You've seen the ads for this great new home development  promising a discounted mortgage rate and $25,000 in free upgrades.  "Gee, honey, this looks like a terrific and really easy way to buy a home.   Let's go today"

What could possibly be wrong with that?

1)   Most important is that the agent who will greet you and sell you that home, represents the seller (in this case the builder or developer).  Anyone buying real estate should be represented by an agent who is contractually bound to the buyer, not the seller.

If the District Attorney charges you with a crime, you wouldn't want someone from the DA's office representing you. You'd hire an attorney to be on your side. Same idea with real estate agents, only to continue the analogy the DA's office would pay for your attorney.

That's the way it generally works in real estate. The seller pays the seller's agent a commission (say, 6%), and that agent is contractually bound to split that commission (almost always) 50/50 with the buyer's agent. No cost to the buyer to have professional assistance and representation because the seller pays.

2) The builder may indeed be able to offer what appears to be a "below market" mortgage rate.  There are two reasons why you should talk with a local mortgage broker or a bank mortgage officer.  

First, they may be able to match or beat what the builder presents as a "below market" rate. 

Second, if it is truly below market, then the seller is probably paying the bank an up-front fee to lower the rate.  Nothing wrong with that and sometimes individual sellers do the same.  It's called "buying down the rate".  The issue here is that the builder is not in business to lose money, so the money to buy down the rate has to come from somewhere, and it's most likely an inflated purchase price for the home.

3) "$25,000 in free upgrades" Remember who sets the price of the home in the first place, the builder.   So if the home price is really at fair market value, where would the cost of the �free upgrades" come from?  Or could it be an inflated price?  Could the $25,000 already be in the purchase price of the home?

Don't even look at the model home without your Realtor! Your best protection against any of these is always a local Realtor serving as your buyer's agent. If the very first time you go to see the models (and they will require you to register) you go with your Realtor, the builder will pay that Realtor's commission to represent you, just like any other home sale.  If you register first without a Realtor, they will not and you are stuck with the DA's attorney on your side of the table.