This Arizona Realtor writes an excellent post about why Buyer’s Representation is critical to home buyers, particularly when purchasing new construction!
Buying a Builder Home Without Representation Can be a Nightmare. This is a scary and unfortunately true story. All names are being protected in this story. Buyers need to take buying a home from a builder very seriously when they enter a builder’s sales center and make sure they are fully represented by a Buyer’s Agent (Realtor).
The main thing to keep in mind is that the “Realtors” working for the builder are actually “Salespeople”. They are trying to meet a quota for the week or month, to get their next plaque on the wall, or win the turkey for Thanksgiving. It is quite unfortunate that Buying a Builder Home Without Representation Can be a Nightmare.
This story starts with a very nice couple in their early 50’s (let’s call them Bob and Bobbie Buyer) tagging along with their friends while they buy their new home. Once the Salesperson (lets call her Susie Salesperson) working for the builder had sold the community and a new home to their friends, she turns to Bob & Bobbie Buyer and says, “So are you ready to buy a home?”. Bob & Bobbie Buyer, who had absolutely no intention of buying a home (new or resale) told Susie Salesperson “no”. But Susie (being a top Salesperson in 2006 and having won all kinds of awards for meeting sales quota) continued to use her newly learned sales pitches to pressure them by telling them, “Well let’s have you get preapproved through our inhouse mortgage company just to see what you can afford. After all wouldn’t you like to live here with your friends in a beautiful new home in this fabulous community?” (Sell, sell, sell Susie Salesperson was doing.)
So you are probably thinking, “Sounds like the typical builder salesperson.” Thats what I thought too until they told me what the salesperson told them to do. They didn’t qualify for the new home through the inhouse lender, so Susie Salesperson told them that all they had to do was change their tax records so they would qualify (just for the loan of course). I don’t know about you, but I think that’s ILLEGAL???? When Bob & Bobbie Buyer questioned her, she said, “Oh it’s just for the purpose of your loan and then you just do an addendum to your taxes to correct them.” Buying a Builder Home Without Representation Can be a Nightmare especially when it is a salesperson such as this one! But this “Salesperson” learned this from somewhere…..hmmmm…maybe the builder taught her to do this? Scary!!
The saddest thing about this story is that Bob & Bobbie truly could not afford this home and never should have been approved for a mortgage. However, the excitement created by Susie Salesperson got them into a home that drained their assets and put them into foreclosure, ruining their credit. They were happy renting a home and never had any intention of buying a home. Unfortunately, they got caught up in the thrill of owning a home (after all they had never owned a home – ever!). Now, they are renting a home again waiting on a buyer to put an offer on their home which is listed as a short sale to try to avoid foreclosure because of this horrible experience of Buying a Builder Home Without Representation Can be a Nightmare.
Any buyers reading this, please beware that you must be represented by a Buyer’s Agent (Your Realtor) when buying a home through a builder. The builder’s salesperson represents the Builder and is doing everything in their power to get the best deal for the seller (builder). They work just like used care salespersons. They receive a “draw” as income and when they make a sale they pay back their “draw”. If they go without making a sale, they could get fired or laid off and owe the builder money for the draws and lack of sales. They are high pressure salespeople. When you buy a home directly through the builder without representation, you give up your right to be professionally and fully represented in the transaction and could end up in a very unfortunate situation like these poor buyers did.
The best thing is that using a Buyer’s Agent to help you buy a home costs you absolutely nothing. The seller (builder) always pays the Buyer’s Agent – you never pay anything! Buying a Builder Home Without Representation Can be a Nightmare! Make sure you are fully and professionally represented by a Buyer’s Agent (a Realtor) before stepping foot into a builder’s sales office, even if you are just tagging along with a friend to look at model homes.
A Buyer’s Agent as the following fiduciary duties to you. A Buyer’s Agent must:
- Be loyal and act in your best interest
- Obey your lawful instructions
- Protect your confidence
- Exercise reasonable skill and diligence when answering your questions
- Be accountable for handling funds and paperwork
- Present all offers in a timely fashion
A Buyer’s Agent works for YOU fully. We are Accredited Buyer Representatives (ABR) and recognized through the National Assocation of Realtors. As your Buyer’s Agent, we act on your behalf to get you the best deal possible on the purchase of your new home, whether it be through a builder, a bank or a regular resale home. Remember, Buying a Builder Home Without Representation Can be a Nightmare.
Joyce and Terry Thomas, Associate Brokers, US Preferred Realty
Follow Joyce and Terry Thomas!
About the Author…
This article was provided by Joyce Thomas, a Nationally recognized Realtor and Certified Short Sale Negotiator and Distressed Property Expert. Joyce can be reached via e-mail at Thomas@DesertSunRealtors.com or by cell phone or text message at 480-620-5586. Joyce has helped thousands of people buy and sell their home. For Arizona real estate and homes see www.DesertSunRealtors.com.
Servicing the following areas in Arizona: Florence, Queen Creek, San Tan Valley, Coolidge, Apache Junction, Casa Grande, and Pinal County Arizona. Specializing in Anthem at Merrill Ranch Florence Arizona, resort style living and active adult living.