Real Estate Agent with Keller Williams Capital Properties DC AB15253

Does this story sound familiar?

You started thinking about buying  a home. You didn't think you were serious enough just yet to bother with a real estate agent. You thought that a real estate agent would not work with you since you were only casually interested in buying a new home... maybe next year. So you started looking in the real estate section of the weekend newspaper and you saw all these great new properties with their teaser ads.



     "No Money Down!”

“Starting in the low $300,000s”

“$10,000 in Closing Costs”

So you walked into the builder’s model home to take a peek.  You were already in the neighborhood so why not?  The home is stunning!  Everything is new, everything is clean, everything is beautiful - and there is no clutter.  There is room for everything, including your special collections! It is just waiting for you.  That new home started looking pretty darn good.

The friendly site agent offered you a cup of coffee and volunteered to show you around. Before you knew it you registered with the sales person and gave them your name, phone number, and email.

What just happened?

You have documented for ever and ever that you are unrepresented.  You do not have an agent working on your behalf. AND you probably didn't mean to do that!  OOPS! 



You don't realize what that means - so you just kept going.  You kept talking. Then, the site agent said,  "Of course, there is a property just like what you want - and it is available for you!" 

Before you know it, you found yourself believing that you are getting a good deal. You dreamt about it. You talked to the people at work.  After all, the people at work always know everything about real estate. You may even have talked to your family.

Next weekend rolls around, and you revisited that friendly agent in the shiny sales office with the other bright and shiny sales people - just to see if that new construction really was a wonderful as you thought. Suddenly you started talking price and terms and upgrades and dates. 

What exactly was included in the base price? How much would it be to add in this or that?  Are those chocolate chip cookies she’s taking out of my new oven?

 Before you knew it, you were signing papers to put your dream property on hold. Papers you didn’t read, and if you did, you probably couldn't make heads or tales of. The sales person tolds you everything would be fine, you could cancel if you want. You wrote a check and met with their loan officer.  What just happened here? 

You just bought your new home and possibly a host of headaches.



Okay - so you know wasn't your intent, but you still think that’s not a big deal…it’s a new property so what can go wrong? 

" That agent was pleasant and so helpful.” you say.

Of course they are, they are paid to be helpful - to help you write that new home contract.

Don't forget that the site agent works for the builder. Their job is to sell the builder's product - with all the add ons. 

Well let’s see what could go wrong:

What happens when the builder is more than a year late in delivery, interest rates have risen and you can’t buy this place anymore. You never checked to find out that that particular builder is ALWAYS late on delivery.  The contract has penalties if you don't settle on time but no consequences for the builder's delay in performing. 

Are you going to lose your deposit? More importantly- where are you going to live?

The unit you thought you bought is no longer available, and the builder tells you there was a mix up. That unit was already sold before you signed the papers, but there is another one just like it. Now you don’t have the unit with the great view- but something else. What are your options?

You didn’t get that nice fancy granite you wanted, but something else. The builder tells you its too late to change. What do you do?

The builder hands you a 500 page document that are the Condo documents or Home Owners Association Documents. You have 5 days to look them over. Where do you begin?

These are just some of the things that can happen and have happened to people buying new property.

Buying a new home can be complicated

New construction can be wonderful too, but you need to go into the contract with your eyes wide open and with someone on your side.  The new home contract is different from the standard resale contract that most realtors use.  It is written to protect the builder - not the buyer. 

Make sure you bring along a buyer’s real estate agent –  someone who works for you and is looking out for your best interest. It doesn’t matter if it is a first time homebuyer studio condo or an estate in Potomac – you still need a buyer agent to protect and represent you!



1. The Sales Person Works for the Builder

The moment you walk into the sales office for that new construction project, the sales person (who may or may not be a REALTOR) will attempt to have you “sign-in.”  Once you do that, you are giving up your right to having a REALTOR represent you as part of your sales price. (See #5 below)  Even if you say you have an agent - but that agent was not there to register with you - you have become an unrepresented buyer.  

As that sales agent is pointing out optional upgrades and amenities, that sales person is working very hard on behalf of the builder. They are specifically trained to make the process smooth. Their goal is to sell you on the unit or lot you are interested in. They will introduce you to their loan officer and their title company.

