Hi Charlie - The Construction to Perm loan has many advantages to the buyer as well as the seller. I would disagree with the previous answer given that many upscale homes are built C2P.. The tax savings at closing are quite large given that the buyer is paying only the unimproved portion of the property. The other advantage is if the builder were to fail financially, you still own the lot and the improvements. If you had your heart set on that property and were using only an end loan, you only recourse to recovery is your deposit, which hopefully the builder either escrowed it and was bonded.
As for the double closing costs mentioned, a good agent would make sure that you were only being charged once for closing and a smaller fee to convert the construction loan in to a permanent loan. Furthermore, closing costs and down payments for C2P are reasonable for those with good credit.
As a Realtor for over 20 years and selling over 4000 homes, new and resale; I have never seen a Construction loan that my buyers didn't like. Make sure you are dealing directly with the bank that originates the C2P, a reputable builder and an educated Realtor. You won't go wrong.