Home Builder Facts

“The Builder didn’t tell me that!”
[updated: 14 June 2012] 

First of all, this is by no means a post to bash home builders! I LOVE working with home builders.  Unfortunately, the average Joe/Jane is not familiar with the partnerships between Builders and REALTORS®, so they walk into a model home blindly.  They shake hands with the Sales Counselor, pick a house and then hit cruise control until the house is completed.  It’s during the “cruise control” when things can go wrong.

The most common “The Builder didn’t tell me that!” complaint I hear is referencing mortgage payments. Some Builders will finance a home using the Real Estate Tax on the land BEFORE the house value is added to it.  So, a year later, when the county adds the House to the Tax Value, the Tax Payment sky rockets and so does the mortgage payment. “OUCH!  I can’t afford my mortgage!”

Another “The Builder didn’t tell me that!” topic is about Home Inspections and repairs. Always remember, the Sales Counselor is not a Buyer’s Representative.  The Sales Counselor works for and represents the Builder at ALL TIMES.  So… when a Buyer asks the Sales Counselor, “may I hire my own Inspector?” chances are the Sales guy/gal will say, “You can but you won’t have to.  We have our own Inspector.”  What’s wrong with that answer?  Well… who do you think the “Inspector” works for?  Yup… the Builder!

We all know if we ended up in a courtroom for some reason, we’d want to hire our own Attorney, right?  Think about that when buying and building a home.  Just as you’d walk into court with your own representation, you should walk into a home-buying scenario with your own REALTOR®.  Many REALTORS® do NOT charge fees to represent buyers.  The Builder pays your REALTOR’S® commission at closing.

And if the thought has crossed or is crossing your mind, the answer is, “no.”  The builders will not reduce their purchase price (in the amount of a REALTOR’S® commission) just because you show up without an agent.  The builder keeps the profit.  If they started reducing sales prices for un-represented buyers, builders would lose their largest source of business, which happens to be REALTORS® and their clients.

Why am I disclosing this to you?  Because it’s important for consumers to know that the benefit of having a REALTOR® is even recognized by Builders.  And since that’s the case, don’t you think home buyers should have one?

Here’s one last example of, “The Builder Didn’t Tell Me That”: When your new home construction is complete, the builder will schedule a walk-thru a few days before closing.  During the walk-thru, you’ll have an opportunity to point out flaws and/or items in need of repair.  Most flaws are cosmetic and easy to fix, but if you don’t know a lot about home construction, you may miss a lot of important details.  HIRE YOUR OWN INSPECTOR.  Most builders will not even suggest hiring a third-party inspector, I’m suggesting that you do!  Yes, even in a brand new home, an Inspector will find more flaws than you think.

The Builder (in most cases) will repair flaws reported by your Inspector.  Just take caution… Some Builders will tell you, “don’t worry… we’ll fix it right after you move in.”  DON’T DO IT!  They want you to sign your closing documents.

If you delay closing to wait for repairs, trust me… THEY WILL MAKE THOSE REPAIRS QUICKLY!  If you close and then wait for repairs, chances are you’ll be on the back burner since you have already sealed the deal!

If you decide to tour Model Homes without a REALTOR®, you are taking a risk.  Builders will have you sign a registration card; and if you leave the REALTOR® section blank, they’ll know you have NO REPRESENTATION.  

If you have a REALTOR®, but want to tour a model home on your own, be sure to add your REALTOR’S® name on the builder’s registration card (and tell your REALTOR® about your visit).  This small step will protect you when you are ready to sign a contract.  Your REALTOR® will have the authorization to represent you throughout the entire building process.  THIS IS YOUR RIGHT AS A HOME BUYER!



Val Aranda, REALTOR®
Metro Realty

Call/Text:  210-378-5987

“Coaching First Time Home Buyers & Sellers.”

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