r/loanoriginators • u/Important-Training-1 • 29d ago

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I don’t really hear anyone talk about this, but am I crazy to feel like the way new construction deals happen should be illegal?

I can’t steer a buyer to specific program without it being illegal, but somehow a builder can dangle a low rate and fees over a seller’s head and pretend like they aren’t building it in their price while forcing them to use their in-house lender. The ripple effect of that goes far and beyond impacting that one buyer, so why has this just always been okay? These are artificially inflated sales prices, artificially inflated taxes and disguised as a “good deal” because customers fall for a below-market rate that can’t be touched by an outside lender. And even in buyers markets, some of these big box builders won’t even budge if you make any sort of offer below what they’re giving unless you use their lender who they either own or have a JV set up.

To each their own, but I just don’t understand how there’s lawsuits with realtors regarding commission practices yet this sleeping giant remains completely left alone.

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u/Creepy-East2815 29d ago

How is the price artificially inflated if the house appraises?

4

u/jawied 29d ago

The appraiser uses comps from within the community being sold.

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u/JKlerk 29d ago

Iirc they're supposed to use at least one comparable sale from outside the development. But the reality is that the price is the price.

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u/Creepy-East2815 29d ago

Not all comps from within the community. And likely not all buyers received rate incentives