Home Buying in 20152>Question Details

crimson8888, Home Buyer in 20152

builder is asking for 5% from me for closing costs ($32k) for a spec house..is that too much for me buyer like me to pay for a $600 new property?

Asked by crimson8888, 20152 Tue Jan 28, 2014

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Matt Elliott’s answer
If you are referring to the deposit they are asking you to pay at the time of the contract, it's a typical request. Builders typically ask for anywhere from $10K - 10% of the sale price at the time of contract. In my experience in representing buyers, builders will work w/ you on the timing of that deposit, and might likely reduce it.

Like the others before me have stated, this is where it makes sense to have your own representation of a solid (professional) real estate agent. The builder has already priced our fees into the home; when you go in without an agent, you simply put more money into their pocket and miss out on good representation.

Best,

Matt Elliott
703.627.2167
0 votes Thank Flag Link Tue Jan 28, 2014
That sounds about right from my experience. You must keep in mind that Builder's contracts are written by the Builder's attorneys. You should not sign anything until you have your own attorney look at it. If something should happen that you can not buy the house your 32,000 is at risk. You should also be represented by a good real estate agent or you have no one representing you. The people in the Builder's office are representing the builder. Remember, VA is a "Buyer Beware" state. You have a right to have inspections done throughout the process. You need to get all options
in writing. Builder's write in their contract that they have a right to install similar options without the consent of the Buyer. Be careful. We are always available to talk about real estate! Please don't hesitate to contact us.

Ruth Neff, ASD, LDPD
Avery-Hess Realtors
Cell: 703-203-5936
Email: ruth@neff-team.com
Website: www. Neff-team.com
Licensed in VA
0 votes Thank Flag Link Tue Jan 28, 2014
I echo Misty's comments. Builders make their money on financing, not building houses. You should never buy new construction without competent representation. 5% is almost double what is normal.
0 votes Thank Flag Link Tue Jan 28, 2014
Crimson

I would strongly recommend you NEVER negotiate w a builder without an agent. You do not pay a commission so our services are free and the builder will not cut you a deal because you don't have an agent. And if the builder has an agent on site, that agent represents the builder.
But in response to your original question, why are you paying closing costs at all? Are you requesting 3% seller assist? Also builders will offer incentives if you use their title company, sometimes paying all of your closing costs.
Yes, that is a bit much for you to pay.
0 votes Thank Flag Link Tue Jan 28, 2014
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