You are weighing a brand-new home against an older resale, or you are about to walk into a builder's model home for the first time. Before you do, one thing is worth knowing: in new construction, the most expensive mistake usually happens on that first visit, before you have written an offer or signed a single document.
This page explains why the builder's sales office is set up the way it is, how to keep your own representation without paying extra for it, and how to protect your deposit, your budget, and your rate through a build that can run for months. The rules here are different from resale, and knowing them ahead of time is most of the advantage.
The first-visit rule: bring your agent before you walk in
The friendly person who greets you at the model home is usually called a sales counselor or on-site agent. They are helpful, they are knowledgeable, and they represent the builder, not you. This is not about anyone being unfriendly. It is a structural role. Their job is to get the best price and terms for the builder, and they cannot disclose things that would weaken the builder's position, such as a home that may not appraise at the contract price, or slow inventory that is about to be discounted.
The mechanism that matters here is called procuring cause: the party whose involvement is treated as the cause of the sale. Many builders enforce a first-visit registration policy. If you tour the model, call the sales office, or fill in the registration card without naming your own agent, the builder can record your file as unrepresented. Under their procuring-cause rules, that typically locks the buyer-side commission to the on-site rep, even if you bring your own agent in later. To be clear about what this is: it is builder policy, and policies vary from one builder to the next. It is not a universal law. Some builders offer a short grace window; many do not.
There is a newer layer to this. Since the National Association of Realtors (NAR) settlement took effect on August 17, 2024, you generally sign a written buyer-representation agreement (a short contract that names your agent and sets your agent's fee) before an agent tours a home with you at all. In new construction the builder's payment typically covers that fee, but if a builder ever offers less, the agreement governs who covers any difference, which is worth confirming up front. So getting your representation in place first is now the normal order of operations, not an extra step.
Now the money, because it surprises people. New construction is largely outside the MLS, the shared listing database that governs most resale deals, so builders set the co-op terms (what they pay a buyer's agent) directly. After the settlement, major builders publicly leaned into paying buyer agents; a Builder magazine report described that posture coming from the builders themselves. In practice, the base price is typically the same whether or not you bring your own agent. If you do not bring one, the on-site rep simply keeps both sides of the commission. So your own representation usually costs you nothing.
What that representation buys you is an advocate through the builder's paperwork from start to finish. Lily describes her role in her buyer webinars as working like a lawyer for the buyer through the builder's contract, deposit terms, and closing, someone whose duty runs to you rather than to the builder.
The rule, stated cleanly: bring your agent before your first visit, or at the very least name your agent when you register. That one move preserves everything else on this page.
Who this page is for
You are comparing a new build to an older home and want an honest read on the trade-offs, not a sales pitch. Or you have a builder's community in mind and a model home you plan to tour this weekend. Either way, this page is for you, and it is worth reading before you go rather than after.
Here is the single most important thing to take away up front: in new construction, the costliest mistake buyers make is not a bad offer or a missed inspection. It is walking into the sales office on the first visit without their own representation in place. That one decision can quietly cost you an advocate for the entire purchase, and it happens before you have done anything that feels like buying a home. That is why this page starts with the first-visit rule.
New construction vs. an older home, honestly
There is a lot to like about new. The home is turnkey, so nothing needs renovating on day one. The systems are modern, the home is built to the current energy code, and the appliances and major systems carry manufacturer warranties. In California, a new home almost always comes with rooftop solar. For many buyers that combination is exactly what they want, and choosing it is entirely reasonable.
The honest trade-off is land. New single-family lots are markedly smaller than they used to be. Per the U.S. Census Bureau Survey of Construction and the National Association of Home Builders (NAHB), the median new single-family lot in 2024 was 8,506 sq ft, and about 65% of new lots were under 9,000 sq ft. Land is also the expensive part of the equation here. NAHB reports the median U.S. lot value reached $60,000 in 2024, but the Pacific division, which includes California, had the highest median lot value in the country at $152,000. Older homes often sit on noticeably larger lots for that reason.
None of this makes new construction the wrong choice. It makes it a choice you should make with the trade understood: newer systems and a turnkey home, usually on a smaller footprint, versus more land and character on an older home that may need work. Plenty of buyers weigh that and still prefer new. The goal is to decide it knowingly, not to discover it after the fact.
The builder's contract and the deposit risk
The purchase contract a builder hands you is not the standard California Association of Realtors (C.A.R.) form that buyers see on resale homes. It is an adhesion contract: a take-it-or-leave-it contract written by one side, here the builder's legal team, with little room to negotiate the terms themselves. That is normal for the industry, and it is not predatory, but it means the fine print is written by the builder's side, so someone needs to read it on yours.
The deposit risk follows from how long a build takes. A new home commonly takes several months to build, and these contracts usually have no rate lock built in, so your mortgage rate is not fixed across the build. Lily flagged this exposure in a 2022 webinar: she warned that if rates jumped between signing and closing, buyers who had already put down deposits would rationally walk away and forfeit them, producing a wave of cancellations. By 2024 she confirmed it had played out, with builders responding through price drops and incentives.
