Many investors in our area, especially those from other states (California and Arizona in particular), are attracted to new home subdivisions by high-volume, low-cost builders such as KB Homes. KB Homes is arguably one of the largest and most profitable builders in Central Texas. Their prices range from the sub-100s to the half-millon dollar "luxury" home subdvisions. The builder has recently seen a few news stories on issues that unhappy homeowners have with their company.
KVUE recently reported on the inclusion of a "binding arbitration" agreement into KB contracts, which had previously been ruled unlawful. Some disatisfied KB home owners are also speaking out against clauses in their contracts that force residents to go to binding arbitration in lieu of having the right to sue. News 8 Austin aired a KB story this past week due to the large number of homeowners in Round Rock who are facing foreclosure due to insufficient information about property taxes when buyers are give their payment amounts.
When I spoke to some of the builder representatives, they noted that many of the foreclosures are occuring with out-of-state buyers because they simply do not pay attention to the fine print. Many are often unaware of the higher tax rates in our state, so do not properly calculate their payment based on the improved value. I've often seen brand new agents get a call from a buyer from another state who "knows what they want" and would just like the agent to facilitate their purchase. The inexperienced agents are often unaware of the issues that arise when working with builders.
Of course, some new agents are well-informed and do excellent jobs, but purchasers from other states may want to make sure they're working with an expert who can help identify potential issues before they come back to hurt the buyer.
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