Aaron Mtuanwi, INSPIRED TO SERVE Atlanta, GA [Metro Atlanta Area] (LBBM Brokers, Inc)

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Rainmaker
5,095,861
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Most builders do that. I don't find it disturbing at all. No one forces a buyer to use them. It's an incentive and sometimes it's worth it and sometimes it's not. But as the lender pays for those costs,... there's nothing stopping other lenders from doing so if they wish to.

Oct 13, 2016 05:20 PM
Rainmaker
4,319,419
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Aaron Mtuanwi - I think this is universal! Be it a small builder or big one!

Oct 13, 2016 03:23 PM
Rainmaker
613,494
Eve Alexander
Buyers Broker of Florida - Tampa, FL
Exclusively Representing ONLY Tampa Home Buyers

I am with Fred Griffin on this one. Which is why the builder will give in when you mention RESPA...I negotiate new construction fees most of the time. The problem is that agents all think that the builder is somone special who can do whatever they want, so they don't buck the system. 

I hate the controlled business arrangement thing because it is never good for my client.

Sure, they offer a perk to keep everything in house , and then jack the buyers cost up. Crunch the numbers. 

Speak up...you may be surprised at what you can change.  I work only for the buyer, so too bad if the builder does not like me bucking the system, that only means I am doing a good job for my client.

Eve

 

Oct 14, 2016 03:50 AM
Ambassador
6,348,779
Bob Crane
Woodland Management Service / Woodland Real Estate, KW Diversified - Stevens Point, WI
Forestland Experts! 715-204-9671

Perhaps it is time for an investigation, but more likely the builder just prefers that people use these lenders because they have proven that they can get the loans done on time.

Oct 13, 2016 02:30 PM
Ambassador
2,678,589
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

If they push it too far, they will catch it from the CFPB for RESPA violations.

Oct 13, 2016 12:59 PM
Rainmaker
7,784,714
Roy Kelley
Retired - Gaithersburg, MD

This is not confined to the Atlanta area.

Oct 14, 2016 02:19 AM
Ambassador
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Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Prop. Mgr, Wenatchee, WA

It does seem unfair but you've read many comments justifying it.  In reality, It is only disturbing to those not in the "in-crowd".  You have to create your own "preferred status" group.  

By-the-way Aaron Mtuanwi , I really like your bio.  You've identified some compelling reasons for people to ask you for advice.  Use that!  

Oct 14, 2016 12:08 AM
Rainmaker
3,071,489
Tony and Suzanne Marriott, Associate Brokers
Serving the Greater Phoenix and Scottsdale Metropolitan Area - Scottsdale, AZ
Haven Express @ Keller Williams Arizona Realty

Nina Hollander nailed this one!

Oct 13, 2016 11:53 PM
Rainmaker
1,466,207
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Aaron Mtuanwi This is not something new. The buyers always have a choice.

Oct 13, 2016 11:42 PM
Rainmaker
986,552
Jennifer Mackay
Counts Real Estate Group, Inc. - Panama City, FL
Your Bay County Florida Realtor 850.774.6582

Not uncommon in my area - preferred is often associated with getting the job done on time and quickly

Oct 13, 2016 11:20 PM
Rainmaker
4,969,239
Dorie Dillard Austin TX
Coldwell Banker Realty ~ 512.750.6899 - Austin, TX
NW Austin ~ Canyon Creek and Spicewood/Balcones

This is nothing new..small or large builders have an affiliation with certain lenders and title companies.

Oct 13, 2016 10:44 PM
Rainmaker
152,561
Chrissi Chapman Topoleski
Coldwell Banker Realty - Woodbridge, VA
Helping agents live an exceptional life!

This does happen in our area. I have found that the preferred lenders work their tails off though to keep the builder happy. That's an account they don't want to lose. I have been able to get people the closing costs using a different lender in credit situations where the preferred lender doesn't have a program they qualify for, but another one does.

Oct 13, 2016 10:41 PM
Rainmaker
1,617,866
Harry F. D'Elia III
WEDO Real Estate and Beyond, LLC - Phoenix, AZ
Investor , Mentor, GRI, Radio, CIPS, REOs, ABR

That is normal in the building business

Oct 13, 2016 10:33 PM
Rainmaker
5,188,610
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Big builders have figured out there is money in financing! Happens all over!

