Buying a property from the builder is a good thing. You are buying a NEW HOUSE, with probably
10 year warranty. Also, pre construction homes you may get a discount on the price. Advantages its YOUR new home, and no one has lived there and left their troubles It is a clean slate. Your no closing cost is almost correct, you will need to pay taxes and insurance. Your mortgage will be slightly higher but not much as rates are in the low 4%. You have some money to buy your new furniture to go along with your new house.
When buying, your mortgage payment has to be comfortable becuase if its not then this kind purchase is not for you.
Disadvantages: After 1 year your taxes will adjust,will most likely increase.
These costs could be built in the price - no free lunch there...
Or, these costs will be so large that the property will be overpriced also.
It's harder to get financing when the property is overprised (the appraisal can come in at lesser value, and you'd need to either re-negotiate the price or pay the difference between appraisal and the price).
You would also be better off knowing that the contract does not deny you the rights that you
should have as a buyer (because it would be prepared by the developer's attorney and in the developer's interests).
There is a myth that the price will be reduced by the developer, if the buyer buys directly.
The developers can't shoot themselves in the foot and reduce the price for anybody (tiny reductions are possible, regardless if you are buying by yourself or with a selling agent). Often, developers play with the upgrades, but not the price.
So, it is best to buy with a pro who will know your overall situation and who will give you the best advice (and in your best interests).
Hope this helps,
Beachfront Realty, Inc.
I agree with Scott however if you are financing 70% of the property then if your closing costs are rolled into an increased purchase price then it's possible that you actually are effectively financing 70% of the closing costs reducing your cash input :)
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Please see my blog on getting a mortgage in todays market