Thursday, September 28, 2006
Beware of home builders that discourage buyer's agent
Here's a column about builders to avoid ... Why would builder jeopardize sale in a down market? Thursday, September 28, 2006 By Ilyce R. Glink Inman News QUESTION: I saw an article in the newspaper about a subdivision near where I live in Southern California, so I stopped in to view a model home. The builder's sales representative informed me that because I didn't have a Realtor at the time of the first visit, even if I were to come back to pursue a potential purchase with a buyer's agent, my agent would not be entitled to any commission. Is this true or is it a ploy to discourage buyer representation? How can I be denied fair representation or have to pay for it myself when it was a builder's model home that's open to the public? ANSWER: I hate when builders do this. They're trying to save the commission they'd pay to a buyer's agent. Or, perhaps the builder's representative you spoke with gets a bonus if she brings in a buyer without paying a commission to another agent. The builder is giving you fair warning, as required by the law, that you're now considered "unrepresented" and they'll never recognize your representation. But that's not necessarily the final word. More on that in a moment. The builder is trying to save a buck, but all the company is doing is discouraging qualified buyers from coming back. It's a lousy way of doing business in a time when builders around the country are desperate to get buyers through the door. And, it really leaves a bad taste in my mouth. But just because the representative says that's how the builder will treat you and your buyer's agent doesn't mean that's how it will be by the time the contract is signed. Here's what you do: If you decide to go back to see this development again, hire an agent first. Then, don't turn up without your agent in tow. If the salesperson gives you a hard time, push back. Inform the builder's representative that you're going to make an offer but only with your agent. If that's unacceptable to the builder, you'll take your business elsewhere. Then, walk out the door. Most builders won't let you get too far before they call you back. As I say, some builders are in fairly desperate straits right now. That may put you in the driver's seat. Q: How important is the loan servicing agreement? What happens if the buyer doesn't sign it?A: The servicing agreement you're referring to is part of a package of disclosures that a lender gives to a buyer for his or her signature at a closing. This document tells a buyer that it is likely that the loan will be sold to an investor or another lender on the secondary mortgage market. It also describes the process that the lender will take in notifying the buyer of the transfer of the servicing rights to the loan. When you buy a house and get financing, the lender may end up selling the loan to another bank or investor, or, in some cases, may sell the rights to service the loan (that is, to collect your monthly payments) to a company that specializes in loan servicing. As an owner, you'll want to know how to contact the lender that is servicing your loan and need to know where to send the monthly mortgage payments. Signing the disclosure means you understand that it is likely that your loan will be sold and that you understand how you'll be notified of this change. What I don't understand is why you'd object to signing the servicing agreement form. In some cases, the lender may refuse to give you the loan if you fail to sign the disclosures and documents that it requests at the closing. Unless the document is somehow out of the norm or the document changes the economic terms of the loan, there shouldn't be any reason not to sign it. In some cases, some lenders have inserted documents into a loan package that are out of the norm for a closing, such as a requirement for you to obtain mortgage credit insurance as a condition for closing on the loan. If you get a document like that, you can refuse to sign it. But a loan servicing agreement is fairly standard and I'd sign it. Contact Ilyce through her Web site, www.thinkglink.com. Labels: Corona, Foreclosure, Home Prices, Inland Empire, Loan Modification, Moreno Valley, Murrieta, Real Estate, Riverside, Short Sales, Statistics, Temecula
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