Calgarypuck Forums - The Unofficial Calgary Flames Fan Community - View Single Post

krazycanuck · 01-09-2020, 06:46 PM

I do sales in a showhome (in Edmonton), so perhaps could help a little on the builder perspective on a few things!

First, if you haven't done it yet...get a mortgage pre-approval first. Before you ever step into a showhome or call a realtor, get your mortgage pre-approval setup. You don't even need to use that bank when the time comes, but have it done and ready to use. Even if you're positive that everything is in place and your income is great, credit is perfect etc...call the bank or broker first. I have seen so many weird issues with bad credit reporting, double hits of debt popping up and income verification failing. Better to have it done before you find your home and waste all that time if something needs corrected. Mortgage approvals can still blow up when sent for final approval, but it's less common.

For Realtors, some builders will not pay them unless they are with you on the very first visit, which is the official rule of thumb. However there is some flexibility there, if you haven't signed a registration card you're probably safe to bring a realtor in after that initial visit. Realtors make a good chunk of change off you, don't feel bad about calling them to go into a showhome with you last minute...it might save everyone a lot of hassle down the road and the realtor won't mind!

My personal rule, if you've been in my showhome before and you're coming into sign a contract and suddenly a realtor walks in with you after you never mentioned one over the past days/weeks/months we have been talking...they are not getting paid a commission. They are welcome to be there, but they're now working pro bono for you!

If I know you're selling your home, I'll usually ask if you're working with a realtor for a purchase as well, but builders are not required to ask, and many will not. It's best to be up front if you have a realtor and they are not there with you!

Also, if you don't want to use a realtor for a new home purchase, but have been using a realtor to look at resale homes...make sure you haven't signed an exclusive buyers agreement with that realtor before you shop without them and make a purchase on a home. Although most realtors wouldn't do it, they can technically ask for the buyers commission on that home you just bought, out of your own pocket. It does happen.

The asking price or promotional price of a home will not and cannot change if you have a realtor there with you acting as representation. However, some builders I have worked for do calculate that realtor commission into the margin when looking at a proposed discount on a buyer offer. Some builders factor that commission out of a marketing budget, so don't factor it in on an offer. Every builder is different.

Some builders inflate their prices so they can claim giant discounts, ignore the noise of that and focus on the bottom line price when comparing homes not the "$80,000 off" claims, which are all bogus. The best deals I see customers get is when the developer has lot promotions offering certain lots or phases at discounted prices. Then you can get a deal from both the builder and the developer which both have their own margins. Ask someone in the showhome and they can tell you if anything like that is happening, most representatives in the showhomes have knowledge on any community that they build in and would know of any lot promos happening around the city if you haven't settled on one community.

I have some homes that I know I cannot take a dime less than asking price, I have some homes that I know could be had for less, particularly standing inventory. However, there is no harm in asking to make an offer on anything. Especially during slower times of the year. The only risk you take currently on an offer, is someone else can come along and scoop that spec home or lot that you wanted out from under you. Be reasonable in your offer, the best deals I see are not where people go in and lowball, it's where they hit that sweet spot of "it's more than we want to give, but not enough to lose the customer over a counteroffer".

Don't buy blinds, landscaping, AC or appliances from the builder directly. All have massive markups on them and can be bought cheaper elsewhere. If possible ask for a store credit or discount on the purchase price on the included appliances and deal directly with the store (most builders do this anyways), you can then negotiate a better deal on the appliances you want with the store. Keep in mind, if you install your own appliances and something leaks and causes damage, warranty will not cover that!
Landscaping not only costs more, but builders always have a hard time getting it done in a reasonable time. You're better to hire your own company or do it yourself.

If you want to develop your basement but don't want the builder cost for it (some are reasonable, some are stupid) and don't have the cash leftover to do it, you can get a home + improvements mortgage from the bank. This will give you a mortgage for both the house you're buying and the cash required to develop the basement on your own or with the help of a contractor at a better rate.

Happy to answer any questions in Pm's if anyone has anything they want to know.

