Must read post on new construction

Alright, the Seattle PI blog has had some okay articles about new condo construction this week, but this blog post is a must read for all buying or considering buying new construction: New Construction Condo’s (new doesn’t mean perfect). The post, while short, talks about why you want your own representation, what happens when the builder runs out of your countertop, the concerns with upgrades, etc.

Most people have the preconception that when you are buying something “new”, that means it’s void of any defects and no one has used it. The buyer has a pretty exact expectation as to how their unit is going to look and feel. Often this is not the case, particularly in units that are sold as the “model unit” or when the contract is not in favour of the buyer. When you read the fine print of the Builders Addendums (they are all different), there is often some pretty strong language that protects the seller (the builder) and takes away most of the power the buyer has in any say of how their unit is finished and when it’s finished. For example, if the builder runs out of a particular material for the countertops they have the right to substitute it with whatever they see fit as long as the “value” is similar and they don’t have to consult the buyer. Things like finishes can be changed at the builders whim if it’s a problem to get a certain appliance or they didn’t plan their orders carefully and it happens fairly frequently.

About Matt

Matt , Urbnlivn's publisher, has a love for lofts with industrial features and new construction condos that is only eclipsed by his passion for outdoor sports and urban living. Phrases such as “polished concrete” and “exposed brick” are music to his ears. You can also find Matt on Twitter or skiing.

  • traver

    Wow! I have to admit, I’m a bit shocked by these posts. I’ve purchased two condos over the last three years, and they were all presale.

    My first purchase was with a buyer’s agent from Windermere. She did a great job for me. What’s interesting, is that she said all sorts of the same things that these agents are saying when I interviewed her. (She knew that I wanted something “new”). However, she didn’t really have any of the levgerage that these real estate agents purport to have. She couldn’t negotiate a lower price. She couldn’t get an interest rate buydown. She couldn’t get them to “throw in” an upgrade. Even if there was something ugly in the builder’s addendum (which there wasn’t), she wouldn’t have been able to get them to change it.

    Again, she was very nice and did a great job. But, she was really inconsequential in the greater scheme of things. Once we signed the contract, she just “came along for the ride” with me. Any questions I had, she either called the site agents or directed me towards them.

    My second purchase was with a site agent. I was hoping that they would be able to get concessions that my other agent wasn’t able to get, since they work so closely with the developer. You know what? They couldn’t, really. But, they were able to do a couple of cool things. Technically, the upgrades were already due when I went in. They were able to sneak my order for hardwood floors in – a month late! My other agent wouldn’t have been able to do that. Whenever I had a question about the project, I just called my site agent, Tracy, and she knew the answer right away.

    Anyways, it just sounds like these real estate agent “bloggers” are propogating scare tactics to get consumers to use their service – a service that truly doesn’t add any value to the transaction. Just my $0.02

    ;o)

  • traver

    Wow! I have to admit, I’m a bit shocked by these posts. I’ve purchased two condos over the last three years, and they were all presale.

    My first purchase was with a buyer’s agent from Windermere. She did a great job for me. What’s interesting, is that she said all sorts of the same things that these agents are saying when I interviewed her. (She knew that I wanted something “new”). However, she didn’t really have any of the levgerage that these real estate agents purport to have. She couldn’t negotiate a lower price. She couldn’t get an interest rate buydown. She couldn’t get them to “throw in” an upgrade. Even if there was something ugly in the builder’s addendum (which there wasn’t), she wouldn’t have been able to get them to change it.

    Again, she was very nice and did a great job. But, she was really inconsequential in the greater scheme of things. Once we signed the contract, she just “came along for the ride” with me. Any questions I had, she either called the site agents or directed me towards them.

    My second purchase was with a site agent. I was hoping that they would be able to get concessions that my other agent wasn’t able to get, since they work so closely with the developer. You know what? They couldn’t, really. But, they were able to do a couple of cool things. Technically, the upgrades were already due when I went in. They were able to sneak my order for hardwood floors in – a month late! My other agent wouldn’t have been able to do that. Whenever I had a question about the project, I just called my site agent, Tracy, and she knew the answer right away.

    Anyways, it just sounds like these real estate agent “bloggers” are propogating scare tactics to get consumers to use their service – a service that truly doesn’t add any value to the transaction. Just my $0.02

    ;o)

  • traver

    Oh, and I forgot to mention! My Windermere agent kept tying to get me to buy older things instead of what I wanted. I couldn’t figure it out at the time. Then I realized that if I bought something new, she wouldn’t get paid for a YEAR! If I bought something old, she’d get paid in 30 days. Real estate agents are so funny!

  • traver

    Oh, and I forgot to mention! My Windermere agent kept tying to get me to buy older things instead of what I wanted. I couldn’t figure it out at the time. Then I realized that if I bought something new, she wouldn’t get paid for a YEAR! If I bought something old, she’d get paid in 30 days. Real estate agents are so funny!

  • http://twitter.com/mattgoyer mattgoyer

    I believe they’re also paid a flat free for new construction while for resale buildings they 2-3% so the finanicial incentive is much greater :).

  • http://blog.mattgoyer.com Matt

    I believe they’re also paid a flat free for new construction while for resale buildings they 2-3% so the finanicial incentive is much greater :).

  • .

    Williams Marketing has also been known to place people who don’t have representation higher up on the totem pole, so to say.

