Sunday, August 5, 2018
By David  Fresquez
Home Buyer Alert: Why You Never Buy A New Home Without An Agent

You would be amazed by some of the things I have heard from builder representatives in my 15 years of being a licensed agent. As a former builder representative, I am going to share with you some 6 reasons why it is absolutely necessary to have an agent represent you when you are buying a new or resell home in any state.

  • Dual Agency
  • Review Contracts and Disclosures 
  • Keep Builder On Schedule 
  • Recognize "Red Flags"
  • Due Diligence on Builder
  • Buyer Incentives

When you enter into an agreement with a real estate agent, the agent becomes a fiduciary. A fiduciary is a person who holds a legal or ethical relationship of trust with one or more other parties. Real estate fiduciary duties, in simple terms, define how an agent should work on the behalf of a client. 

The builder's representatives is a fiduciary for the builders, first then the buyer second. So when it comes to negotiations and information the builders representative walks a "fine line" of what information should or be not be shared with the buyer and if to be shared, when to be shared.

When you are represented by one agent or a builder, that is called Dual Agency. Dual Agency is actually considered illegal in some states. 

The National Association of Realtors (NAR) identifies six main duties of a real estate fiduciary:

  • Loyalty
  • Confidentiality
  • Disclosure
  • Obedience
  • Accounting
  • Reasonable care


This simply means that an agent should always be working for your best interests, not anyone else’s or their own. This also means avoiding any conflicts of interest. An agent’s duty of loyalty prohibits him or her from accepting employment from any person whose interests compete with, or are adverse to, yours as the buyer or seller. An example would be for an agent to purchase a property listed with his or her company then immediately sell it for a profit.

A Builders Representative will always be loyal to the Builder/Employer First.


It’s imperative for an agent to keep a client’s information confidential. The information that should be kept confidential would include anything that might impact your bargaining position. An example would be disclosing to a buyer that a seller,  represented by that agent, needs to sell quickly. This, however, does not include an agent disclosing material facts concerning the condition of a property.  To do so would constitute a misrepresentation and would impose liability on both the agent and the seller.

The Builders Rep is an employee of the builder and what the builder does not want to tell you, he is obligated and paid not to tell you.


When buying a new home, there is a mountain of paperwork written by attorneys and allies of the builders not allies for the consumer. The entire contract, albeit legal protects the builder first. Why? Becuase thats what the lawyers are paid to do. Understand the laws and protect the their client. The builder.

An agent is obligated to disclose to his principal all relevant and material information that the agent knows and that pertains to the scope of the agency. Material facts are those that if known by the seller or buyer may have caused them to change their minds. 

A Builders Rep will only disclose the legal minimum of information. They will not disclose more than they have to.


Your agent must obey your instructions. These instructions must, of course, be legal and in accordance with your contract. The agents' role is to make sure the builder adheres to contractual obligations and timelines.

The builders representative must obey his superiors and management policy.


Your agent must account for all documents and funds related to the transaction. There must be a reporting of all the pertinent documents and financials. Your agent will provide information not found in the information provided by builders.

The builder will only give you what legally they are required to give you.

Reasonable Care

What happens if their was a gas leak on site during construction or a flood occurred during construction. Some builders wlll not disclose such information if they deem the information irelevent. However the agent, is required to find out more information and details of the incidents.

The phrase is open to interpretation; most often being defined in a courtroom. The NAR describes it as a “duty to use his superior skill and knowledge while pursuing his principal’s affairs. This duty includes an obligation to affirmatively discover facts relating to his principal’s affairs that a reasonable and prudent real estate broker would be expected to investigate.” It's akin to the professionalism expected by patients of doctors or clients of attorneys. 

Do agents ever fail in their fiduciary duty? Unfortunately, yes. Not living up to these duties can cause lots of problems for all parties. As an agent, it's important to hold oneself accountable and focus on the best interests of clients. 

Many breaches of fiduciary duty can occur around full disclosure. And it's not limited to the property itself. A client shared a story about her first home purchase and the breach that occurred. The situation revolved around the state DOT planning to expand a road near the townhome the individual purchased. The DOT did not have imminent plans to begin the road work, but this part was disclosed. What wasn’t disclosed was that many of the units within the neighborhood had already been purchased by the DOT. This meant that when she was ready to sell years later, the property value had decreased. The listing was less desirable. Had she known the DOT already owned many of the units, she would have decided not to purchase.

Due Diligence on the Builder

Would it be important to know if the builder you were buying a new home had a reputation of poor workmanship or poor customer service? Heck yes, its important! Do you think a builder will you that they have been sued or fined?? No they won't. But they will sell you a house. 

Stories like these are probably too common. Trust is an important part of the agent-client relationship. That's why we work so hard to do everything right. 

 Currently, there are over 75 new home communities being built in San Diego County and many builders are giving Big Incentives to entice buyers to their properties without their agents. There is a good reason for this.

For a list of Builders Incentives, email for a complete list.

Need a Home to sell before you buy that new construction home? No problem, we have a created a "Trade In" Program for sellers who need to sell and buy a new construction home. Email

Did you know you transaction when you Buy or Sell can save lives here in San Diego County? Find out more infrormation below by filling out the form and finding out how your transactions means so much to those that truly need the help!!


David  FresquezDavid Fresquez
Empowering The Community With Every Home Sold