Builder Fees with the NACA Program

[southflorida]

I received my closing disclosure and I was surprised that I need to bring to the table $15K more than I expected in Builder Fees, Impact Fees, Water and Sewer Hook Up fee. I was under the impression that the lender would pay for these fees under the NACA program.

What has been the experience of the members that have purchased New Construction with NACA?

[Pearl609]

@southflorida, I’m glad you received your CD… BUT and additional 15K?!?!? That doesn’t even seem reasonable!

My MC and CC never mentioned anything about builder’s fees. Did you ask your CC if some of that is covered by the lender?

[southflorida]

The lender indicated that they won’t cover those fees and that’s parts of the reason they gave me incentives. I am still trying to figure it out and NACA and the title company are kindly helping me.

You are doing new construction too. Right? Did you close already? Did you see any of these builder fees, impact fees, water and sewer meter hook up fees? If so, were these fees covered by the lender?

[Pearl609]

Oh wow, I hope they can figure that out for you… No I have not closed yet, I am still waiting on my closing Disclosure and the certificate of occupancy was sent 11/29.

This is scaring me now…I am gonna do some research and digging on this and I’ll give my builder a call to see what insight I can get from them.

[Pearl609]

So my new future next door neighbors closed on Monday and just told me they only had to come to the table with their downpayment, no builders fees BUT they are not with NACA… so is this something NACA members have to deal with only?

[Pearl609]

Hey @southflorida, on your post from July 10, 2018 Tim said:

The funds must however be held by NACA’s closing attorney. The builder should be able to accommodate this without much problem. The bank should pick up The builder fees among the closing costs.

Are you with Citi or BOA?

[southflorida]

This is not related to NACA. These are fees included in the P&S agreement. The builder fee is stipulated as a specific percentage of the purchase price and the impact fees and water and sewer fees as government fees that will be passed on to the buyer but I assumed all these fees will be covered by the lender in the NACA program

[southflorida]

I am with CITI and yes, I thought the lender would pay for those fees, they still may. We are trying to figure it out and NACA and the title company are being VERY helpful.

[Pearl609]

Okay good I am glad they are being helpful!

I am also with Citi.. I wonder if this has something to do with them exiting the Mortgage servicing business because I don’t recall anyone else having this issue with new construction.

Good luck and keep us posted!

[southflorida]

This should not have anything to do with CITI exiting the mortgage business and I thought that the builder fee was pretty common in New Construction purchases. That’s why I assumed that I would not have an issue with the lender covering it. Who is your builder? Does your P&S agreement include anything related to a builder fee?

[TTrumble]

Hello all,

This is a new one on me too. The closing attorney is investigating to help us get to the bottom of it. Just wainting to see what he finds out.

Tim Trumble
Online Operations, NACA
ttrumble@naca.com

[TTrumble]

Just an update…

The closing attorney has contacted the builder’s closing agent and is trying to arrange a workbale solution. As the newscasters would say, “More details as they become avaialble”.

Tim Trumble
Online Operations, NACA
ttrumble@naca.com

[djcwill09]

This would be great information to know. Thanks for the updates Tim.

[TTrumble]

Hello all,

Here’s an update…

First, the good news, @southflorida closed on his home Friday!

Our closing attorney for the area, Steve Greenspan, really stepped up here and helped all this happen. I reached out to him to get clarification on what exactly was happening, and he really went to bat for us. He determined that the Builder Fees and Impact Fees were actually listed in the Purchase and Sale Agreement.

The problem arose from the fact that the builder did not give any advance indication whatsoever of how much the fees would be. As such, everybody thought they would be maybe a couple of hundred bucks, not the $12,000-plus that showed up, which really blindsided everybody and threatened the entire deal.

Steve contacted the builder and managed to negotiate the impact fees to be paid by the builder. While not the perfect solution, it got things back to a manageble level that southflorida could handle.

So special thanks to Steve Greenspan for all his work that was well above and beyond the call of duty!

Also, there’s a good lesson here for everybody. Things like the Builder Fees disappeared in the years immediately following the economic crash since builders were struggling to sell new properties. Now that things have gotten better, such fees are showing back up in the P&S contracts. Make sure to get an estimate of how much those fees would be and don’t be afraid to put your real estate agent to work negotiating those to be builder-paid or at least greatly reduced.

Tim Trumble
Online Operations, NACA
ttrumble@naca.com

[djcwill09]

Congratulations @southflorida! Thanks Tim for the update. Seems like it was a quick turnaround!

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