spoke back to the Toll Brothers rep and expressed my concern and confusion as to why I am paying 5% downpayment if I have been preapproved for a 100% finance loan. I am now told that it is also "earnest money". Although, even on the preliminary paperwork I was given it say downpayment. Also the rep says they forgot to mention that although she had told me they would give me 26K on closing cost (which close is 28K), that now it would only be 3% (which would only be them giving $8,400) b/c she says my outside lender limits the amount they can give on closing. Thats a big difference. So I technically would only be getting back about 12K of the 31K I would be putting down. Also she reminds me I have to submit an application with TBI mortgage (which is Toll Brothers lender) but I don't have to accept, however, I'm not suppose to tell TBI I'm going with an outside lender....this sounds very suspicious to me. She said their mortgage lender would just be there if I loose my current outside lender. But if I use TBI they cover closing cost, however, I also will have to pay an additional 3% downpayment at close.??? And I would be paying mortgage insurance. Recall under my outside lender's program it's 100% finance and no mortgage insurance. Something doesn't feel right.
Today I found some articles on the internet in regards to lawsuits against TBI and people loosing all their savings. Although I really loved the townhouse I think I will look elsewhere.
I just contacted a real estate agent to help me on my search.
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Old 05-27-2018, 08:49 PM
 
8,836 posts, read 5,462,494 times
Reputation: 9279
Quote:
Originally Posted by Roserossy View Post
Thank you. I agree. I actually spoke back to the Toll Brothers rep and expressed my concern and confusion as to why I am paying 5% downpayment if I have been preapproved for a 100% finance loan. I am now told that it is also "earnest money". Although, even on the preliminary paperwork I was given it say downpayment. Also the rep says they forgot to mention that although she had told me they would give me 26K on closing cost (which close is 28K), that now it would only be 3% (which would only be them giving $8,400) b/c she says my outside lender limits the amount they can give on closing. Thats a big difference. So I technically would only be getting back about 12K of the 31K I would be putting down. Also she reminds me I have to submit an application with TBI mortgage (which is Toll Brothers lender) but I don't have to accept, however, I'm not suppose to tell TBI I'm going with an outside lender....this sounds very suspicious to me. She said their mortgage lender would just be there if I loose my current outside lender. But if I use TBI they cover closing cost, however, I also will have to pay an additional 3% downpayment at close.??? And I would be paying mortgage insurance. Recall under my outside lender's program it's 100% finance and no mortgage insurance. Something doesn't feel right.
Today I found some articles on the internet in regards to lawsuits against TBI and people loosing all their savings. Although I really loved the townhouse I think I will look elsewhere.
I just contacted a real estate agent to help me on my search.
Good luck. If you went ahead with the sale you wouldn't lose the extra earnest money it would be used as a deposit or down payment or partial payment on the house or they would have to return it, earnest money is to insure that you don't change your mind, if you do they keep it. Don't get mortgage insurance unless you have no other choice and if you do make sure it's only until you have paid 20% of the house down and that it's not for the life of the loan.

Here here are some reviews I found online, mostly bad https://www.consumeraffairs.com/hous...-brothers.html

Oh my God you are so lucky, run and never look back, do not give them a penny, warn others and do not even buy a home that was built by them that is being resold. What a fun read that complaint site is.

I've read reviews where people say the drywall is bad, the electrical is bad, the AC does not go upstairs or into certain rooms, they promise things and then it's not in writing and you are the loser.

Also they will keep your earnest money, there are a few stories of people who have lost it when they were denied, but the TB mortgage would not deny them but made it impossible for them to be approved so they kept over $30K of some people's hard earned money. Find an existing home with a good inspector. Older homes are better than their McMansions.

Last edited by LifeIsGood01; 05-27-2018 at 10:14 PM..
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Old 05-28-2018, 06:09 AM
 
Location: Cary, NC
30,490 posts, read 53,430,148 times
Reputation: 28767
Quote:
Originally Posted by Roserossy View Post
Thank you. I agree. I actually spoke back to the Toll Brothers rep and expressed my concern and confusion as to why I am paying 5% downpayment if I have been preapproved for a 100% finance loan. I am now told that it is also "earnest money". Although, even on the preliminary paperwork I was given it say downpayment. Also the rep says they forgot to mention that although she had told me they would give me 26K on closing cost (which close is 28K), that now it would only be 3% (which would only be them giving $8,400) b/c she says my outside lender limits the amount they can give on closing. Thats a big difference. So I technically would only be getting back about 12K of the 31K I would be putting down. Also she reminds me I have to submit an application with TBI mortgage (which is Toll Brothers lender) but I don't have to accept, however, I'm not suppose to tell TBI I'm going with an outside lender....this sounds very suspicious to me. She said their mortgage lender would just be there if I loose my current outside lender. But if I use TBI they cover closing cost, however, I also will have to pay an additional 3% downpayment at close.??? And I would be paying mortgage insurance. Recall under my outside lender's program it's 100% finance and no mortgage insurance. Something doesn't feel right.
Today I found some articles on the internet in regards to lawsuits against TBI and people loosing all their savings. Although I really loved the townhouse I think I will look elsewhere.
I just contacted a real estate agent to help me on my search.

