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My wife and I are prequalified for a mortgage based on our income.
Today we went to the sales office to pick out the structural options, landscaping etc;
We are preapproved with 10% down but the sales agent is asking us to bring 15% with us when we sign the contract. This has raised a huge red flag with both my wife and myself. We feel that the extra 5% they are suggesting we put down would best be served sitting in our bank earning us intrest not the builder.
We are not going to put more than the 10% down that we are approved for.
Does this sound like normal business practice?
Sounds like they want the extra 5% to apply toward your extras...which you haven't selected yet.
The builders agent works for builder -only. No matter how friendly the builders rep is or how engaging, their sole duty is to get as much $$ out of you as they can during the sales process. They do not represent you. I know this sounds harsh, but it is true. Also, the sales contract you sign is 100% builder oriented. Take it to an attorney to review.
I work with builders (representing the buyer's side now - years ago the builders side) and you need to be careful. Nothing wrong with a new house. But the contract reads differently than the builders rep will tell you. I have seen the builders rep say, for example, $X toward your closing costs and never telling you that the builder has pushed over $Y of their costs to your side and you only get a small amount to apply to your actual closing costs. Happens all the time. This is one example. There are many. Have a good real estate attorney review the builders contract in full before you sign anything and you will be in much better shape.