New construction, yes. We are seeing a lot of people interested in buying new construction homes. So what I mean by that is not like they want to build it from scratch. I've covered in a lot of my videos I do not do construction loans. I do not pretend to do construction loans. If you want to buy a piece of land and build a house on it, I am the worst lender because I don't do it. Okay, but new construction I do. I do do and what I mean by that is like a subdivision. So maybe it's a KB Homes or on, you know, any of the builders. Toll Brothers, there's hundreds of builders across the country that do really beautiful subdivisions. So we see a lot of it in Texas and California are the two states where I see most of the new builder buyers coming from, and it's something that I always talk to them about is hey look, you know, like I love that you love me and I want to work with you and I think you're awesome, too. And yes, my rates are smoking and we're going to take good care of you, but you always want to know if the builder will give you an incentive to use their lender. And it's a double-edged sword. So it's not like if the builder says hey, I'll give you 5k to use my lender, but that's necessarily going to be a better deal. Sometimes it is. Sometimes it isn't.
So if you're looking at new construction and you're going, "Oh, I'm just going to work with the preferred lender," guys, you want a second opinion. You really want a second opinion, and here's why it's a coin toss. So we'll end up with a client where, you know, maybe they're looking at non-new builds and then they go to a new build and they're like, "Oh, but Jen, they're offering us five grand," and I'm like, "Well, that's a lot of money. Let me see what they're charging you to do the loan and what their interest rate is, and let's see if it's a real five grand because sometimes we'll get the loan estimate and the lender's fees are five grand, and we're like, well, if the lender's just charging you more and then getting a credit for it, you're not really saving money."
So you really want to make sure where if you are looking at a new build and they are incentivizing you, aka bribing you to use their lender, you want to make sure that you're actually getting true value from it. So I always tell people, like, send it to me; I'll tell you if I can beat it. If I can't, I'm like, I'll tell you. And if they're like, "Oh, but you've worked on it. We feel don't feel bad, guys. It's money. It's money. I get it. If someone was gonna give me five grand to use a different lender and that lender could offer me the same deal on rate and I was really getting five grand, I'm gonna go with the five grand, too. My sister's a lender. I would dump Sarah so quick to get that money, and she would do the same thing to me, Sarah. Anyways, um, so you want to know if it's real though because sometimes these offers are not legit.
The other thing is you want to ask the builder, hey, um, if I use my own lender, can I still have money towards a closing cost credit? Because a lot of times they'll say yes. Um, one way that builders—the thing with the subdivision is they never want the purchase price to go down because if they sell, let's say they have a hundred house A's, a hundred house B's, and a hundred house C's—one hundred two hundred three hundred thousand. Well, if house C sells for 250, well, that just affected the value of all the other C's, all the B's, and all the A's; it just lowered the values. However, if house C sells for 300,000, but you get a design credit for 10,000, they give you 5,000 to use their lender, you know, and upgrade to this and upgrade to that, they can work you down to that number that you want, that 250, by giving you an incentive, right, but their purchase price is still at 300. So it's a way where builders are able to keep the purchase prices high is by giving you all these incentives. So whenever a builder's like, "Oh, if you sign today, we'll give you fifty thousand dollars in incentives," I would be very, um, I'd be asking my realtor, and hopefully you have an independent one. I know a lot of people just go to the builder's office, they work with the builder realtor, but I would be asking my realtor like, "Hey, are these not selling?" Because if a new build is trying to give you 50k off if you sign a contract by xyz date, they need to sell. I mean, that's the thing. I—I have done a couple of these new home communities where I'm the preferred lender, and I can tell you right now they have deadlines, they have to meet, they have houses they have to sell, they do not want to drop that purchase price. But they will throw incentives because that's the way to get you hooked on the line. Um, while still maintaining that higher price so that hopefully they have better luck with all the other houses. So be very cognizant of that. Um, so definitely, you know, if you are looking at new home construction, talk to the preferred lenders, get a quote from them, see what the incentive is, and then compare it with an independent lender. Just make sure you're really getting a 5,000 credit or a ten thousand dollar credit. And if you are, I will be the first person to say, go get that money. So I hope this has been helpful. Questions, comments, as always. Let me know. Yes, I'm licensed in 45 states. 45. Um, so if you need a loan across the country, please reach out. Thanks so much for watching.
https://www.youtube.com/watch?v=n_x8ndzQvbo&list=WL&index=8
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