Smart!
In this instance, a good agent would have told you:

1. Toll is not a great builder, just a pricier production builder jamming in more off-the-shelf knick-knack millwork and ornamental stuff than cheaper production builders.

2. That you have to compare the interaction with the interaction with other builders, to gauge if you are being treated how the market treats buyers, or if Toll stands out as poorer to deal with.

3. That you have to consider location, amenities, proximity to services, surrounding environment, and compare to the competition.

4. That no one goes on line with happy stories about any builder. Therefore you see mostly low ratings in online www.ImMadAsHellAndNotGoingToTakeItAnyMore.com sites.
Toll has many satisfied owners.

5. That the 5% "Downpayment" would have been credited back to you at closing as part of your costs, and is actually an Earnest Money Deposit so you have skin in the game and cannot walk away scot-free without a thought.
That is fair for the builder, because they take on costs and risks when building for you.



A good lender would have told you:

1. That you were limited to 3% CC Credit because of the loan program you are discussing. And, that that is not Toll's creation or issue.
It is wholly due to the loan product you choose.
Now, the discrepancy is difficult to completely digest, because it would appear that Toll was talking about a 9%+ credit, and that is very unusual.
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Old 05-28-2018, 06:23 AM
 
8,836 posts, read 5,462,494 times
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Quote:
Originally Posted by MikeJaquish View Post
Smart!

4. That no one goes on line with happy stories about any builder. Therefore you see mostly low ratings in online www.ImMadAsHellAndNotGoingToTakeItAnyMore.com sites.
Toll has many satisfied owners.

.
That is not true, even on that site and others they have a few good reviews. When you have egregious problems going on you are going to get the truth about how bad they are. When people are very happy they recommend the builder and give glowing reviews online and are happy to do so.

With the BBB they still have a good rating even though the majority of the reviews are bad maybe because you have to pay them to join or because of their algorithm.

as far as that site you link there is no such site.

They made $145 million keeping people's earnest money when they told then they would not qualify, we are not talking $1K we are talking $40K. They make you at least apply with their lender and don't give preapproavals so they can claim you are not qualified and not return your money. God forbid the home appraises for lower than it is selling for, back 10 years ago they made you pay the whole extra amount or they kept your earnest money, and now they may split the difference with you but if you don't or can't pay your half you lose your earnest money.

And all would be well if they did good work, but there are a lot of problems with their expensive "luxury" homes. Oh and you say it's their right to keep the earnest money, but they go and sell that home again so you basically stole your money. They also have other tricks to get them to use their lender. They take away all the free upgrades and do other things that make it harder for you to get an outside loan. Also they are said to have the worst HOA rules that puts everything in their favor as the developer including not being able to put up for sale signs on your home, so they can sell a new one instead. They also seem to screw over their contractors and only offer 1 year warranties and tell you to wait until the 11th month in case the same problem happens elsewhere because they are only gonna fix the problem once in one spot.

Last edited by LifeIsGood01; 05-28-2018 at 06:33 AM..
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Old 05-28-2018, 08:57 AM
 
Location: Cary, NC
30,490 posts, read 53,430,148 times
Reputation: 28767
I think you are all over the place with your advice.
I don't think the OP should just jump in, but just that she is smart to engage an agent with a clue and some experience in new construction. If the contract is too complex, perhaps an attorney, too.

There is much she does not understand, and that makes her easy prey for too many onsite sales reps.



Quote:
Originally Posted by LifeIsGood01 View Post
That is not true, even on that site and others they have a few good reviews. When you have egregious problems going on you are going to get the truth about how bad they are. When people are very happy they recommend the builder and give glowing reviews online and are happy to do so.

With the BBB they still have a good rating even though the majority of the reviews are bad maybe because you have to pay them to join or because of their algorithm.
Everyone who doesn't need a guardian knows that BBB is a scam.