 2. You Want to Have Someone Working for You

Having someone working for you will make all the difference in the world.

You have a full-time job, how else could you afford this property? Your agent will be there for you, when you can’t. She or he will explain the contract to you. She will point out where you are exposed and when you can lose your deposit.  Your realtor will be there throughout the process. Your realtor may find another new construction project that you just may like even more.

3. Your Buyer Agent Can Give You Expert Advice As You Go Along

You will have many decisions to make during the process such as the grade and quality of your kitchen cabinets, bathroom tiles, flooring. Your agent will point out upgrades that will retain their resale value and not just the most expensive material.   Your agent can give you advice on things that you should have and things that are not important. And most importantly, your buyer agent will focus on things that you can afford.

4. A Good Buyer Agent Knows the Local Market

Your agent has worked with builders before. They know which ones are dependable and which projects are a good value. They can tell if that $5,000 credit the builder is giving you for closing or “free” upgrades is really the best deal for you. In most cases, that $5,000 is tacked on somewhere else along the way without you realizing it- either with higher lender fees or title insurance costs. 

You want to check out the prevailing local market interest rates and fees, compare them to the builder controlled lender's offer and then analyze the true costs.  Study comparable new homes in the market so you can identify fake "discounts" - the ones that just add the costs of incentive packages on to the sale price of the house.  Either you have to do your homework or have a buyer agent who can do it for you. 

5. You are Already Paying for the Buyer Agent Commission


The builder has already budgeted into the sales price the cost of paying a buyer’s agent.  So what happens when the buyer does not have a buyer’s agent when buying the property? That builder has just made more money in the sale of your home.  The builder is reluctant to discount the price of the property just because you are unrepresented because that harms his lasting relationship with local realtors - who are his bread and butter.  

So, if you are already paying for it, why wouldn’t you want to hire a real estate agent to represent you? Most importantly, you need to have your agent with you BEFORE you make that first visit to a sales office. If you decide you need a buyer’s agent after you have “registered” with the builder, any buyer’s agents fees will come out of your pocket.

We at the Lise Howe Group are here to represent you and protect your interests. If you are thinking of new construction anywhere in the DC Metro Region, then you should definitely give us a call at 240-401-5577.  We are licensed in DC, Maryland and Virginia and we are here to help you! 



This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Home Buying
District of Columbia
lise howe group buyer agent
new construction negotiation
buyer agent for new home construction
lise howe group new home contruction
dc metro new home construction

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Jason Anderson
Platinum Realty - Jenks, OK
Realtor®, Organizational Expert

Great info, and very true! I eould never recommend doing any kind of deal without representation by someone to protect your interests.

Jun 16, 2017 11:24 AM #11
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Lise for some reason Buyers feel they do not need to have a Buyer Agent on new construction.  Even though it is new construction it is still a purchase like any other purchase, and the Builder's Realtor is going to watch out for the Builder's interest not the Buyer's

Jun 16, 2017 02:19 PM #12
Dörte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Lise,

Very good advice. Amazingly, I have helped people, where closing was delayed because there was a punch list with around 200 items that only been partially satisfied. Nothing major, but not anything you would want to live with, considering it is a new home. I have also found errors in the mechanical systems, before the sheet rock went up. Even the builder was glad, they did not have to tear open the walls after the fact.

Jun 16, 2017 07:43 PM #13
Melissa Spittel
Coldwell Banker Residential Brokerage - Westminster, MD
"Achieving Results Together "

Absolutely fantastic post that anyone who is considering new construction should read. There is a new community being built behind my home (my previous perfect view is gone forever, ahhh). Anyway, I have blogged and encouraged new buyers to have representation, but that dangling carrot gets them everytime. Why do I need representation? It's a new home customized the way I want it! Surely it's perfect! I have watched the construction, if only they saw what I have seen. Homes aren't built like they used to be, baby. 

Jun 16, 2017 08:51 PM #14
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Lise Howe so true! One thing the buyers expect is - the difference in price equivalent to buyer's agent commission and that does not happen - usually.

