If you remember one thing from this article, please remember this: The Colorado Real Estate Commission approved contract to buy and sell real estate is extremely slanted in favor of the buyer. Every builder’s contract is not in favor of the buyer.
Listen, I have nothing against builders. I like builders and have many good relationships with builders, but buyers need to beware of builder contracts. You see, a builder’s contract is not approved by the Real Estate Commission and is written to protect the builder, not the buyer. There’s nothing wrong with that, but if buyers are expecting the same contingencies and protections they would receive when they buy a re-sale home with an approved contract, they need to wake up.
The builders know that there is no inventory in the market. They are realizing each day that they are the only game in town and yes, they have buyers over a barrel. It means that they can ask for whatever they want, write it into their contract, and probably get buyers to go along with it. Builders have their own attorneys draw up their contracts from scratch, and again, it’s whatever the builder wants or demands.
I am always amazed by the number of consumers who scrutinize each and every purchase they make from a TV to a set of tires for their car. Yet, when they are going to make the single biggest purchase of their life, they go into a builder’s office without representation and then sign a contract they did not read. Understand that it does not cost you a dime to use a professional real estate agent in the purchase of your new construction home. Yes, I know that the builder has salespeople to help you, but they work for the builder… and not for your best interest. Also, please understand that the builder will not give you a discount on the purchase price of the home if you do not use a Realtor. When the builder structured their pricing for their new homes, they built the Realtor’s commission into the pricing plan. If you do not use a Realtor in the purchase of your new home, the builder just MAKES MORE MONEY.
Join me next week for part two of this series “Beware of Builder Contracts.”