Don’t set foot on that new construction site without knowing the rules of the road!

Jefferson Place - 300 Mamaroneck Ave.
Jefferson Place of White Plains NY – Sales Update:
April 27, 2015
Historic Home - Tarrytown NY 10591
Westchester homes with history and modern amenities
May 12, 2015

Issues about new construction have been a non-issue for some time.  But as the market is changing from bear to bull, the builders are back and new developments are starting to spring up.  So its time to talk once again about the surprisingly tricky issue of visiting new construction sites.

Advice so many buyers choose to ignore:  Don’t go to a new construction site on your own!

Like every other agent I know, I warn all of my buyers  over and over again not to show up on any new construction site without me or another agent of their choice in tow.  If a buyer wants to look at a new construction site, I am happy to make an appointment for them and bring to the site personally.  But I beg, plead and cajole them not to give in to the temptation to just walk onto the site for a “quick peek”.

These warnings are not trivial and I  always explain chapter and verse as to why they need to wait for me to make the appointment and bring them there.

However, above and beyond any other advice I give, this is the one piece of vital information that all too many buyers simply choose to ignore.  In spite of how well I inform them, they can’t imagine that taking a quick look around can do any harm….and that “open house” sign outside is soooo tempting….a quick look couldn’t possibly be a problem…?

I understand the temptation.  Really I do.  Buying a home is an exciting process and new construction can be very compelling.  But this is a case where the buyer needs to contain their excitement, cool their jets a bit and wait for that appointment with their agent.

Ouch! You just gave up your rights to free buyer representation!

This story has replayed itself over and over again.  An agent has a buyer client that they have been working with for quite some time.  Suddenly the buyer client calls them all happy and excited. Despite their agent’s warnings about new construction, the buyer went right ahead and visited a newly opened site during an open house.  They found their dream home and are calling to get their agent into the loop so they can negotiate the transaction for them.

When I hear this from a buyer, I take a deep breath and ask the fatal question:  “You didn’t give them your information, did you?”

“Of course we did!  How could that possibly hurt!” is the usual reply.

UGH!!! Yes it can. The trouble is, that once a potential buyer has walked onto a new construction site without their agent, the builder will  almost always refuse to pay for a buyer’s agent to represent them.  That’s right, you (the buyer) are now responsible for your agent’s commission or you have to choose to go unrepresented.  Your impatience cost you either representation in the sales process or thousands of dollars in commission.  Either way, you lose because the valuable option that every buyer takes for granted – that is: the option to have your own representation at the sellers expense – has been taken off the table.

That nice sales agent at the building site represents the builder, not you…

Now, many buyers say “So what? We have that nice sales agent on the construction site to help us!”  All true. There’s just one problem with that. That nice agent is probably a very good and decent person who is very conscientious about doing their job. And their job is to get the best price and terms for the builder…not for you.  In fact it is their fiduciary obligation to get the best price and terms for the builder.

Let me make this clear. They owe the buyer fair and honest dealing.  They can’t lie or distort.  But their obligation ends there.  This also means that  anything you say about he buying process,  your very enthusiasm for the development, your urgent time line, the need for a certain school district, or a wish for certain upgrades or anything else you can imagine will be used to benefit the builders bottom line.

Representing yourself and why your agent can no longer help you…  

At this point, the majority of buyers will opt to represent themselves rather than foot the fee for a buyers agent.  Unfortunately, most people greatly overestimate their negotiating skills for this type of transaction. Unless you are a pro at negotiating real estate transactions and know the local market backwards to front, you are generally David going up against Goliath.

Many buyers then think that this really isn’t a problem.  Why can’t  they simply go back to the agent that helped them prior to their visit to the site for a bit of free advice on the side?   Unfortunately, once you have decided to work without an agent, I can no longer help you as a buyers agent.

The reasons are complicated but important for buyers to understand.  Its not about sour grapes for not getting paid. It goes back to the rules we have to follow as agents working in New York State.  Because you have opted to go into this transaction unrepresented, I am no longer your buyers agent.  In New York State, if I am not a buyers agent, I am by default a sellers agent.  Which means that I am in the same position as the agent on the building site.  I can’t represent your interests.

New construction can be a great – just know the rules of the road!

Look, there is nothing wrong with considering new construction.  But buyers need to realize that the rules of the road governing representation are far from transparent in these situations.  They need to trust the agent that they are working with and understand the reasons why that agent must accompany them on their first visit to any new construction site.

© 2015 – Ruthmarie G. Hicks – – All rights reserved.

Please feel free to contact me anytime to request additional information or to set up an appointment so we can explore your listing or purchasing needs. I am easy to reach by phone, text or email. Or, if you just want to continue your search online, the links below will help you get started.

Phone/Text: 914-374-5529


Property Search Home Valuation Open Houses

Comments are closed.