Orlando Real Estate, Orlando Buyers Agent, Orlando Homes, Orlando Buyers Broker: How to lose $40,000 on Orlando New Construction

How to lose $40,000 on Orlando New Construction

It is easy to lose money on Orlando New Construction. 

Here are some grand ideas:

  • Go alone. What do you need an agent for?
  • Rely on yourself.  You don't need an expert opinion.
  • Trust the builders sales person, they smile so nicely.
  • Don't hire your own Buyer agent. You are smart enough.

It's just that easy to lose money on Orlando New Construction when you don't have your own agent.

Think I am kidding?  Just watch this video about how a local Orlando Homebuyer lost $40,000 when he bought a Orlando new construction home without an agent. Learn from his costly mistake.

This aired yesterday, so play the video and READ THE DETAILS.   This buyer purchased a new construction home through a national builder.  He lost $40,000 because he did not understand the contract that he signed.

 

How does that happpen?

Easy. Many homebuyers become blinded by the beauty of the brand new homes luxury upgrades found in the model homes.  Even the onsite builders person is so personable and nice!  The buyers get excited and become too friendly with the builders sales person. They forget that there are business details behind this highly emotional purchase.  

This is why you need your own buyers agent.  A good buyers agent will keep you grounded and aware of all the nuances.  After all, nothing is as perfect as it seems...there is also the small print in the contract that is written only to protect the builder, not you the home buyer.

 

The builders sales person is not your ally

The sales person at the new construction works for the builder, not you the buyer.  They will smile and answer your questions about the process.  However they will not mention any negatives about the home, location or community.  They will not tell you about the caveats in the contract, the timelines to stay compliant or the fact that there is no appraisal contingency.  You are for sure on your own.

 

Think that you can decipher the builders 30 page contract?  I bet not. Most homebuyers do not understand even a fraction of what they will be required to sign. Yes, that is one of the big reasons that you need to bring a good buyers agent with you.

 

A good buyers agent is priceless...

good buyers agent will read the contract! Before my buyer goes to contract on Orlando New Construction, I request a copy of the builders contract to review.  We highlight any "buyer beware" issues and make sure the buyer understands the terms.  Believe it or not, most sales people that work for the builder do not understand their own contract. Not to mention, they are not allowed to even try to explain it.

 

Not long ago I requested such a contact from the builders rep.  He was not thrilled, so he sent me 92 pages of contracts and addendums the night before, most of which were not relevant to that community. Yes, I read and understood all.

The next morning, I disputed what the builders salesperson stated which was different  from what the contract really said. I received an addtional $16,000 in builder concessions for my buyer client. I also requested a reimbursement for the buyers hotel stay which was advertised on their website. That was several hundred dollars back to the buyers pocket. Builder Concessions are not unusual if you know what to ask for.

 

More services a good Buyer Agents will do:

1.  Watch your timelines so that you do not jeapordize breeching the contract and losing your deposit...just like in the video.

2. Give you the negatives (and positives) both about the property and terms of the contract.

3. Attend meetings and inspections on your behalf.  Most of our buyers are from out of town and cannot attend, so we go to make sure that everything goes smoothly and there are no surprises. 

4. Issues do come up in the transaction, that the buyers do not know how to deal with or are not comfortable in confronting the problem. Every home buyer needs an savvy agent that is willing to actively mitigate any conflict. We are experienced.

5. Save you money.  There are times when the builders are negotiable and a good buyers agent can seize those opportunities by knowing what to negotiate. Some home buyers mistakenly think that if they come in without an agent, the price will be reduced.  Not a chance! More than likely, the buyer will spend more than they need to.

6. In addition, a buyers agent will help with financing, title, insurance, and where to place your deposit.  Will you put it in an escrow account or will you put it in the builders pocket for their use? Ask us what is best.

7.  Last but not least, all builders will pay the buyers agent if you include them.  Builders will  not discount your price one penny if you come alone. They simply don't.