When a deposit is at risk, escalation can help, though outcomes are never guaranteed. Lily's brokerage, Centermac Realty, has a broker of record who is a practicing California real estate attorney, so contract review at the brokerage is done with an attorney's eye. Three anonymized examples from her practice show the range of outcomes, all of which were negotiation-conditional:
- A buyer put down about $15,000 on a new-construction lot and changed his mind after about 40 days over workmanship concerns. The builder cited a 30-day forfeit window. Making the cost-asymmetry case, that fighting it would cost both sides legal time and the buyer could go to small claims, drew a callback within about two hours offering a 50% refund.
- Buyers signed for a townhouse with a planned ground-floor bedroom that the builder instead built as a closet. The brokerage escalated in writing to the builder's headquarters, with the broker's legal training behind the letter. Its main office called within about an hour offering a refund or in-development incentives, and the clients chose to stay.
- In another case, the builder substituted a wardrobe for a planned downstairs bathroom. That written escalation drew a binary counteroffer: release the contract without the deposit back, or hold to it as written. The clients chose to stay rather than forfeit.
The pattern is worth stating plainly. A documented, well-argued escalation often moves a builder, but the result depends on the facts and the contract, and no one can promise a specific outcome. What consistently helps is having someone read the contract on your side before you sign, and knowing which levers exist if something is built wrong.
The money mechanics: incentives, upgrades, and recurring costs
Builder-affiliated lender incentives are the first place the real price hides. Builders often tie incentives to using their preferred lender: a temporary or permanent rate buydown (a rate buydown lowers your mortgage rate, either for the first few years or for the life of the loan), or a credit toward closing costs. They frequently fund that incentive inside a higher price, so you want to weigh the whole package, not the headline rate. The sensible rule is to get loan estimates from the builder's lender and from at least two outside lenders, then compare the APR (annual percentage rate, which folds fees into a single yearly rate you can compare across offers) and the total cost over how long you actually expect to keep the home.
Design-center upgrades are the second. Builder design centers run as profit centers, and their upgrades typically carry a steep markup over outside pricing. There is nothing wrong with buying upgrades, but rolling them into the mortgage means you finance that premium over 30 years, which is worth doing on purpose rather than by default.
Lot premiums are the third. Better lots (corner, view, or backing to a greenbelt) carry a premium on top of the base price. That may be money well spent, but it is a line item to see clearly.
Then there are the recurring costs a new community tends to carry. A homeowners association (HOA) is very common; per NAHB and Census data, about 67.9% of new builds carry one. Mello-Roos is also disproportionately likely on new developments. It works through a Community Facilities District, or CFD: a special tax district formed to fund a new development's infrastructure, such as roads, schools, and parks. That special tax is billed on top of California's roughly 1% base property tax rate, and it can run for decades. Because new communities are exactly where this shows up, it is worth understanding before you fall for a floor plan. For the full picture, see the Mello-Roos guide. Compare all 38 cities side by side on the Bay Area property tax map.
New construction still needs diligence
Brand-new does not mean skip the inspection. You can and should get an independent inspection, ideally pre-drywall (while the framing, wiring, and plumbing are still visible) and again at the final walkthrough. Crews build fast and to minimum code, and the municipal inspections plus the builder's own quality checks do not replace an inspector working for you.
The warranties matter too, and they stack. California's SB 800, known as the Right to Repair Act, generally gives homeowners up to 10 years to bring claims for latent defects, meaning defects that were not reasonably visible at first. Separately, most new homes carry an industry-standard warranty known as 1-2-10: 1 year on workmanship and finishes, 2 years on major systems such as plumbing and electrical, and 10 years on major structural defects. Knowing which clock covers which problem is half of using a warranty well.
Solar is the last piece, and it is specific to California. The state's 2020 solar mandate, set by the California Energy Commission, means a new Bay Area home almost certainly comes with rooftop solar. What matters is how you get it. If the system is owned, its cost is built into the price and it is yours. If it is leased, or on a PPA (a power purchase agreement, where you buy the power the panels produce rather than owning the system itself), the terms travel with the home and change the real cost of ownership. That needs to be sorted out during escrow, not discovered after you close.
New construction in Fremont: what you will find
Fremont is one of the most active new-construction markets in the East Bay, and a useful worked example of how the first-visit rule plays out on the ground. Here is the landscape as of mid-2026.
- Toll Brothers at Metro Crossing, offering contemporary flats and condos, with sub-collections that have included Chancery Lane, Russell Square, Westbourne Park, Norwood Junction, and Emerson Park, alongside Metro West and Victoria Station.
- Lennar communities, including Innovation and Hartford.
- SummerHill Homes communities, which have included the Locale @ State Street condos, with the Mission Place townhomes opening summer 2026.
Aggregator sites list 100 or more new-construction community listings in and around Fremont, so inventory here is not thin. The point is not any single community: every one has its own sales office and registration desk, and the first-visit rule plays out at each. So decide on representation before you tour the first one, not at the third.