01-09-2020, 06:46 PM	#59
krazycanuck Won the Worst Son Ever Award Join Date: Oct 2006 Location: Sherwood Park Exp:	I do sales in a showhome (in Edmonton), so perhaps could help a little on the builder perspective on a few things! First, if you haven't done it yet...get a mortgage pre-approval first. Before you ever step into a showhome or call a realtor, get your mortgage pre-approval setup. You don't even need to use that bank when the time comes, but have it done and ready to use. Even if you're positive that everything is in place and your income is great, credit is perfect etc...call the bank or broker first. I have seen so many weird issues with bad credit reporting, double hits of debt popping up and income verification failing. Better to have it done before you find your home and waste all that time if something needs corrected. Mortgage approvals can still blow up when sent for final approval, but it's less common. For Realtors, some builders will not pay them unless they are with you on the very first visit, which is the official rule of thumb. However there is some flexibility there, if you haven't signed a registration card you're probably safe to bring a realtor in after that initial visit. Realtors make a good chunk of change off you, don't feel bad about calling them to go into a showhome with you last minute...it might save everyone a lot of hassle down the road and the realtor won't mind! My personal rule, if you've been in my showhome before and you're coming into sign a contract and suddenly a realtor walks in with you after you never mentioned one over the past days/weeks/months we have been talking...they are not getting paid a commission. They are welcome to be there, but they're now working pro bono for you! If I know you're selling your home, I'll usually ask if you're working with a realtor for a purchase as well, but builders are not required to ask, and many will not. It's best to be up front if you have a realtor and they are not there with you! Also, if you don't want to use a realtor for a new home purchase, but have been using a realtor to look at resale homes...make sure you haven't signed an exclusive buyers agreement with that realtor before you shop without them and make a purchase on a home. Although most realtors wouldn't do it, they can technically ask for the buyers commission on that home you just bought, out of your own pocket. It does happen. The asking price or promotional price of a home will not and cannot change if you have a realtor there with you acting as representation. However, some builders I have worked for do calculate that realtor commission into the margin when looking at a proposed discount on a buyer offer. Some builders factor that commission out of a marketing budget, so don't factor it in on an offer. Every builder is different. Some builders inflate their prices so they can claim giant discounts, ignore the noise of that and focus on the bottom line price when comparing homes not the "$80,000 off" claims, which are all bogus. The best deals I see customers get is when the developer has lot promotions offering certain lots or phases at discounted prices. Then you can get a deal from both the builder and the developer which both have their own margins. Ask someone in the showhome and they can tell you if anything like that is happening, most representatives in the showhomes have knowledge on any community that they build in and would know of any lot promos happening around the city if you haven't settled on one community. I have some homes that I know I cannot take a dime less than asking price, I have some homes that I know could be had for less, particularly standing inventory. However, there is no harm in asking to make an offer on anything. Especially during slower times of the year. The only risk you take currently on an offer, is someone else can come along and scoop that spec home or lot that you wanted out from under you. Be reasonable in your offer, the best deals I see are not where people go in and lowball, it's where they hit that sweet spot of "it's more than we want to give, but not enough to lose the customer over a counteroffer". Don't buy blinds, landscaping, AC or appliances from the builder directly. All have massive markups on them and can be bought cheaper elsewhere. If possible ask for a store credit or discount on the purchase price on the included appliances and deal directly with the store (most builders do this anyways), you can then negotiate a better deal on the appliances you want with the store. Keep in mind, if you install your own appliances and something leaks and causes damage, warranty will not cover that! Landscaping not only costs more, but builders always have a hard time getting it done in a reasonable time. You're better to hire your own company or do it yourself. If you want to develop your basement but don't want the builder cost for it (some are reasonable, some are stupid) and don't have the cash leftover to do it, you can get a home + improvements mortgage from the bank. This will give you a mortgage for both the house you're buying and the cash required to develop the basement on your own or with the help of a contractor at a better rate. Happy to answer any questions in Pm's if anyone has anything they want to know.