How Many Ways Can I Count the Reasons Why, YES You Need an Agent!

With the skyline dotted with construction cranes and new buildings going up faster then you can drive to the Eastside, it’s no mystery why many buyers are looking at new construction projects. Downtown Seattle and Bellevue have more new condo buildings being built then either city has ever experienced. While builders and developers are pushing new units out as fast as possible to maximize their return on investment, what does this mean for the average buyer who is interested in buying new construction?

Well first off, it means that there may be a lot of “bumps” along the way to the actual finished project. Most projects have spent thousands of dollars looking good on paper and online. However, looking great on paper or in their 3D models may be an entirely different experience then looking great in a 520 square feet unit with no storage or views. Having an objective, experienced “voice” to help you understand the projects benefits and drawbacks is vital to making a good investment. With so many projects and deadlines for developers to manage, you become a number in a see of many. You may not know the right questions to ask, and the site agents are not going to volunteer additional information unless it’s information that might get you to sign on the dotted line. Once you have made the commitment and signed a contract, how are you going to handle getting something changed or fighting a change the developer wants to make mid-project or right before closing? Are you going to rely on the site agent who has an interest in helping the seller or your own tenacity navigating a process that you are not 100% familiar with inside and out? What is going to “push you over the edge” to make a decision to buy?

Most new condo projects have either a pre-sale or a sales office with model units, mock kitchens and marketing materials designed to swoon you into a state of “must purchase in this building” before you walk out the door. All developers have a team of “site agents” who they hire to sit in the sales center and sell their product. *Note these people are hired by the developer who is the seller. Anyone who walks into the sales center without brandishing boldly that they have their own agent will be swept up by an onsite agent to “act” as their Buyers Agent should they decide to purchase and they have a whole slew of reasons why this is the “best” project around for you and you’ll miss out if you don’t buy today.

What does having a Buyers Agent mean to a buyer with new construction?

Let’s go over what a Buyers Agent responsibilities are:
• Be loyal to the buyer by taking no action that is adverse or detrimental to the buyer’s interest in a transaction.
• To timely disclose to the buyer any conflicts of interest.
• to advise the buyer to seek expert advice on matters relating to the transaction that are beyond the agent’s expertise.
• Not to disclose ANY confidential information from or about the buyer, except under subpoena of court order, even after termination of the agency relationship.
• To make a good faith and continuous effort to find a property for the buyer.
• The showing of property in which a buyer is interested, to other prospective buyers by a Buyers Agent does not in and of itself breach the duty of loyalty to the buyer or create a conflict of interest.
• The representation of more then one buyer by different licensees affiliated with the same broker in competing transactions involving the same property does not in and of itself breach the duty of loyalty to the buyer’s or create a conflict of interest.

In addition if an agent has chosen to take the classes and belong to the National Association of REALTORS and can go by the term REALTOR, then they also have an additional set of guidelines they must follow called the REALTOR Code of Ethics.

The Code of Ethics is long but here are a few highlights from the Standards of Practice
• REALTORS, when seeking to become a buyer representative, shall not mislead buyers as to savings or other benefits that might be realized through use of the REALTOR’s services.
• When entering into a buyer agreement, REALTORS must advise potential clients of: 1. The REALTOR’s company policies regarding cooperation. 2. The amount of compensation to be paid by the client. 3. The potential for additional or offsetting compensation from other brokers, from the seller, or from other parties. 4. Any potential for the buyer representative to act as a disclosed dual agent. 5. The possibility that seller’s or seller’s representative may not treat the existence, terms, or conditions of offers as confidential unless confidentiality is required by law, regulation, or by any confidentiality agreement between the parties.
• REALTORS shall avoid exaggeration, misrepresentation, or concealment of pertinent facts relating to the property or the transaction.
• REALTORS® shall not accept any commission, rebate, or profit on expenditures made for their client, without the client’s knowledge and consent. When recommending real estate products or services (e.g., homeowner’s insurance, warranty programs, mortgage financing, title insurance, etc.), REALTORS® shall disclose to the client or customer to whom the recommendation is made any financial benefits or fees, other than real estate referral fees, the REALTOR® or REALTOR®’s firm may receive as a direct result of such recommendation
• When REALTORS® prepare opinions of real property value or price, other than in pursuit of a listing or to assist a potential purchaser in formulating a purchase offer, such opinions shall include the following:
  1. identification of the subject property, 2. date prepared, 3. defined value or price, 4. limiting conditions, including statements of purpose(s) and intended user(s), 5. any present or contemplated interest, including the possibility of representing the seller/landlord or buyers/tenants, 6. basis for the opinion, including applicable market data, 7. if the opinion is not an appraisal, a statement to that effect

In addition to the items above ultimately a Buyers Agent is someone who should have NO interest at all in the outcome of the seller and be 100% focused on their buyer. If they have an interest in the seller’s outcome (ie. earning bonuses or perks for selling units or ensuring they have a job at the next project) then they can not be 100% objective in their representation to the buyer. I highly recommend that anyone considering purchasing new construction start out, not by visiting all the sales centers but by meeting with a Buyers Agent who is NOT a site agent first. This gives you the opportunity to learn about the market and what the “industry talk” is among agents about the different projects, developers and trends. It’s easy to get caught up in a great marketing presentation especially when it’s fully equipped with 3D models and all the bells and whistles but with an agent by your side you’ll have the calming reality of statistics and market intelligence behind your decision and you won’t feel “pressured” that you have to buy right then and there. Notice that one aspect of the responsibilities above is to prepare a “value statement” for a Buyer on what they are purchasing. I can’t imagine that most site agents go the extra step in providing their buyers with other “competing” information as to what might be a better deal then their project or telling their buyers that the project is priced $200 more a square foot then anything else in the city but “it’s still such a great deal”… even though it would be in the Buyers best interest. Overall using a Buyers Agent is all about risk reduction. Reducing your risk and helping to ensure that you make a decision that you’ll be happy with in years to come.

There are a lot of Buyers Agents in the Seattle area and with all of the agents available, I can’t image why any buyer would take the added risk by using a site agent who has been hired by the seller to sell the project or not using an agent at all. What happens when there are problems with the project; delays, the wrong finishes installed? These happen very regularly in all of the new construction projects. Would you want an advocate who is going to fight to get you what you want or get you compensation for something that isn’t right, or would you want someone who is too busy servicing the other 50 buyers purchasing in the building or trying to placate the seller/developer over you because that’s who hired them and therefore your concerns really never get addressed. Do yourself a favor, get a Buyers Agent first and then go shopping in new construction.