New House closing related questions (loans, buyer, inspectors)

[Joe0109]

I have new house closing within 30 days and I have couple of questions.

(1) I have received good faith estimate from the builder. The builder is going to cover the closing cost if I get the loan from the builder. It will be good to know what things builder generally covers. This is documented in the contract but is there any catch. Ideally I would like to have independent bank officer review the good faith estimate. Where should I go have that done?

(2) I would like to have the new home inspected before closing. Any recommendation on this will be great.

[escanlan]

Originally Posted by Joe0109

I have new house closing within 30 days and I have couple of questions.

(1) I have received good faith estimate from the builder. The builder is going to cover the closing cost if I get the loan from the builder. It will be good to know what things builder generally covers. This is documented in the contract but is there any catch. Ideally I would like to have independent bank officer review the good faith estimate. Where should I go have that done?

(2) I would like to have the new home inspected before closing. Any recommendation on this will be great.

I'll let the RE Agents handle question 1 but will speak on question 2. Absolutely have it inspected!! All builders want to build you the perfect house. Unfortunately that is not always the case. The money spent is well worth it, even if nothing major is found.

Make sure that your builder is aware you want a final inspection before closing. Any good builder will not have a problem with having an inspection. Try to have the inspection performed a week before expected closing. That should give the builder time to correct anything major found before you move in, or have proper plans in place to correct it with minimal disruption to you.

You should start interviewing Inspectors now so you can have one picked and ready for the inspection. I know a very good Inspector in your area. He is highly intelligent, ethical and honest. His name is Mike Boyett from Capital City Inspections, 512-577-2579. Give him a call very soon and speak with him. I've sent you a PM with his WEB site, other info, etc.

Good luck!

[austin-steve]

It will be good to know what things builder generally covers. This is documented in the contract but is there any catch.

The catch is in the price. The higher price you pay, the more generous the builder can be with closing costs and incentives. Hopefully you've had a market analysis performed and/or already know the market very well in the area.

Only a competing lender would review your good faith for free, and perhaps try to offer you a better deal, but you probably agreed in your contract to use the builder's lender in exchange for them paying the title policy and offering incentives, so it's hard for another lender to pull you away even if the loan is better, because you'd have to give up your incentives.

Good Luck.

Steve

[hound 109]

Are builders allowed to provide good faith estimates?

Wouldn't that be a conflict on government backed loans?

[centralaustinite]

I know, how exactly does this work? With most loans, the bank does an independent appraisal before approving the loan . . . it seems like a dangerous conflict of interest to have the builder provide the loan.

Please tell me that you have a buyer's rep agreement with your own agent and aren't depending on the seller's agent (ie the agent at the development) to take you through this process.

[austin-steve]

Originally Posted by centralaustinite

I know, how exactly does this work? With most loans, the bank does an independent appraisal before approving the loan . . . it seems like a dangerous conflict of interest to have the builder provide the loan.

The builder's affiliate lender does the loan. Appraisals do have to to be independent though.
Steve