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Santa Clara New Home buyers beware of builder’s unethical sales practices!

by Alex Aung on June 22, 2010

in Santa Clara New Homes

Lately some of the big builders of Sunnyvale & Santa Clara new homes have been conducting very questionable sales practices either to avoid to shorten their inventory holding time. Such as not allowing the Santa Clara new homes buyers to have their own “independent home inspection” for the Buyer’s final walk through. With most builders trying to avoid whatever they can to avoid the delay in closing & shove down the building as fast as possible to consumer even if construction & corrections are not completed 100% for move in.

For one of this Sunnyvale & Santa Clara New Homes builders the situation is even more serious with the Builder’s  i.e Seller agents attempting to intentionally bypass the Buyer’s broker in order to negotiate the  earlier closing date etc directly with buyer, while denying the Buyer from having proper final walk through conducted by their own Licensed Home Inspector. To make a story short in this case  as a buyer’s agent – I have to confront the builder’s agent & call upon Realtor’s association’s legal hot line to consult for this unreasonable & unfair practice as a Buyer’s broker. Result: the builder eventually make an exception on my client’s unit & and allow our own home inspector to conduct final walk through inspection.

Though, my clients had already done visual inspection twice for his New homes in Santa Clara  without my (his Realtor) & the inspector presence, due to builder’s agents blockage earlier, upon the new inspection, as I’ve expected, our professional home inspector has found several  issues with the home. First, central A/C unit completely failed to work , there was serious water leaking into basement from side retaining walls, there was also damaged or improperly installed washer dryer hook up & unfinished exposed stucco walls etc .

The inspector’s findings were disappointing because this inspection was actually done 2 days later than builder’s intended closing date, where builder was previously pushing so hard on my client to close or even threatening with per day late closing penalty charges on us. At this stage, this home really should be in , move in ready condition with builder’s own inspector completing & passing the inspection check list. Major items such as inoperative central A/C units should not be missed , if only they have care enough to do a proper job.

As most unsophisticated consumer will, one may think that nothing can go wrong since you are buying one of the new homes in Santa Clara , Right? Unfortunately, there are a lot of common things that can go wrong in new homes & your dedicated Buyer broker shall assertively takes initiative to protect your rights & most importantly protect your investment. For my clients it was a happy ending at the end because we get done with what we needed & all issues were taken care before closing without us paying a penny on late penalty etc. But as a consumer advocate Real estate broker, I wonder how will many of other consumers who walked into the builder’s sales office without their own buyer agent defend themselves? In fact, it makes me think, “if consumer do not know their rights then it’s same as they do not have one”.

Here are the some basic points that buyers of Sunnyvale / Santa Clara new homes must remember when dealing with new home builders & their agents:

Builder’s agent do NOT represent you or your interest. Ensure that you have an experience & caring buyer agent of your own who can protect you from builder’s 1 sided contracts & questionable sales practices. Try not to have direct contact with builder’s agent . ( The way builder agent ask questions & communicate, you might not even aware that they are in fact negotiating some of the terms with you, e,g be it a closing date or what items to repair etc)

Always conduct your own independent home inspection before closing of escrow by licensed , experience Home inspector professional & by your Realtor.

If any time during transaction if you don’t feel comfortable talking with builder’s agent or answering their question, state clearly to them that you prefer they talk to you through your buyer’s agent so you buyer agent can properly protect your right through out the transactions. Just because it is new home builder there is no excuse, Builder’s agent are obligated & bind to follow Realtor’s code of ethic article 16 & upon your request , they must communicate you through your buyer agent, as not to take advantage of less experience & knowledgeable consumer .

Remember that , home warranty plan provided by builders should not be an excuse for builder to deliver you an incomplete or defective home in the 1st place. Insist on all repairs, replacement etc are completed 100% before the close of escrow, since builder is more inclined to entertain your request more seriously & promptly before closing & funding . Of course builders like to do repair etc while you are paying the mortgage & taxes. Why not right? It is the same as free borrowed money for them.

Do not just stick to what builder’s lender offer. Always ask your Buyer Broker (agent) to help find you a better mortgage deal. In my client case e.g , one major builder’s lender offered my client their so called unbeatable rate at that time @ 6.5% for 5 years fix , where I managed to help my client get the same rate  with more secure 30yr fix loan while our own lending partner paying more than $5000.00 as buyer closing cost helps towards my buyer client’s closing.

Before start shopping on your Santa Clara new homes /  new homes in Santa Clara or any other  Bay Area new homes, be sure to request & read FREE report on : 6 Secrets Every New Home Buyer Must Know & Builders do not want to talk about.

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