Jun 16, 2017 09:43 PM #15
James Dray
Fathom Realty AR LLC - Bentonville, AR
Exceptional Agents, Outstanding Results

Good morning Lise.  Yes ma'am we run into that scenario on a weekly basis.

Jun 17, 2017 03:06 AM #16
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
"Franklin MA Homes"

Good morning, Lise Howe you did a fantastic job with this post..... and similar scenarios are plentiful and can be horrific to a buyer who dares to rely on the listing agent/builder's rep or the builder for guidance.... 

Jun 17, 2017 03:48 AM #17
Kat Palmiotti
Grand Lux Realty, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Indeed. These are great reasons why a buyer should use a buyer's agent for any purchase, including new construction. 

Jun 17, 2017 03:53 AM #18
John Wiley
Right Move Real Estate Group- EXP Realty - Fort Myers, FL
Lee County, FL Real Estate GRI, SRES,GREEN,PSA

Lise Howe thank you for this very important warning to buyers who are looking at New Construction.

Yes, the agent on duty is representing the Builder.

Yes, the Builder's Contract is totally in favor of the Builder.

This is also a message to Real Estate Agents who take their buyer to new construction. The builder asks you to register the buyer and tell you they will take care of the rest. If you take the buyer you should have this discussion prior to the visit and make sure they understand the need to have you representing them.

Thanks for a great and important post.

Jun 17, 2017 05:25 AM #19
Nathan Gesner
American West Realty & Management - Cody, WY
Broker / Property Manager

Great advice! Too many people think a new home is an easy purchase but I can think of many things that could go wrong. Buyers need an agent like Lisa to protect them!

Jun 17, 2017 05:43 AM #20
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

Howe's "why" is at work here

Jun 17, 2017 05:49 AM #21
Anthony Vosilla
Tony's Appraisal Services - Centereach, NY

Good post.  Along with the builders loan officer and title company the deal, may also include the builders ""go to"" appraiser.  Hmmmmm, any more aces up that sleeve Mr. Builder??

Jun 17, 2017 06:23 AM #22
Gary L. Waters, Broker Owner, Waters Realty of Brevard, LLC
Waters Realty of Brevard, LLC - Rockledge, FL
... a small office, delivering big service!

Such common sense except, as you point out, many consumers do not understand the commission is already built in the transaction!

Jun 17, 2017 07:03 AM #23
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

Excellent.  Well thought out and well written post. Buyers often truly just don't understand this! -Kasey

Jun 17, 2017 11:48 AM #24
Debbie Reynolds
Platinum Properties - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Bingo. If the builder sells it directly he has increased his profit margin and you are adding to his vacation fund. The loser is generally the buyer who has no representation and leaves money on the table.

Jun 17, 2017 07:01 PM #25
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

Well written and to the point. Every buyer who is even thinking of buying new construction should read this post.

Jun 17, 2017 07:58 PM #26
Sheri Sperry - MCNE®
Coldwell Banker Residential Brokerage - Sedona, AZ
(928) 274-7355 ~ YOUR Solutions REALTOR®

Hi Lise,

This is a great blog to get the word out about being represented by a buyer agent. I bought 4 new homes and never realized I could be represented. It was only after taking my real estate license did I find out. 

Jun 17, 2017 08:12 PM #27
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

The uninformed will be tripped up by the open house every-time. At least where I practice it does take a signed agency disclosure to make it a formal agreement to represent. If I had a buyer walk in to an open house...then come back with Her/His buyer agent I would honor that representation for sure.

Jun 18, 2017 08:29 AM #28
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Excellent advice, Lise Howe ... and so timely for readers in my area.  Construction has returned to our area and homes are popping up again.  New construction buyers must educate and protect themselves.  The best way to do that is to have their own agent advocating on their behalf.  They need to take your post to heart ...


Jun 18, 2017 04:44 PM #29
Felix Portman

Thank you for sharing this advice. At www.onyxmgt.com we have established a due diigence process along with a checklist to ensure that our client is well protected when it comes to buying new construction. Looking forward to new posts. 

Jun 18, 2017 05:37 PM #30
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?


Lise Howe

Assoc. Broker and Attorney Licensed in DC, MD, VA,
Ask me a question
Spam prevention

Additional Information