Buying New Construction in Los Angeles -- What Buyers Need to Know

LA/OC New Construction -- Spring 2026

Spring 2026 data. Figures approximate. Not a guarantee of future performance.

Why You Need Your Own Agent for New Construction in LA

The most common misconception in new construction: "the builder's sales rep will take care of me." They will not. The builder's sales representative is a licensed agent of the builder. Their fiduciary duty is to the builder. Their job is to sell the builder's inventory at the best price and terms for the builder. They will be professional, helpful, and knowledgeable about the community -- but they are not on your side of the table.

On a $1.5M new construction purchase, the stakes of having no independent representation are significant: builder contracts that heavily favor the builder, upgrade packages priced at high margins, incentives that may not be what they appear, and warranty provisions that limit your recourse after close. Having your own agent -- at Roman's flat fee of $9,250 rather than 2.5% -- costs less than it saves in most new construction transactions.

Builder Contracts -- What Makes Them Different

Builder purchase contracts are not the California RPA (Residential Purchase Agreement). They are builder-drafted forms that heavily favor the builder in virtually every provision. Key differences from a standard resale transaction:

Limited cancellation rights. Builder contracts typically allow cancellation only in narrow circumstances -- financing failure, sometimes title issues. Unlike the RPA where you have standard inspection, loan, and appraisal contingencies, builder contracts often have shorter contingency windows or require specific conditions for cancellation.

Change order terms. Any modification to the base model requires a change order that the builder can price at their margin. Change orders are often the highest-margin element of a new construction transaction. Understand all change order terms before signing any builder contract.

Mandatory arbitration. Most builder contracts require binding arbitration rather than litigation for disputes. This limits your legal options after close. Roman reviews every arbitration clause and advises on implications before any builder contract is signed.

Builder warranties vs. CA implied warranty. California implied warranty of habitability provides some buyer protection independent of builder warranty programs. Understanding what the builder warranty covers, for how long, and how to make claims is essential review before signing.

Builder Incentives -- What They Actually Mean

Builders offer incentives to move inventory: closing cost credits of 3-6%, upgrade allowances of $20,000-$60,000, and rate buydowns ("2-1 buydown," "permanent rate reduction"). These are real -- but they require scrutiny before you decide they are good value.

Closing cost credits: A 3% closing cost credit on a $1.5M home is $45,000 -- meaningful. But many builders build the credit into the list price. Compare the builder's list price to a resale of similar size and finish in the same community before deciding the credit is "free money."

Rate buydowns: A "2-1 buydown" reduces your rate 2% the first year, 1% the second year, then reverts to market rate in year three. Model the full 30-year cost, not just the first two years. In some rate environments, a permanent half-point reduction is worth more than a 2-1 buydown.

Upgrade allowances: Builder upgrade packages are priced at high margins. It is often more cost-effective to purchase the base model and upgrade after close with your own contractor at market rates. Roman evaluates builder upgrade pricing on every transaction and advises on whether the allowance represents genuine value.

New Construction Inspections -- Three Stages

New construction should be inspected at three stages. Most buyers only know about the final walkthrough -- which is too late to address structural and mechanical issues that are now behind walls and finishes.

Stage 1 -- Pre-framing / foundation inspection: Before framing is erected. Verifies foundation pour, rebar placement, and concrete curing. Rarely done by buyers but provides the deepest structural assurance.

Stage 2 -- Pre-drywall inspection: After framing, plumbing rough-in, electrical rough-in, and HVAC ductwork are complete but before drywall is hung. This is the most valuable new construction inspection -- it is the last opportunity to see the structural framing, mechanical systems, and installation quality before they are covered. Costs $400-$600 and can reveal framing issues, plumbing installation errors, and HVAC sizing problems that would be impossible to see at final walkthrough.

Stage 3 -- Final walkthrough inspection: Before close, after completion. Verifies all systems are operational, all finishes are complete, and all punch list items from builder walkthrough are resolved. Roman schedules and attends all three inspection stages on every new construction transaction he handles.

How the Flat Fee Applies to New Construction in LA

Builder communities that participate in buyer broker compensation programs allow Roman to charge his flat fee against the builder-offered compensation -- typically 2-3% in active LA and OC communities. The difference between the builder-offered amount and Roman's $9,250 flat fee is negotiated as a closing cost credit, the same mechanism as resale.

In new construction communities where no buyer broker compensation is offered, the buyer is responsible for Roman's flat fee directly. Even in this scenario, $9,250 vs. $37,500+ for a traditional 2.5% agent on a $1.5M new construction transaction represents substantial savings. Roman discusses the specific builder's compensation program at the initial consultation for any new construction target.

Frequently Asked Questions