Back road to downtown Suisun City

Jim Porter

Solano Real Estate Scene: Jim Porter

Article By: Jim Porter – April 26, 2024

I have been to downtown Suisun City 90 to 100 times and have always taken Highway 12 to the Main Street-Downtown Suisun exit.

A couple of weeks ago, Prudence Hermon, of Gryphon Real Estate, called me about a client looking at a new house in Meridian, by Century Communities, a new home subdivision a few blocks from the Suisun Harbor, Athenian Grill, La Cabana and Cast-Iron Grill.Prudence is one of those people that has so much energy and enthusiasm over the phone that I wanted to meet her and see these new homes she was raving about that I had never seen before.

New home builders, over the past 20 years, have become the enemy for loan officers at banks, credit unions and mortgage bankers because they legally incentivize their buyers to use their in-house lender. Occasionally, an outside lender can compete if the incentive is small, but when they offer the buyer $10,000 to $20,000 for closing costs, this is tough to beat. We lose a lot of our pre-approved buyers to the new home builders each year.

I remember back in the 1990s, raising four kids and working my butt off to support my family, losing a great customer to one of the builders and thinking this incentive was unethical and almost bribery. I checked with the Department of Real Estate and confirmed these incentives are 100% legal and a seller has every right to offer this type of sales price concession to buyers.

The four reasons new home builders give this money to buyers is:

No. 1: Profit from the loan and/or shared marketing and advertising funds from the lender.

No. 2: Buyer control. The builder does not want an outsider giving advice or interfering with the builder’s sales pitch. The in-house loan officer is committed to and dependent on the builder-seller.

No. 3: Builders have carrying costs and once the occupancy certificate is issued the builder wants his money that day. If the lender drops the ball a few times and is late, they get fired if they work for the builder. Builders and Realtors need lenders to close escrow on time and communicate throughout the transaction and never drop the ball. Some lenders are not that great.

No. 4: Builders do not like to drop prices because it negatively affects future appraisals. When a builder has trouble selling houses, they prefer to offer huge incentives for closing costs and upgrades for appraisal comps in the future.

Now, back to the back road.

My wife Mary and I drove over to Meridian on Sunday, on the corner of School Street and Cordelia Road, and for the first time I took the Pennsylvania exit off Highway 12, thanks to Google maps, and took a left on Cordelia Road and showed up at Meridian, the former site of Crystal School.

The new homes are kind of nice and the builder built the entire neighborhood to 6 feet above sea level to avoid flood insurance. Now all this $2.8 billion market cap builder needs to do is give their buyers an incentive if they use a good local lender for the financing.

After leaving Meridian and meeting Prudence and the two salespeople at Meridian, Mary and I took Cordelia Road all the way to Green Valley Road, just past Interstate 680, Pittman Road and Thompson’s Corner to have lunch at Green Valley Country Club.

I had no idea this road even existed and was surprised how many businesses, including an Air Stream dealer, existed out on this Solano County back road. It’s a nice ride.

Jim Porter, NMLS No. 276412, is the branch manager of Solano Mortgage, NMLS No. 1515497, a division of American Pacific Mortgage Corporation, NMLS No. 1850, licensed in California by the Department of Financial Protection and Innovation under the CRMLA / Equal Housing Opportunity. Jim can be reached at 707-449-4777.

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