Smart home buyers always hire their own agent. What the media says about buyers agents. Talk with an Expert Buyers Agent at Buyers Broker of Florida.  Do not be one of those buyers that call our office for help after they signed a contract and are now stuck.  Our consultation is free. 407-539-1053

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Representing ONLY the best interest of the Home Buyer...never the seller.

 Eve Alexander Orlando Buyers Agent

 

Comment balloon 39 commentsMike & Eve Alexander • January 13 2015 09:25AM

Comments

This is an amazing story Eve.  As I watched the video all I could think of was . . . CAVEAT EMPTOR!  Many buyers think they can SAVE money going directly to the builder and/or seller.  "Thinking" you know about buying real estate and having the acknowledge knowledge and expertise are TWO separate things.  

I'm not sure how this will play out but if the contract is clear on the terms and conditions, buyer may be SOL.  They read it, they signed it.  But what they should have done is . . . have a buyers broker.  Your company is just a phone call away!! 

Posted by Carla Muss-Jacobs, Principal Broker (503) 810-7192, Buyer Focused ~ Buyer Results (BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time) over 2 years ago

Carla Muss-Jacobs, Principal Broker/Owner :  I thought that the news clip was powerful.  Buyers that view it  will probably see things differently ...the rest will continue to believe it will never happen to them.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Absolutely!

I had more than one buyer go straight to the new home builder and they paid more than they should of and didn't get the benefits that I would of negotiated into the deal like a 5 year warranty 100% of the time (if I don't successfully negotiate the 5 year warranty, I pay for it out of my pocket). Most of the time I'm able to provide (in addition to the negotiated savings) a 1% rebate (of total purchase price) right back to the buyer.

Posted by Pete Xavier with X Group Real Estate Advocates, Outstanding Agent Referrals-Nationwide (Investments to Luxury) over 2 years ago

Pete X with X Group Real Estate Advocates, Huntington Beach, CA 714.459.2017 OCLister.com The warranty's that the builders provide here are typically good, but the prices climb. Good job.

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

Great piece Eve!  That news clip is powerful.  Buyers have no idea what they are getting into and believe everything the builder's sales agent says.

Posted by Christine Smith, Exclusive Buyer Agent & Attorney, Canton, MA (Buyers Brokers Only LLC - www.BuyersBrokersOnly.com) over 2 years ago

Christine Smith Thank you. That is why homebuyers need you to represent them...

 

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) over 2 years ago

I'll be back . . . to re-blog this.  BTW, where did you get the embed link?  Wonderful post and this should be a feature!

Posted by Carla Muss-Jacobs, Principal Broker (503) 810-7192, Buyer Focused ~ Buyer Results (BuyersAgentPortland.com | Portland Metro Exclusive Buyers Agent | 100% Buyer Representation ~ 100% of the Time) over 2 years ago

This is very good reading for prospective home buyers.

Happy Valentine's Day!

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) over 2 years ago

Eve and Orlando, this is must reading for anyone buying new construction!  A good agent and a compulsive home inspector are important parts of your team.

Posted by Patricia Kennedy, For Your Home in the Capital (Evers & Company Real Estate, Inc.) over 2 years ago

Wow such a shame...definitely a must read for anyone thinking of buying without an agent.

Posted by Debbie Walsh, Hudson Valley NY Real Estate 845.283-3036 (Shahar Management) over 2 years ago

Excellent post. When I represent builders in new construction, I always encourage buyers to obtain their "own" representation. In my opinion, it's best for everyone. ( Even the builders!)

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORs® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) over 2 years ago

Hi Mike & Eve Alexander ,  Excellent blog!  Every potential homebuyer should be aware of all this information in your blog, before even thinking about going for a new construction home.

Posted by Larry Johnston, Broker,Friends & Neighbors Real Estate, Elkhart,IN (Broker, Friends & Neighbors Real Estate and Elkhart County Subdivisions, LLC) about 2 years ago

Not all new home builders are like Lennar Homes, however, the purchase contract certainly has items in it the buyer does not fully understand.  It pays to have a New Home Consutruction Expert on your team.

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) about 2 years ago

I agree that a buyer should ALWAYS have a real estate professional on their team, working with them and advising them each step of the way. Great post.

