Home Buying in Houston>Question Details

joannhuynh, Home Buyer in Santa Clara, CA

Do builders have the rights to set strict closing rules such as 12 day closing? or no contract until the loan is underwritten?

Asked by joannhuynh, Santa Clara, CA Fri Mar 15, 2013

My client was ready to sign a contract on an inventory home with a prequalified loan from BOA. However, we were told by the builder that they could not write a contract until my client has a underwritten loan (the loan has to be underwritten) by their preferred lender. We asked if their preferred lender's rate is not competitive could we go with another lender? They says yes but the closing has to be done within 12 days, which none of other lenders could do. In addition, lenders don't process loan without a signed contract. My client went ahead trying to get a loan through the builder's preferred lender; however, the provided rate is almost one point higher. While being back and forth with their preferred lender, the house is sold. We feel the builder has forced buyers to go with their preferred lender, who does not have competitive rate.

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6
Peter Dorsey’s answer
Be very suspicious of terms such as these. In a situation such as this, I would hire an attorney to be in contact with this builder. An attorney working on your behalf can flush out terms and conditions that are either illegal or not within the normal practice of the area.
0 votes Thank Flag Link Tue Mar 19, 2013
Something seems odd…

If your client was in contract with the builder to buy the house, how did they sell it to someone else?

If your client was pursuing a loan without actually being in contract to lock down the purchase, well, I guess that was a risk that did not pay off.
0 votes Thank Flag Link Sat Mar 16, 2013
Hi John, the builder refuses to write a contract with a pre-qualified loan. They require either the loan is underwritten or a 12-day closing for a contract to be written. Unfortunately, no lender would underwrite a loan without a contract, except their preferred lender.
Flag Sun Mar 17, 2013
Isabella makes a good point.....

If your realtor goes along with the builder on this.... THEY ARE WEAK.

Time to get a new realtor.
0 votes Thank Flag Link Fri Mar 15, 2013
The builder sets his rules and it precisely why a buyer needed representation. The salesperson that works in a model home represents the Builder(s). I sm a Buyers Agent and finding an experienced Realtor can level the playing field for a buyer!
0 votes Thank Flag Link Fri Mar 15, 2013
I guess that anything really does go in California. Best of luck.

Al Geffon
(713) 213-6350
al@geffon.net
Web Reference: http://www.har.com/algeffon
0 votes Thank Flag Link Fri Mar 15, 2013
Sounds like the builder is trying to get around the LAW that says they cannot force you to use a particular lender as a condition to buying their home.
Which, in my opinion is sleazy.
You should post the name of this scumbag builder/lender then tell them to %#$@ off.


Tom Burris
Mortgage Banker
http://www.servicefirstmckinney.com/
(214) 763-4629 cell/text/nights/weekends(Really!!)
tburris@servicefirstmtg.com
Lending all across the entire Great State of Texas!!
NMLS# 335055
Search Dallas area MLS for FREE. No registration => http://www.ntreisinnovia.net/cgi-ntr/BR_login?0501134
0 votes Thank Flag Link Fri Mar 15, 2013
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