For those who read this blog regularly you know that housing inventory is sparse. As mentioned a couple of weeks ago this scarcity of inventory can cause agents to compromise their ethics to get their clients into a home and builders or developers want to get more from each buyer due to demand. Some find excuses to add cost to a reasonable deal after the deal has been made.
Recently we caught wind of a Realtor who agreed to provide a lot at listed price to an out of town buyer. No negotiation just list price. The buyer verbally agreed to purchase the lot on his next visit and his agent asked the listing agent to reserve it.
After a weekend passed the listing agent called the buyer’s agent to inform him that the developer had incurred some type of cost when a previous buyer relinquished that lot. In fact, that developer should have been allowed to keep the original buyer’s earnest money and therefore would have no cost in taking the lot back but instead would have profited from that event. The buyer’s agent informed the buyer that the lot would now cost $2,000 more than originally offered and the buyer reluctantly agreed. Bad reputation for the developer whose integrity is now in question by the buyer, the buyer’s agent and those with whom they associate.
Fast forward now to the selection of the home and the written agreement that binds both parties. When the builder forwards plans to the buyer’s agent the garage is on the opposite side of the house than where it was offered. When the buyer objects to the flip flop the builder says it will be another $2,000 to put it where it was originally illustrated. This, aside from the fact that the buyer’s agent had informed the seller’s agent which side the garage was desired upon which just so happened to be where the original drawing had offered it.
It seems at times that some builders and developers faced with a brisk market after sitting for years on unsold inventory suddenly see an opportunity to maximize profits by changing the rules once a buyer is engaged. How short sighted is it to take advantage of low inventory and buyer competition by attempting to change the rules after the deal is struck?
Usually a home will see new owners every five to seven years as the inhabitants lives change and their families grow or shrink as children are born or leave the nest. How inclined are you to buy a lot from the same developer or hire the same builder if they change the rules the first time you deal with them?
Be careful out there. Sooner or later the market will turn and those same agents, builders and developers will be begging for your business as they were just a couple of years ago. Remember the Realtors’ credo; “If is is not in writing it did not happen.” Get the terms of your build in writing and make darn sure your Realtor enforces that written document. It is the only way to avoid becoming a victim in a competitive marketplace.
For developers, builders and their agents; we understand you must strike while the iron is hot. Just make sure your thumb is not between the hammer and the anvil.