Posted by Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional, Palm Harbor, Dunedin, Clearwater, Safety Harbor (Charles Rutenberg Realty) about 2 years ago

I love this post! I am going to include it in my New Construction Buyer Packets.

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) about 2 years ago

Very sad for that family. This was quite easily avoided if an agent had reviewed that contract for him. I'm a little bit shocked that Lennar would keep that deposit. Even if they can keep it...should they? What a hit to their reputation. 

Posted by Nathan Tutas, Your Central Florida Real Estate Expert (Tutas Towne Realty, Inc.) about 2 years ago

There are sharks out there in those waters.. that buyer went in the shark infested water without his protector..  UGH.  Mike & Eve Alexander 

Posted by Judi K Barrett, BA, Integrity Real Estate Services -IDABEL OK (Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma) almost 2 years ago

What an awful experience for anyone to have to go through.

Posted by Evelyn Johnston, The People You Know, Like and Trust! (Friends & Neighbors Real Estate) over 1 year ago

Mike & Eve this happens more often than the general public has any idea about.  Buyers should always have their own representation when buying a new build home - ALWAYS.

Posted by Anna Banana Kruchten,CRS,CRB,GRI, Arizona's Top Banana of Real Estate! (Phoenix Property Shoppe) 5 months ago

Mike & Eve, you are so right. It is never wise to go into a real estate deal without representation. It will cost you. Good stuff. 

Posted by Mike Cooper, Your Winchester, VA Real Estate Sales Pro (Cornerstone Business Group Inc) 5 months ago

It is important to have someone to review the contract. Whether it is a lawyer or broker or a third party.  Most people do not understand the contact well to often misunderstand the contract.

S.

Posted by Sam Shueh, mba, cdpe, reopro, pe ( (408) 425-1601) 5 months ago

People should understand builder rep works FOR BUILDER and upgrades are offered at RETAIL and buyer's agent is FREE!

Posted by Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC, ... a small office, delivering big service! (Waters Realty of Brevard, LLC) 5 months ago

I missed this the first time around, unforunately, and the video is not avaialbe. But there is plenty of important information for any buyer considering a new build regarding the value a qualified buyer agent will bring!

Posted by Jeff Dowler, The Southern California Relocation Dude - Carlsbad (Solutions Real Estate ) 5 months ago

Jeff Dowler , Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC 

It was Lennar...or course they made the video disappear.

Eve

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) 5 months ago

Good evening Mike & Eve Alexander ,

Excellent post..congratulations on the well deserved featured post! What a powerful news clip!

Posted by Dorie Dillard, Serving Buyers & Sellers in NW Austin Real Estate (Coldwell Banker United Realtors® ~ 512.346.1799) 5 months ago

You have brought up a very important subject. This type of thing is going on everywhere, everyday. Glad you are watching out for your clients. 

Posted by JoAnn Moore, Home Loans in Delaware (The Mortgage Market of Delaware) 5 months ago

Perfectly stated. Too bad the video vanished, but you are 100% correct. A buyer's representative will SAVE the buyer money as we know what incentives to include and how to decipher and structure the contract.

Posted by Pat Starnes, Brandon, MS, Broker Associate, ABR, 601-278-4513 (Front Gate Real Estate) 5 months ago

I must agree 200% with your advice here. I worked for a national builder with a name that starts with L and they were unscrupulous with 100+ page contracts and add-on fees. Needless to say, I did not stay long with them; a very unpleasant experience.

Posted by Sandy Padula and Norm Padula, JD, GRI NMLS#1483386, Presence, Persistence & Perseverance (Realty One Group) 5 months ago

Good recipe about how to lose money Mike and Eve. And great suggestions on 'what-to-do' not to lose it. I've explained that many times to as many people as I could.

Posted by Richard Bazinet /MBA, CRS, ABR, Phoenix Scottsdale Real Estate (AZuRE Team - Realty ONE Group) 5 months ago

Good morning Mike and Eve. This is so sad but very very true. Some people just think they know better. Too bad.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) 5 months ago

Excellent post and why every buyer should have their own agent representing them.

