Many folks think they don't need an agent to help them with a new construction home. There are some real new home opportunities in the Greater Austin Area. And there are ways to save you money if you know what to look for. Today I want to address some new home buyer misconceptions.
1. The new home Builder's Rep will take care of me. Sounds good and can even be true. Keep in mind He or She is always representing the builder, and the builder's interests. So even when they tell you they are making you a special deal, or they have a way to get past a builder's price structure. Know with you a doubt they are representing a the builder.
How this plays out: I was working with a builder that offered special incentives if you use their lender. This is often the case. However my clients never had credit and required hand underwriting. They were putting a substantial amount of money down, and wanted to do a conventional loan. To get the incentive they had to apply to the builder's lender and if rejected they would receive the benefits offered with their lender. Getting hand underwriting done is not easy to do. The builder's rep put down they were doing an FHA loan. This has the lowest standards for a loan. AND it has Private Mortgage Insurance monthly premium, in this case about 210 dollars per month. it seems simple enough. However, when they achieved a value to owed ratio of 78% they could, with the conventional loan ask to have the Private Mortgage Insurance removed. With an FHA loan this is not possible and would require a full re-finance. This would cost my clients between 3-5000 dollars in refinance fees. I did not save them any money on the purchase but saved them a few thousand dollars by catching that change on the builder's agreement. The builder was not being "bad" just representing their interests.
More to come: Yes a good agent can save you money in Many ways...