New Construction - Binder

[Robyn55]

Originally Posted by JBtwinz

The OP makes me nervous in this type of market. Jacksonville is being overwhelmed in foreclousures and we have so many new developments that are near empty or the contractors are at risk for losing the homes and lots. The buyer is in the drivers seat and no way should be bullied. Besides looking for a good attorney I would spend the money on owners title insurance, it will help you sleep at night. Good Luck

We're a "title insurance" state. No way you'll get a mortgage without title insurance (and you should buy it even if you aren't taking out a mortgage). Robyn

[Robyn55]

Originally Posted by floridabirdlover

I also think I need a good closing attorney. Any suggestions?

Although I'm an attorney - I can't recommend any on the basis of personal knowledge (we had an attorney at our closing - but that was a long time ago). But if you tell us the general area where you'll be buying - I'll take a look and see if I can come up with anyone I'd be inclined to use myself. Robyn

[Robyn55]

Originally Posted by EricBoyd

Zillow is NOT a reliable means of checking market value. They've been known to be 20% off. Folks are much better served by getting an appraisal (or CMA) from someone holding a license to provide such services and having experience doing it. You get what you pay for...

I think 25% or more is entirely possible. At the height of the real estate bubble - Zillow had our house at $800k - which is almost $100k more than any house on our block of 35 houses has ever sold for (and we have one of the smallest houses on our block - although it's on a very large lot). It had other houses on our block at $1 million+. I think its estimate of about $575k now is reasonable (perhaps a bit low) - although the high-low range is about $200k - between low $400s and low $600s. Doesn't exactly instill a lot of confidence <rolling eyes>.

And I wouldn't bother to get an official appraisal. I'd look at comps (easy to get on line these days) or have a real estate broker pull them for me. FWIW - in my HOA - several brokers send out regular mailings (monthly or quarterly) listing all sales. Addresses - sales prices - per square foot prices - etc. If I were going to sell (I'm not anytime soon) - that's the kind of broker I'd want working for me - someone who's on top of things. Note that our HOA has about 1100 houses. It's probably larger than a lot of "neighborhoods" in the metro area. Robyn

[stevep]

The best thing to do is get a real estate agent that has recently sold homes in your targeted subdivision to run a cma for you. Don't be fooled into thinking that an agent that has sent out mailings that lists neighborhood home sales is someone knowledgeable and on top of things... anyone can run that report without ever setting foot in the neighborhood...and don't rely on the numbers in these mailings, because they're not always accurate.

[JaxFlaGal]

Originally Posted by Robyn55

We're a "title insurance" state. No way you'll get a mortgage without title insurance (and you should buy it even if you aren't taking out a mortgage). Robyn

Bear in mind that there are two types of title insurance to be aware of: 1. lender's coverage (lender will required if you're getting a mortgage) and 2. owner's coverage. Lender's coverage ONLY protects the lender's interests if there are title defects uncovered later. Owner's coverage is what protects your interests as a borrower. When you're financing a home, you'll probably get a discount on obtaining an owner's policy at the same time the lender's policy is researched and issued - called "simultaneous issue".

In today's market in particular, getting owner's coverage makes sense. it's only a bit more money to protect yourself as well as protect your lender.

Also if you're buying in a new construction area where sales have dried up, review the financial soundness of any developer, builder, and HOA / CDD you'll be doing business with. If any of them are in shaky position but you're in love with the area and refuse to walk away, ask your real estate attorney to fully explain your downside risks - what happens to your short-term interests if the developer defaults without finishing the development's amenities, what special assessments you may face if the HOA or CDD is running in the red, etc. Also, what protections do you have if the builder faces default while your home is under construction. Bear in mind, a builder can be in default of loan covenants and face additional financial challenges from their lenders long before they file any sort of bankruptcy protection. Know the contract protections. If they're a public company, review their annual reports. If they're a private company, you can still obtain information on their financial position, including a Dun & Bradstreet report, Better Business Bureau information, and state licensing data.

[stjohnsresident]

Hi, What did you decide?? I noticed this post was from 2 weeks ago. I was just curious, what area of St Johns county is this home in and what is the square footage? And can you tell us the builder?? A 1% binder is typical for most builders so getting it down to 2500 was great.. 30k is way high and I wouldn't except this either. Buying a home is stressful so finding out if your getting a great deal should help ease your stress and make the jumping through hoops a little easier to bear because when your done it makes it all worthwhile. The builder needs a binder because they are taking the home off the market in order to hold the home only for you.. in hopes that everything goes well with your lender. When their preferred lender handles the transaction.. they get to feel all warm and fuzzy that everything is going through o.k.. Good luck, love to hear more about your outcome!! I live in St Johns county and loooove the schools.. I moved here just because of them.

[floridabirdlover]

The builder was Taylor Morrison and we decided to walk from the deal and go with another builder. We found out that none of the other builders were asking for a binder anywhere near that amount!