Local depth helps precisely because this market is dense and fast-moving. Across 104 documented closings and more than $115M in total volume, 91 on the buyer side, Lily's history is concentrated where this new construction is: 33 closings in Alameda County and 13 in Fremont itself. That is on-the-ground familiarity with the same sales offices and the same paperwork you will face.
What this means for you. The practical takeaway is short. Bring your agent before your first visit to a model home, or name your agent when you register. Because the builder typically pays the buyer's side out of its marketing budget, having an advocate through the contract, the deposit terms, the lender package, and the inspections usually costs you nothing. Going in unrepresented does not save you money; it simply hands both sides of the commission to the builder's rep and leaves you reading an adhesion contract alone.
In her webinars, Lily puts it about as plainly as it can be put: bring me in before your first visit, the builder typically pays my side, so you typically get an advocate through the whole contract at no cost to you. If you are even thinking about touring a new community, that is the moment to reach out, before the registration card, not after.
If you want a second set of eyes on a builder's contract, a deposit already at risk, or just an honest read on new versus resale, call or text me at (415) 910-3958. I work with buyers in English and Russian. I have been in real estate since 2007 and California licensed since 2016 (Cal DRE #02010731), much of it in exactly these East Bay communities. No pressure, no sales pitch, just a straight answer to whatever you are weighing.
New Construction FAQ
Do I need a realtor for new construction?
You are not required to, but it is almost always in your interest, and it usually does not cost you extra. The builder's on-site agent works for the builder, so bringing your own agent gives you someone whose duty runs to you through the contract, the deposit terms, and the inspections. Because the builder typically pays the buyer's side, that representation generally comes at no cost to you (your buyer-representation agreement sets the fee, and the builder's payment typically covers it). If you want to talk it through before you tour anything, reach out and I will walk you through how it works.
What happens if I already visited the sales office without my agent? Can I still be represented?
It depends on that specific builder's policy and on whether procuring cause has already attached to the on-site rep. Some builders offer a short grace window where you can still name your own agent; many do not. It is worth checking immediately rather than waiting, because the sooner you sort it out, the more options you tend to have. Send me the community name and roughly when you visited, and I will help you find out quickly where you stand.
Does the builder pay my agent's commission?
Typically yes, from the builder's marketing budget, as long as your agent is registered or with you on the first visit. The base price is usually the same whether or not you bring your own agent, so if you do not, the on-site rep simply keeps both sides of the commission. In practice that means your own representation usually costs you nothing. Since the NAR settlement took effect in August 2024, you will generally sign a short buyer-representation agreement with your agent first.
Can you negotiate with a builder?
On the base price, usually not much, because the builder protects the appraised value of the other homes in the community by holding that number. Where there is real room is on upgrades, closing-cost credits, financing incentives, and any already-built, unsold homes the builder wants to move, especially when demand is soft. Knowing which lever to pull is most of the skill here. Tell me the community and I will tell you where the room usually is.
Is new construction cheaper than an existing home?
Not necessarily. New single-family lots tend to be smaller, land is the expensive part in the Bay Area, and the sticker price often does not include the design-center upgrades most buyers end up wanting. New communities also more often carry Mello-Roos and an HOA, which add to your monthly cost. Compared side by side, an older home on a larger lot can pencil out very differently, so it is worth running the real all-in numbers rather than comparing headline prices.
Do I need a home inspection on a brand-new house?
Yes. Brand-new does not mean flawless. Crews build fast and to minimum code, and the city's inspection plus the builder's own checks are not the same as an inspector working for you. The best coverage is an independent inspection pre-drywall, while the framing and systems are still visible, and again at the final walkthrough.
Who pays for defects found after closing?
That is what the warranty structure is for. Most new homes carry a 1-2-10 warranty: 1 year on workmanship and finishes, 2 years on major systems like plumbing and electrical, and 10 years on major structural defects. Separately, California's SB 800 generally gives you up to 10 years to bring a claim for latent defects, meaning problems that were not reasonably visible at first. This is general information, not legal advice; if a defect is serious, your agent and, where needed, an attorney should look at your specific contract and warranty.
Does a new California home come with solar?
Almost always. California's 2020 solar mandate, from the California Energy Commission, means a new Bay Area home is very likely to come with rooftop solar. The detail that matters is how you get it: owned and included in the price, leased, or on a PPA (a power purchase agreement, where you pay for the power the panels produce rather than owning the system). Confirm which one it is during escrow, because it changes the real cost of the home.
Should I use the builder's preferred lender?
Only after you have compared it honestly. Builder incentives such as a rate buydown or closing-cost credit are often funded inside a higher price, so the deal is not always as good as the headline. Get loan estimates from the builder's lender and at least two outside lenders, then compare the APR and the total cost over how long you actually plan to keep the home. Sometimes the builder's offer wins, sometimes it does not, and the only way to know is to line them up.
What is Mello-Roos and why does my new home have it?
Mello-Roos is a special tax charged through a Community Facilities District (CFD), a district formed to fund a new development's infrastructure like roads, schools, and parks. It is billed on top of the roughly 1% base property tax and can run for decades, which is why it shows up so often on brand-new communities specifically. It is not a reason to avoid new construction, but it is a real monthly cost to factor in before you fall for a floor plan.