In my opinion some of these big builders walk a thin line when it comes to ethics. There really should be more regulation around this aspect of the real estate industry. Have You ever asked yourself, WHY is it that a builder can magically give $10k in closing cost assistance to one person (if they use their preferred lender) but nothing to a buyer with an outside lender??
That just screams out I’VE OVERPRICED THE HOME BY $10K to pretend to give you a sweet deal. I heard somebody describe it as a “Buyer Penalty” for not using who they want you to use.
Often there are times when these outside lenders put time and energy into focusing on helping a buyer get to where they need to be to qualify for a home, only to find out that the buyer has been sucked in by these incentives.
HOW TO OVERCOME THIS:
BE STRONG! The builder has a product that you want but you have what the builder wants – BUYING POWER- If a builder does not want to offer an incentive to you in the way of closing cost assistance then take the incentive that they are offering others and negotiate it off the price of the home. Either way they are ending up where they anticipated being and they want to get these homes sold, not hang on to them.
This is not just about loyalty to your current lender, people tend to be more self- centered when it comes to purchases like these, rightfully so.
This is about being financed through a company that already has a plan for getting you approved and are more likely to keep you at an acceptable rate. The preferred lender will quote you a lower rate (sometimes) but typically raises it closer to closing time to make up for any potential losses they would have taken on their end.
These are business men/women they are not all about giving away free money– keep that in mind- Also keep in mind by taking an incentive such as this the more it will cost you in the long run, either with a high interest rate or a higher financing amount on the home.
Threaten to walk away if you must, better yet check out regular resales that are up to a few years old- If you are worried about home warranties request the seller to purchase one for you on another home.
I’m not saying that this tactic will work all the time but standing your ground will help figure out how badly you want the property. Some builders will not budge at all and if you still want it at that point then that is your prerogative.
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Sara & Ashley