Oct 13, 2016 10:30 PM
Rainmaker
921,404
Annette Lawrence , Palm Harbor, FL 727-420-4041
ReMax Realtec Group - Palm Harbor, FL
Making FLORIDA Real Estate EZ

This is a great strategy for the builders.

Too many lenders are quirky regarding new construction. Rather than be hassled by Well Fargo and Bank of America, the builder provides a solution that is beneficial and efficient for the buyer and builder and eliminates 90% of the squirliness of traditional lending for new construction.

Being a solutions provider is better than having a good fire department to put out fires when prevention is the solution. 

Agents should take this page from the builders play book and have a Plan B lender who is able to close in 7 day ready when the buyers lender goes wonky. Otherwise  we allow the seller, who hired us to keep them from making harmful decision, will be harmed by those big lenders a buyer chooses.

Oct 13, 2016 10:27 PM
Rainmaker
4,550,551
Michael Jacobs
Pasadena, CA
Pasadena And Southern California 818.516.4393

Not forced but certainly incentives are often offered for using a preferred lender by some builders.   

Oct 13, 2016 10:15 PM
Rainmaker
908,118
Jeff Pearl
RE/MAX Distinctive / LIC in VA - Lovettsville, VA
Full Service Full Time Realtor

That's common with builders. One reason is, it helps them avoid appraisal problems. Buyers can always refi later, or in many cases, the loans are sold and/or serviced by someone else later. Agenst also have preferred lenders. I've seen builders offer free lofts and finished basements as incentives to make a sale. Buyers should take advantage of incentives. I don't see it as disturbing.

Oct 13, 2016 10:11 PM
Rainmaker
1,722,326
Sandy Padula & Norm Padula, JD, GRI
HomeSmart Realty West & Florida Realty Investments - , CA
Presence, Persistence & Perseverance

It does happen and consumers do have the choice to chose if they want their closing costs absorbed.  Is it a RESPA violation? No, since in most cases, the builders end up paying the closing costs, not the lenders.

Oct 13, 2016 10:02 PM
Rainmaker
5,583,167
Barbara Todaro
RE/MAX Executive Realty - Happily Retired - Franklin, MA
Previously Affiliated with The Todaro Team

no it doesn't happen....but all builders like to have the buyers use the institution that has the builders loan for the infrastructure and home construction.... much of it is related to the appraisal end of the transaction!

Oct 13, 2016 09:52 PM
Rainmaker
444,170
Dianne Goode
Raleigh Cary Realty - Raleigh, NC
Realtor/Broker

This has been standard practice in my area since I started in real estate almost 20 years ago.  If I were Dictator of the Universe, I wouldn't allow it -- but what can you do?  I've only had one couple opt to use their own lender instead of getting the cc.

Oct 13, 2016 09:39 PM
Rainmaker
1,839,276
Lyn Sims
Schaumburg, IL
Real Estate Broker Retired

Welcome to the club & it has been that way across the entire US for 30+ years that I've been doing it.  You either play their way or get no credits - that's the way it is.

Oct 13, 2016 09:35 PM
Rainer
213,263
Dennis Swartz
Full Circle Property Management - Columbus, OH
MBA, GRI...experience counts!

Its the same everywhere- Builders can control that and many are financially involved.

Oct 13, 2016 07:48 PM
Rainmaker
5,772,353
Ron and Alexandra Seigel
Napa Consultants - Carpinteria, CA
Luxury Real Estate Branding, Marketing & Strategy

Aaron,

Sounds like they may be pushing the envelope like Fred Griffin stated.  A

Oct 13, 2016 02:14 PM
Rainmaker
4,895,624
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Builders push that here also.

 

Oct 17, 2016 05:31 AM
Rainmaker
4,800,082
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

This has been the case for as long as I've been in real estate.

Oct 16, 2016 04:11 AM
Rainmaker
5,847,468
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

We see that at several builders around here too, common practice.

