subject: Top National New Home Expert [print this page] Even now, during what I call the divine timing rainbow of buyer opportunity, the super strong buyers market, with interest rates at all time record lows, great selection of inventory and much higher energy-efficiency standards, buyers are missing out in a big way. Some are scared, but buying anyway, because of the other positive factors I just mentioned. Others are waiting for some kind of new home hero. And, the homebuilders love it. Its their free urgency pitch. They know that it can be exploited, and in many cases, they can bully or frighten consumers into not wanting to miss out, and purchasing anyway, despite not receiving full fairness and all the best financial terms.
By law, at least in Florida, all buyers are entitled to fair representation. A real estate transaction is supposed to be at arms length and fair by definition. That means the seller has proper representation, and the buyer has proper representation and protection. Only then is there fairness. Its just not happening. The sad reality, is that many real estate agents are either in the builders back pocket and really representing the wrong side, or not experienced enough to provide the proper representation that new homes demand. The few buyers who brave it alone (because of course, builders will tell you that you dont need a real estate agent to buy a new home) are even worse off, at the full mercy of the homebuilder. Its their chance to make even more profit by exploiting the buyers disadvantage of having no or very little new home knowledge and experience. Or even worse, just information provided by seller websites.
Now for the truth that nobody wants to talk about. This is inside information that you will not get anywhere else. Either because the other experts dont care, dont know, are really on the sellers side (the homebuilder in this case), are chasing higher commissions, or are afraid of the homebuilders not paying them commission for revealing buyer saving secrets, the truth- or what I call doing the right thing. Its taken me 10 years to accumulate this, and not to brag, but I was one of the best on-site sales counselors in the country, be assured that youre getting the very best information.
Price Protection
This is the area that holds the most mystery to re-sale realtors and almost all buyers. There are so many inside factors, that for the sake of not making you read 200 pages, Ill be brief. First, recognize that supply does affect this, regardless of extra incentives and discounts you may be able to discover. Im not saying youll be able to get a home with a $200,000 market value for $150,000. However, there are some hidden incentives that can in many cases be either negotiated or uncovered.
Some on-site agents have access to what are called bbpis (builder back pocket incentives). Ive seen them as high as $20,000. Basically, its a closing tool that they use to create urgency. However, in many cases the bbpis are not used, because they receive extra commission on any amount they can save. In short, they make a lot more commission at your expense. If you can get them, they can usually be used for several different things, ranging from an interest rate buy down, extra closing costs, and even free design upgrades. Your poker face will be very important. Dont show urgency even if its the home of your dreams from childhood.
Finished builder inventory homes are another great opportunity to look for hidden discounts. Once a home is completed, the builder is carrying the financing, sometimes up to $3,000 per month. So, theyre very motivated to sell the home quickly. Dig deep, Ive seen homes discounted below market value, up to $30,000. It takes time and knowledge, but is very possible in many situations.
Slow selling communities- Know the true sales pace of your new home community. I would never accuse an on-site salesperson of lying to get a sale or putting a sold sign on a lot thats not really sold but, beware of false sales numbers being reported. Focus on the net sales, there are always cancellations. Theres a big difference between a supply/demand curve of 10 per month and 5 per month. And it could mean the difference between you getting no discount, a small discount, or a sizeable discount. Use government property appraiser websites for free and research accurate numbers.
