Builders Conspire to Put Hidden Fees into New Builds

Transcript

So here’s something that’s come up lately. Now the market’s getting a little softer and it’s harder to get the buyers in there. The builders and some of the realtors are conspiring against first time homebuyers to increase the price of the property and get extra commissions to the realtors. I’ll explain to you how it works.

For example, you got a 500, 000 house. Now typically there’s 3 percent is given to the buyer’s agent. So in that case, the buyer’s agent would get 15, 000 from the sellers. It’s usually built into the sales price, so the sellers would net out 485, 000. Well, the builders have a hard time moving product.

They’re worried about a 2008 all over again, so guess what they’re doing? They’re sending out emails that say, Hey, 6%, we’ll give you 7, 8, 9 percent to the buyer’s agent. Just bring your buyers in. So I’m getting a whole bunch of first time homebuyers. They’re saying, Oh, man, I’d love to do my realtor said that, you know new construction is the best.

It’s the best. Well, that realtor really didn’t finish the sentence. That’s the best for them, not for you. So if you think about it, they’re paying out 6 percent 7 percent 8%. You don’t think that’s going on the sales price? Of course it is. That means the sales price is going up. Like, look at this. It’s at 6%.

That’s 30, 000 on 500, 000. It’s at 9%. You’re at 45, 000 in commissions. Now, you don’t see that. Why doesn’t the public see that? It’s in the MLS. You can only see the MLS if you’re a licensed realtor. So, the builders put it in the MLS. It’s hidden from the public. And these hidden fees, you’ve heard about hidden fees.

This is it. This is one of those fees. It’s a hidden fee. It’s put on there. So, I’ve had some really good agents, and you know what they do? . I had a, a closing recently. The agent got 6% from the builder. They gave 3% back to the buyer and they paid for all the closing costs and we actually bought down the rate with that.

So they got a, an amazing rate and the, I mean, the buyer’s agent still made their 3%. They just didn’t walk away with the six most of the time. Now it’s on the closing disclosure at the very end, but this, at this point, it’s already done. And most people don’t read the fine and print unless you’re a seasoned veteran, unless you know where to look.

So, Builders Realtors conspiring together to increase the price of new of new purchases, and they want to move product. They just want to get the buyers in there, and that’s why there’s this big push. Now, as the as the number of transaction goes down, if there’s a desperate realtor, you gotta push him towards a new build, and they’re going to take that 6 percent that 7 percent that 8 percent that 9%.

They’re going to pay their bills with it. I mean, there are people to but should be disclosed. That’s my opinion. It’s hidden the MLS. I mean, it’s kind of, it’s money built into a transaction. The buyers don’t see. Is that legal? Yes. Is it ethical? In my opinion, not exactly because if you’re, if there’s a fee going to somebody that’s bringing you over there, you, you wonder why, Oh yeah, you need to go to a new build.

You need to go a new build. Look, look, look what they’re, look what they’re doing. You know, there’s no inventory out there. I’ll tell you right now. There is a lot more inventory. I’m seeing seller paid concessions on regular houses. I’m seeing a lot of other concessions. I’ve seen sellers paying for owner’s title policy.

I didn’t even know, I was doing a fee sheet, I didn’t know where to put the seller paid concessions because I haven’t seen them in a few years. So things are turning. Sellers are more desperate. Builders are getting more desperate and they’re using subversive tactics. They did this before 2008. They don’t want to be caught when the music goes out.

They want to push all this product while the music is still going. They’re worried about a crash and they want to move it. So buyer beware, caveat emptor. First time home buyer, you can call me. I can tell you all the tricks. It’s not that complex. You just won’t find out until after you got burned, until after it’s done.

This way you can find out before and we can help you save that money. Again, thank you for the Texas home, Texas home loans and call us. We’ll inform everything about a first time home buyer process and get you squared away. Thank you. Talk to you soon.