Oct 15, 2016 07:49 AM
Rainmaker
760,033
Tony Lewis
Summit Real Estate Group - Valencia, CA
Summit Real Estate Group Valencia & Aliso Viejo

Almost all new home builders in our area have a preferred lender and offer incentive based upon using that lender.  One must wonder why this is allowed by Respa but it is.

Oct 14, 2016 05:06 PM
Rainmaker
1,497,698
Ryan Huggins - Thousand Oaks, CA
https://HugginsHomes.com - Thousand Oaks, CA
Residential Real Estate and Investment Properties

I've not seen this out here, but I don't have much new construction to deal with.  So long as the buyer isn't forced, there is no law being broken.  It is common on listings out here for the sellers to require all buyers to qualify with a preferred lender (at no obligation).

Oct 14, 2016 07:53 AM
Ambassador
3,338,449
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate Services

That happens everywhere. The lending bait is alive and  well ... 

Oct 14, 2016 01:40 AM
Rainmaker
318,802
Monique Combs
Royal Shell Real Estate - Bonita Springs, FL
Royal Shell Real Estate - Monique Combs

I see it Maryland and Florida. I believe they use a preferred lender for a couple of things. 1. They are confident that the lender will do his or her job properly. 2. The lender will determine if the Buyer can really obtain a loan. If the builder is building a home specific for a buyer and they actually don't qualify, the builder is taking  a big risk. If they buyer doesnt like the incentive, find another lender that will provide the same. 

Oct 14, 2016 01:18 AM
Rainer
232,019
Jessie Cochran
Counts Real Estate Group, Inc. - Panama City, FL
Panama City Realty Group

This is not an uncommon practise IMO

Oct 13, 2016 11:32 PM
Rainmaker
2,775,046
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Not uncommon for a builder to work with specifics....

Oct 13, 2016 11:23 PM
Rainmaker
3,415,644
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Yes it happens here as well

Oct 13, 2016 10:52 PM
Rainmaker
4,847,665
Richard Weeks
Dallas, TX
REALTOR®, Broker

Sure, many builders have relations with lenders.

Oct 13, 2016 10:02 PM
Rainmaker
755,555
Peter Testa
Nationwide Homes - Danbury, CT
PETER TESTA

It sounds like you are on to something here. 

Oct 13, 2016 10:00 PM
Rainmaker
823,379
Susan Laxson CRS
Palm Properties - La Quinta, CA
Realtor in San Diego, CA & Naples, FL

Yes, strongly encouraged and many times must complete an application, even when the buyers say they already have a lender.

Oct 13, 2016 09:51 PM
Rainmaker
4,434,127
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Some builders require the buyer to get pre qualified by their lender.

Oct 13, 2016 09:28 PM
Rainmaker
2,165,864
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

We have a large builder who has done this

Oct 13, 2016 09:14 PM
Rainmaker
1,618,781
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

Some sellers do prefer working with their lenders ( offering some perks to it) but it is not absolutely required in here. 

Oct 13, 2016 04:54 PM
Rainmaker
4,420,563
Endre Barath, Jr.
Berkshire Hathaway HomeServices California Properties - Beverly Hills, CA
Realtor - Los Angeles Home Sales 310.486.1002

Often builders have massive loans from a certain lender and by forcing the buyer to  use the same lender they reap benefits...it is not just in your market it is a Nationwide issue, Endre

Oct 13, 2016 03:00 PM
Rainmaker
1,236,920
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Just about every town in America. Even on used residential homes often there is a preferred lender. Not obligated to use them but the lender can tell the agent how strong the buyer is. The listing agent does not like to work with out of the area loan agent due to reputation and their inability to deliver funds on time.

Oct 13, 2016 02:41 PM
Rainmaker
3,988,007
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

I have seen it happen in the past but not now. The builders do direct business to their closing attorneys and will counter the offer to make sure it happens. I don't like that part.

Oct 13, 2016 01:30 PM
Rainmaker
2,349,535
Lise Howe
Keller Williams Capital Properties - Washington, DC
Assoc. Broker in DC, MD, VA and attorney in DC

yes that happens all the time here

Oct 13, 2016 01:24 PM