Minneapolis, MN: Recent reports show homes builders are making record profits – but not from building homes! What then you ask? From providing the mortgage loans the “builder” give to people buying their homes!
Pulte Homes shows mortgage loan revenue up 70%, which is 6 times higher than their revenue from building homes. Home builder Lennar Homes shows mortgage revenue up 60%!
It is a well known fact that home buyers can get significantly better mortgage loans deals when NOT using the builders in house lender, but home buyers don’t seem to care because they are blindsided by the shinny new object (the home), and fall for the tall tails the builder throw at them – items like “no closing costs”, and “appliance allowance” that are already being paid for within the cost of the home itself. It is no “deal”.
Most new construction home buyers fail to ask, or even realize how the builder is able to give them these freebees… and that in most cases, you could still get those items AND get a better mortgage loan with someone else, if the buyers just had a little better negotiation skills and employed a “buyer agent” real estate agent instead of simply working with the builders agent.
Many people think the days of sleezy tactics, high pressure sales, and low balling customers on interest rates and closing costs are gone because of new regulation – and they are for the most part, unless you are working with a new construction builder, in which case, the government seems to be looking the other way.
No wonder builders are making a killing in the mortgage loan business!