Builder/Lender Incentives

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Real Estate Agent with RE/MAX Northwest Realtors, Inc. 425-308-3669

OK, we are all professionals. My buyers are always pre-qualified before we start looking for a home. I get a pre-approval letter to present with my offer. My buyer walks into a condo conversion in downtown Everett. We look at the unit, my buyer is estatic -- we just sold his home for full price in one day. The the oppps.

The site agent says, well if you use our lender your client gets a $4000 credit on closing costs. How can you beat that. For my client's best interest we use the builder's lender (who just so happens to be affiliated with Countrywide that I work with) however, they have created their own little in-house lending firm for this project. We are also subject to the builder's title and escrow, heaven forbid they should pay full price.

Oh well, just spouting off. We bit the bullet and used the in-house lender, builders title and escrow and my client is happy.

Your thoughts on these incentives. Do you have them in your areas?

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Rainer
431,609
Maureen Francis & Dmitry Koublitsky
SKBK Sotheby's International Realty - Birmingham, MI
SKBK Sothebynulls - Metro Detroit

Yep.  We have them too.  And I've seen the credit as high as 25K.  So who wouldn't use the builder's lender?

I don't like it.  Is the builder just trying to assure that the deal will close.  I do understand that. 

Or is the builder getting some kind of preferred deal on his contruction/mortgage loans based on this?

Maybe a builder's agent out there knows?

 

Aug 27, 2006 07:19 AM #1
Rainer
283,403
Teri Isner
Keller Williams Celebration - Orlando, FL
GRI, CRS, CIPS
Karen sometimes it is very hard to compete with the incentives when you use their lender.  Many times have tried to work around it but more often than not the builder's deal is just better. 
Aug 27, 2006 03:13 PM #2
Rainmaker
210,293
Toby Barnett
Barnett Associates R/E Team - Marysville, WA
Toby Barnett

In a slowing market builders may be sitting on a lot of inventory which doesn't make them any money if they are not selling. Our builder uses a preferred lender to encourage the sale of their homes. The builder has to create an incentive to buy new construction vs a home that has been built even a few years ago. I think it would be hard to get people into new construction if there were no incentives.

Aug 27, 2006 03:30 PM #3
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Rainer
96,277

Karen Villa Schweinfurth

ABR, CRS, SRES, CyberStar
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