I was out visiting properties with a client recently when we stopped by to visit a new construction development project in the South Bay area. While I was perusing the marketing materials, a couple walked into the sales office and was greeted by one of the sales agents at this particular new development. I didn’t pay much attention to the couple until I overheard a brief exchange they had with the sales agent. After the usual introduction pleasentries by the sales agent, the couple mentioned that they were working with a realtor and asked whether they needed their agent to be with them. The sales agent politely apologized and said that since they already walked into the sales office WITHOUT their agent, the sales team could no longer offer a broker cooperation commission. Mind you now that the couple had just stepped into the sales office and had not been there for more than a minute. At that point, the couple hadn’t even registered or filled out any paperwork. But now the couple was being told by the sales agent that they could not be represented by their realtor.

I’m a bit uneasy about the sales agent to denying a potential buyer the opportunity to be represented by a realtor before they register or view a model. Especially when the potential buyer asks upfront about being represented by an agent. The couple simply walked in and asked whether they needed their agent to be with them. But as soon as they walked in the door, their ability to be represented by their own agent vanished. Now this troubles me on several levels.

First, in my imaginary perfect world, the sales agent would have replied to the couple’s inquiry by informing them that they needed to be accompanied by their agent on their first visit. And since they had not yet registered or seen a model, they should return later with their agent. Instead, the sales agent put the couple in a precarious situation by telling them they could no longer use their realtor. New construction developments have a rule that realtors must accompany their clients on the first visit in order to be paid a commission. I have no problem with that rule; obviously the developer does not want to pay a broker cooperation commission if it can be avoided. Its less money out of the developer’s pocket. But when the potential buyer asks about it upfront, they should be allowed to leave and return with their agent. The couple on that day could have simply walked out and returned another day with their realtor, hoping that the same sales agent isn’t there. But that would put the couple in another ackward situation if the same sales agent was there. I’m a bit troubled by the fact that popping your head in to ask about using a realtor constitutes a “first visit.”

Next, if the couple was really interested in purchasing in that devleopment, they would have the unenviable job of telling their realtor that they walked into a project without him or her, and now they could no longer be represented. They actually could still be represented by their realtor but the couple would have had to pay for those services directly. And I doubt most buyers would be willing to do such a thing. Maybe the agent should have done a better job by informing the couple about how new construction projects operate. That if they walk in without an agent on their first visit, they lose their right to be represented. That belies my main gripe, which is this . . .

The sales teams at new construction developments will tell you that don’t really need to be represented by an agent. The sales team can represent you too, is what they will say. But let’s be realistic here . . . the sales team represents the developer. And the only thing the sales team really cares about is selling you a property. That’s how they get paid. Are they going to be looking out for your best interest? Maybe . . . but, probably not. Will the sales team tell you what the most recent sales prices were? Probably not. But that’s probably good information to have when deciding to make a purchase. The sales team will tell you that you can get thousands of dollars worth of incentives. But will the sales team tell you that the price has been marked up to offset the incentives? Probably not. Will the sales team tell you about the good AND the bad points about the complex and surrounding community? Probably not. The sales team will sell you on the great features of the complex and will leave everything else for you to read in a disclosure. You can probably find that on page 32, paragraph 15(d), line 3 of the contract. Its the sales team’s job to sell units at that complex. But is that unit, complex, neighborhood, area right for you?

And that, in a nutshell, is what bothers me most about what transpired that day when the unwitting couple walked in without their agent. Maybe this was an isolated incident, just at this location, or just with this sales agent. But now, the couple could no longer be represented by their realtor. Someone who is looking out for their best interest, and not the developer’s. So the moral of this story is that if you are thinking about going to visit a new development, make sure you go with your realtor. On the first visit. Before you walk in the door.