FAQ - Buying a Newly Constructed Home from a Developer

If we buy a new home from a developer, can we be represented by a buyer's real estate agent?

Absolutely.

 

What will it cost me to be represented by a buyer's real estate agent when buying a new home?

Nothing. The builder or developer will pay us a commission if we have a written agreement to represent you. The fee is built into their budget.

 

If we are not represented by a buyer's real estate agent, will the developer discount its price to us?

No. If the developer discounted the price to you, the developer would be forced to reduce the price on all homes, including those sold and unsold. The cost to the developer would be prohibitive. Thus, developers don't discount their prices unless the real estate market is in a steep decline. Notwithstanding, we may be able to negotiate upgrades for your home and other benefits such as a premium location and the payment of your HOA fees and closing costs.

 

What is likely to happen if I go to the developer's sales office before, I engage you to represent us?

If you sign a registration or guest form without disclosing that you are represented by a buyer's real estate agent, they are likely to take the position that you have waived your right to representation. This happens frequently because they don't want you to obtain any advice that will help you. For example, purchase contracts used by developers are not the standard forms used in resale real estate transactions. The contracts are one-sided in favor of the developer. They also generally don't want a buyer's agent to explain the CC&Rs and Public Subdivision Reports.

 

Does the sales representative in the developer's sales office represent my best interest?

Absolutely not. They represent the developer's best interest. Their job is to maximize the developer's profit and to get you to sign a contract as soon as possible.

Before You Shop at a New Home Development

 

  • When you walk into the sales office immediately let them know you are represented by a Realtor. Otherwise, they may withhold information that your agent will need in order to protect your interests. They may also prevent you from being represented. This is a common occurrence.

  • Be aware that if you disclose that you are represented by a Realtor, the builder will compensate your agent at no cost to you. Ideally, give them one of our business cards.

  • It is extremely unlikely that the builder will not be using the standard California Association of Realtors purchase agreement which has been designed to be fair to both buyers and sellers. It is likely the builder will attempt to utilize a contract written by a law firm that is very one-sided in the home builders favor. Extreme caution must be exercised before signing anything. It may require modification or an addendum.

  • Remember that the sales agent in the builder's office represents the builder, not you. This is true regardless of what they say.

  • One of the first documents that needs to be reviewed are the CC&Rs. The builder may hesitate to provide them at first. CC&Rs may contain restrictions on parking, pets, acceptable colors, use of the property, and more. Don't leave without the CC&Rs if possible.

  • It is likely that our company knows the reputation of the builder. It may be good or not so good. Whether a builder is known for selling defective products or honoring their warranties is important.

  • The financing offered by the builder may be very good or not so good. We can help you obtain the most competitive loan available.

  • We can assist you in determining whether to buy upgrades from the builder or from a third party. Upgrades can be very expensive so this becomes an important decision.

  • While many home builders will not negotiate the price of its homes, other items can often be negotiated by us. These includes closing costs, floor coverings, landscaping, upgrades, finishes, and the length of individual component warranties.

  • We understand the home buying process when a new home developer is the seller. We can help you save money while protecting your interests.

Pacific-Realtors.net
818-991-5200