    If it’s going to be a hot project, such as Olive8, they say there’s going to be a lottery (or give out time slots) to give fairness to all the buyers. However, the week leading up to this they have “information” sessions where you fill out a sheet and give them your pre-qual letter.

    During this process they ask if you’re working with a realtor. This is the question they’re really looking for the answer to. If you aren’t, then it means Williams gets to represent you.

    So fastforward to this lottery, who do you think is going to get chosen…someone with external representation, or someone working with a Williams Marketing agent? Of course the person working with Williams is going to get chosen!

    I know this because I fell for it….hook, line, and sinker. I wanted to get into the building so I knew that my only chance was to go with a Williams Marketing rep. And you know what, it worked. I got a unit under that I somewhat wanted, and a buddy of mine (who was working with his own agent), didnt get a call back until 10 days after sales had begun.

    Of course, I don’t trust the Williams Marketing agent at all. Several occasions I feel she’s mislead me.

    I really would love to make this practice more well known throughout the area. The ultimate resolution would be to have a law which disallows Williams Marketing (or another “marketing” companies) to represent buyers without external representation. Onsite marketing companies represent the interest of the developer first and foremost.

    Here’s another excerpt about one’s dealings with Williams Marketing and Olive8:

    “No problem, I can understand how the folks at Olive 8 lured you to sign a contract with their agent by offering you one of their “exclusive slots”.

    I had a buyer/friend who as we headed to our scheduled meeting with the builders agent, pulled a fast one on us stating that if we showed up together with me as his agent, that he would be in a lottery to hope to purchase one. HOWEVER, if she (sellers agent on site) represented him, that she would guarantee him a unit.

    We both agreed that this was a shady sales tactic on their part, but as we discussed his options, I told him that if he truely wanted to purchase in that building, that he might want to take her guarantee. He did purchase with her, thereby losing his saving of (40% of my commission) and leaving me out of the loop.

    I was bummed that I wasnt able to help in his deal as he is a friend and has purchased many times with me. Left a bad impression of the sales staff at Olive8.”

  • .

    Williams Marketing has also been known to place people who don’t have representation higher up on the totem pole, so to say.

    If it’s going to be a hot project, such as Olive8, they say there’s going to be a lottery (or give out time slots) to give fairness to all the buyers. However, the week leading up to this they have “information” sessions where you fill out a sheet and give them your pre-qual letter.

    During this process they ask if you’re working with a realtor. This is the question they’re really looking for the answer to. If you aren’t, then it means Williams gets to represent you.

    So fastforward to this lottery, who do you think is going to get chosen…someone with external representation, or someone working with a Williams Marketing agent? Of course the person working with Williams is going to get chosen!

    I know this because I fell for it….hook, line, and sinker. I wanted to get into the building so I knew that my only chance was to go with a Williams Marketing rep. And you know what, it worked. I got a unit under that I somewhat wanted, and a buddy of mine (who was working with his own agent), didnt get a call back until 10 days after sales had begun.

    Of course, I don’t trust the Williams Marketing agent at all. Several occasions I feel she’s mislead me.

    I really would love to make this practice more well known throughout the area. The ultimate resolution would be to have a law which disallows Williams Marketing (or another “marketing” companies) to represent buyers without external representation. Onsite marketing companies represent the interest of the developer first and foremost.

    Here’s another excerpt about one’s dealings with Williams Marketing and Olive8:

    “No problem, I can understand how the folks at Olive 8 lured you to sign a contract with their agent by offering you one of their “exclusive slots”.

    I had a buyer/friend who as we headed to our scheduled meeting with the builders agent, pulled a fast one on us stating that if we showed up together with me as his agent, that he would be in a lottery to hope to purchase one. HOWEVER, if she (sellers agent on site) represented him, that she would guarantee him a unit.

    We both agreed that this was a shady sales tactic on their part, but as we discussed his options, I told him that if he truely wanted to purchase in that building, that he might want to take her guarantee. He did purchase with her, thereby losing his saving of (40% of my commission) and leaving me out of the loop.

    I was bummed that I wasnt able to help in his deal as he is a friend and has purchased many times with me. Left a bad impression of the sales staff at Olive8.”

  • Ben

    Matt, I’m not aware of any of the condo projects in Seattle being flat fee. The projects offer full commissions to the buyers agent (e.g. 3%).

    But, that could decrease to .5% if a buyer is not accompanied by, or registers their agent, on their first visit to the project.

    Not sure how they do things in the suburban developments.

  • Ben

    Matt, I’m not aware of any of the condo projects in Seattle being flat fee. The projects offer full commissions to the buyers agent (e.g. 3%).

    But, that could decrease to .5% if a buyer is not accompanied by, or registers their agent, on their first visit to the project.

    Not sure how they do things in the suburban developments.

  • secondclasscitizen

    I had the same experience at Olive 8 as the others above, I used my agent and entered the (rigged)lottery. As I live in a downtown condo where several neighbors were also involved in their purchases that opening weekend….they all walked out with their choices at the opening bell….and I commented on how lucky they were. They said I should have worked with the sales manager on the “inside”.

  • secondclasscitizen

    I had the same experience at Olive 8 as the others above, I used my agent and entered the (rigged)lottery. As I live in a downtown condo where several neighbors were also involved in their purchases that opening weekend….they all walked out with their choices at the opening bell….and I commented on how lucky they were. They said I should have worked with the sales manager on the “inside”.