Quote:
Originally Posted by LifeIsGood01 View Post
as far as that site you link there is no such site.
Read again. "Sites." Because it was an illustration, maybe a bit of too wry and too dry in humor, but merely an illustration. Maybe I could have said "-type sites."
Hmmm... Actually, it could be a fun domain and site and the .net variation of the domain appears to be available for purchase.
Someone is squatting on the .com.

Quote:
Originally Posted by LifeIsGood01 View Post
They made $145 million keeping people's earnest money when they told then they would not qualify,
Citation, please?


Quote:
Originally Posted by LifeIsGood01 View Post
we are not talking $1K we are talking $40K. They make you at least apply with their lender and don't give preapproavals so they can claim you are not qualified and not return your money. God forbid the home appraises for lower than it is selling for, back 10 years ago they made you pay the whole extra amount or they kept your earnest money, and now they may split the difference with you but if you don't or can't pay your half you lose your earnest money.

And all would be well if they did good work, but there are a lot of problems with their expensive "luxury" homes.
All national builders have problems. It pays any consumer to be realistic.

Quote:
Originally Posted by LifeIsGood01 View Post
Oh and you say it's their right to keep the earnest money, but they go and sell that home again so you basically stole your money. They also have other tricks to get them to use their lender. They take away all the free upgrades and do other things that make it harder for you to get an outside loan. Also they are said to have the worst HOA rules that puts everything in their favor as the developer including not being able to put up for sale signs on your home, so they can sell a new one instead. They also seem to screw over their contractors and only offer 1 year warranties and tell you to wait until the 11th month in case the same problem happens elsewhere because they are only gonna fix the problem once in one spot.
I did not say it is Toll's "right" to do anything.
I said it is "fair for the builder" to keep the deposit when a buyer terminates or breaches.
And, it is common among builders. Toll is not different, and many of the terms cited are common among national and local builders.
I have seen deposits from $2000 to $120,000, and all with the stipulation that it would cost the buyer their deposit to terminate.
Getting preapproved by TBI.... Actually, if the OP were inclined to proceed, approaching TBI for preapproval would be the very next step before stroking a deposit check.

My contention is that the OP is smart to engage a good agent for assistance in navigating the process.
One thing that agent will do is counsel the buyer not to overprice/overbuild, to stay within other recent sales values to avoid failure to appraise.
Any buyer should know that onsite agents are hired to maximize the company's results.

So, specific to this buyer, what alternative product, what location and what specific builder whose precise terms would you propose where she would experience none of these difficulties in purchase of a sub-$300,000 townhome with similar features, which she loves?
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Old 05-28-2018, 09:16 AM
 
8,836 posts, read 5,462,494 times
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Quote:
Originally Posted by MikeJaquish View Post
I think you are all over the place with your advice.


Citation, please?


[/b]
I replied first and then did not edit out my response because I didn't know they were as horrible as the reviews state and that they appear to be scammers. That's why it looks like it's all over the place. My first advice was in thinking they were a legit company that cared about home buyers,

As far as the citation I can't find that specific amount but i did read it. I found a close amount.



From fiscal years 2006 to 2011, according to its own SEC reports, the publicly traded company retained $123 million in forfeited deposits from 3,300 prospective homebuyers. https://www.mercurynews.com/2012/07/...rs-deposits-2/


“I represent builders who would never consider deposits as a potential profit center,” West Chester, Pa., attorney James Tupitza said.


the builder is the most aggressive firm in the industry in resisting fair settlements and keeping deposits even when the company suffered no financial harm from a failed deal.

One of his clients received a loan commitment from Toll Brothers that included such unrealistic conditions as his client selling his own home for $85,000 above the listed price and qualifying for a loan amount higher than any bank would offer. And when the conditions aren’t met, Toll Brothers keeps the deposit.

They can make more money by not building the house,” he said.

Most deposits are lost due to Toll Brothers’ rigid loan-approval contract language




It's looking like you have some sort of vested interest in defending Toll Brothers.

Last edited by LifeIsGood01; 05-28-2018 at 09:36 AM..
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Old 05-28-2018, 09:24 AM
 
Location: Cary, NC
30,490 posts, read 53,430,148 times
Reputation: 28767
Quote:
Originally Posted by LifeIsGood01 View Post
...



It's looking like you have some sort of vested interest in defending Toll Brothers.
Thanks for the citation.

Amazing, that you found that request without reading my post.
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Old 05-28-2018, 09:34 AM
 
8,836 posts, read 5,462,494 times
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Quote:
Originally Posted by MikeJaquish View Post
Thanks for the citation.

Amazing, that you found that request without reading my post.
I think you are all over the place with your answers. Good luck to you sir.
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