Posted by Nick & Trudy Vandekar, 610-203-4543, Tredyffrin Easttown Realtors, Philly Main Line (Long & Foster Real Estate Inc 610-225-7400) 5 months ago

Your blog title intrigued me, so I had to read what happened. Wow! Yes, a proven example that good real estate agents are needed.

Posted by April Swenson, CRS and Managing Broker - Ocean Shores Real Estate (Coldwell Banker Ocean Shores Brokers) 5 months ago

Lennar is one of the more shaddy and underhanded builders.  One of their newest "tricks" is to provide solar panels.  They market that solar is included in the sale.  The hidden agenda is that it comes with a 20 year lease ... at an additional cost.  The sales people don't tell buyers that.  They find out later in the game.  People need a buyers agent ... but not just any buyers agent ... one that will read the documents and truly represent their clients. So glad to see this FEATURED! 

Posted by Kathleen Daniels, San Jose Homes for Sale - Probate Broker (KD Realty - 408.972.1822) 5 months ago

Good afternoon, Mike & Eve Alexander (Eve).... I have always been a listing agent and my niche was new construction.... if a buyer came on-site without a buyer's agent by his/her side, I assure you, there was no negotiating if the buyer wanted to reserve a lot and/or buy a spec home....my job as the builder's listing agent was to sell extras, and I sold them... even if I knew there would be NO resale value for them in the future... we rarely had any issues with the builder I represented, but if there were, the builder won!!! always.... 

and the buyers who did not want a buyer's agent knew in writing and verbally that I represented the builder....they thought it was to their advantage to just go through me....they paid top dollar and bought items that had no resale value but large profit margin for the builder....

Buyers, have a well-versed buyer's agent by your side with any purchase, especially new construction....and the buyer's agent of choice in the Orlando Florida area would be Mike and Eve Alexander..... they guide well.

Posted by Barbara Todaro, "Franklin MA Homes" (RE/MAX Executive Realty ) 5 months ago

The last new home contract I was involved with was 73 pages.  Good lord.  At least 20 of the pages said the same things in a different way (yes, I will occupy the house, no I won't go to the site without a hard hat, etc) .  The other 53 needed to be read and parts of them questioned.  But as one potential buyer lead told me last week in an email "I fail to see the value of an agent". 

Posted by Jeanne Gregory, The most important home I sell is YOURS! (RE/MAX Southwest) 5 months ago

Very good advice, the misconception that buying a new home will have less issues to deal with can definitely backfire.  Having an agent that knows how to navigate that type of purchase is a wise decision.

Posted by Morgan Evans, LICENSED REAL ESTATE SALESPERSON (Douglas Elliman Real Estate) 5 months ago

I like new construction and with lower re sale inventory it is a great opportunity to help people find the home that meets their needs.

Buyers often think they will get a home for less by not having a Buyer's Agent.

Builders contracts are loaded on the Builders side. The in house agent is looking out for the Builder.

Buyers should take heed of this message. You NEED an agent to represent you and make sure you are not taken down the primrose path.

Posted by John Wiley, Lee County, FL Real Estate GRI, SRES,SFR,PSA (Jones & Co. Realty) 5 months ago

Wow, quite the story. I really don't like working with the new construction--to the buyer it sounds so wonderful and romantic but in reality--home is never finished on time, many builders do cheap work and -- do not have the buyer's interest in mind.

Posted by Mary Hutchison, SRES, ABR, Specializing in Brookside, Waldo, Prairie Village (Better Homes and Gardens Real Estate-Kansas City Homes) 5 months ago

I have closed brand new homes with 62 different builders in the Boise area.  Each of them does things a little bit different.  Selling new construction is a totally different approach and many agents are clueless.  Most buyer's that I know that tried to save money going direct to an onsite builder rep paid more than they should have and got less (or no) represenation for it!

Posted by Jim Paulson, Owner,Broker (Progressive Realty (Boise Idaho) www.Progressive-Realty.info) 5 months ago

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