Street of residential houses

First Steps in New Construction

We are seeing an increase in new construction projects as demand for housing remains strong. For several years following the financial crisis, new construction ground to a halt. Demand was non-existent, financing for builders evaporated, and developers went out of business. For new construction projects to ramp back up, it takes many years to secure land, obtain approvals from municipalities, and line up financing and subcontractors. The projects you see underway today are many years in the making.

It is important to understand the differences in new construction purchases versus the purchase of an existing home (known as resale homes). If you wish to be represented by an agent of your choosing, then these next few paragraphs will be of important interest.

The Initial Visit

When you go to a new construction site, you will be met by a site agent. This agent may be an employee of the builder or they may be an agent for the real estate brokerage representing the development. In almost all cases, they will want you to register with them. Caution! Warning! If you have your own agent or wish to be represented by your own agent, do not register. Here’s why: Once you register, and your agent is not present with you, the builder/developer may not recognize your representation by anyone other than them. They most certainly not offer compensation to your agent who you owe buyer agency compensation to if you have a buyer’s agency contract.

What then takes place if you do not have an agent, the site agent will now represent you and the builder. Your interests will not be represented by your own agent. You no longer have an advocate working for you to help you navigate the offer process, the costs of upgrades and features, the contract (which was written by the builder/developer’s attorneys and is not the standard agreement), the use of lenders and title companies, and other aspects of the purchase process.

Can’t I Just Stop In?

Here is what often happens. You are driving around looking at homes and neighborhoods and you see this new development. You want to stop in and get some information and maybe take a look at the model for some ideas. You enter the office and are greeted by a friendly face. You say that you are just driving by and want to take a look. The agent will say “Sure, can I have you sign in?”. Now you are registered with them. If by chance you want to make a purchase in that community, you will not be able to use your agent and have saved the builder in commissions they do not have to pay.

The Recommended Approach

If you wish to use your own agent, then we suggest the following. Resist the temptation to walk into any new construction site you see unless you have your agent with you.

Instead, let your agent know that you are interested in seeing some new construction sites. Your agent will then contact the development and schedule and appointment. That way, the site agent will be ready to receive you and your agent and will be able to dedicate time to you. You will then be registered with your agent and be secure in knowing you will be represented.

If you don’t have an agent prior to going to new construction, we suggest that you take the time to find one who you feel comfortable in representing you. You will be in a better position to make your home purchase a pleasurable one.

Next Post

Stay tuned in our next post to see how a buyer’s agent can help you with a new construction purchase.

Buy and Sell With The Cyr Team

The Cyr Team delivers superior client care to those looking to buy or sell real estate. We educate, advise, and guide our clients through one of the biggest transactions of their lives by bringing a structured, process-driven methodology to build consistency and clarity in a real estate transaction. Located in SE Pennsylvania, we are licensed in PA, DE, and NJ to better serve the tri-state area.


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