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Why Buying Straight From A Developer Is Not In Your Best Interest

Will The Defendant Please Rise?

As new developments such as FENDI, Ascent, and Optima McDowell Mountain Village go up for sale in Scottsdale, did you know it is NOT in your best interest to buy straight from the developer? In fact, there are TONS of reasons why you should NOT go straight to a developer. In this edition of LUXE BLOG, we will go through some (of the many) reasons why.

First off, going directly to a developer does NOT save you money off the purchase price. While most end-user real estate consumers may think it does, it does NOT. For a number of reasons, a new home or condo developer cannot legally offer incentives to potential buyers via encouraging them not to use their own real estate agent. In fact, as of 2022, DUAL AGENCY is ILLEGAL in eight states. Just because it is legal in Arizona does NOT mean it is safer. More on that later.

Without making this blog too long, the bottom line is that working with an experienced OUTSIDE AGENT is a very smart idea when buying pre-construction and/or new real estate.

P.S. Developers love (and need to) participate with the local brokerage community. And this is even MORE true during a tough market like we are in as of late 2022.

Disadvantages Of Going Directly Into A Developer

  • You almost always sacrifice your LEGAL right to have your own representation
  • You WILL be stuck in a DUAL AGENCY and in a DUAL AGENCY the agent's loyalty always favors the seller
  • The on-site sales team represents the SELLER (developer) first and foremost
  • Developer agents have agendas to sell certain pieces of inventory over others
  • Developers cannot lower prices of new properties based on buyers not using Realtors
  • Outside agents can provide you with an UNBIASED opinion on the project
  • Developers will NOT attend your closing
  • An on-site agent has ZERO incentive to teach you about the overall market and pricing trends
  • And there's a million other reasons but these should be enough to wake ANYONE up


Rendering of Optima McDowell Mountain Village.

New Developments Such As Optima McDowell Mountain Village Are Popping Up All Around Scottsdale

What Is Dual Agency?

A dual agency occurs when a real estate agent or brokerage represents both the buyer and the seller in a real estate transaction. This can create a conflict of interest for the agent, as they are expected to act in the best interests of both parties. While dual agencies are legal in some states, it is important for buyers to understand the potential risks and drawbacks.

One concern with dual agency is that the agent may be more focused on closing the sale than on advocating for the best interests of either party. For example, an agent may be more inclined to push for a higher sale price for the seller, even if it is not in the best interests of the buyer. Similarly, the agent may be more inclined to negotiate on behalf of the seller, rather than advocating for the buyer to get the best deal possible. Additionally, this can happen when buying NEW real estate from a developer.

Another concern is that the agent may not be able to fully disclose important information about the property or the seller to the buyer. This is because the agent is required to keep certain information confidential, in order to protect the interests of both parties. This can make it difficult for the buyer to make an informed decision about the property. It can also result in them paying more for a property than they otherwise would have.

States Where Dual Agency Is Illegal

As of 2022, dual agency is illegal in eight states. Those states are:

  • Alaska
  • Colorado
  • Florida
  • Kansas
  • Maryland
  • Texas
  • Vermont
  • Wyoming

The takeaway. Just because Dual Agency is allowed in Arizona doesn't mean it's a SMART idea to get caught up in one. Especially when buying a new piece of real estate.

Advantages Of Using Williams Luxury Homes

Williams Luxury Homes is well respected for its experience selling new real estate developments in Arizona. We keep it VERY REAL. Why? Because our loyalty is to the consumer, not developers. Some of the advantages of working with us when buying new real estate are:

  • We know the market VERY well and tell it like it is
  • Detailed PRICE PER SQUARE FOOT analysis is the name of our game
  • Should you want, we will educate you on COMPETING projects
  • We will tell you what units don't do well in resale
  • We'll keep you updated THROUGHOUT the construction process
  • We can help you choose what upgrades payoff most during a resale
  • Our agents have sold hundreds of millions worth of pre-construction real estate

Thanks for taking the time to stop by our little corner of the internet. Should you want to confirm what we've pointed out in this article, feel free to read this Forbes article on Dual Agency. Namaste.

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