The New Home Company: Brokers Beware
The residential brokerage industry is both intensely competitive and yet cooperative. Over decades we have learned to work together to serve the best interests of our respective clientele. As an industry, we compete vigorously for market share, but we are greatly committed to a code of ethics when it comes to our clients and how we share fees for representation.
As developers re-enter the market after a prolonged period of inactivity, I am compelled to express my disappointment with one company’s practices and policies.
A California-based public company called The New Home Company recently invited our real estate professionals to visit one of its new projects in Marin County. The courting included a catered lunch, property tours, collateral, and encouragement for Pacific Union professionals to share its new project with our clients. Broker cooperation, via a referral fee, was part of the proposed agreement.
While visiting the new development, our real estate professionals snapped pictures, then sent emails and text messages to clients from the property tours and lunch. We inform our clients of hot properties instantly, and we do so with a sense of confidence and trust, as well as a deep level of respect for the cooperation in our industry.
One of Pacific Union’s real estate professionals enthusiastically emailed her clients about the new development. One client swiftly visited the project sales office on a Sunday afternoon, toured the available models, and signed the registry for the project.
Shortly thereafter, our client returned to the property with our real estate professional and was surprised to see that there was not a line on the registration form stating that she was represented. Pacific Union accompanied our client to meet with the sales team the next day and had an experience that was completely opposite of the catered lunch described above. In short, Pacific Union was asked to leave, with the explanation that The New Home Company “had this covered.”
To make matters worse, The New Home Company lost our client’s paperwork, and as a result she lost her place in line to select a unit not once but twice. Since our clients always come first, we remain active in managing her interests; our real estate professional is involved behind the scenes, securing financing, reviewing documents, and so on.
The New Home Company is refusing to recognize Pacific Union as procuring cause for compensation or representation. I find it alarming that The New Home Company courted Pacific Union’s interest in its new development, encouraged our client engagement, then proactively froze us out for our advice, recommendations, and guidance.
Over the past five days, I have personally called, emailed, and sent text messages to the local salesperson in hopes of discussing the situation. Her only reply states and restates The New Home Company’s policy.
I have asked for an executive’s contact information and have been told on numerous occasions that someone would contact me. Before deciding to write about this experience, I reached out again via phone and text message to remind the sales representative that no one from The New Home Company has gotten back to me.
So Pacific Union’s advice for the real estate community is to beware of The New Home Company when it reaches out to engage with your firm. Its sales engine and policy is actually designed to carve brokerages out of the client representation and withhold deserved compensation. This is the exact opposite of how the real estate brokerage industry has, for decades, cooperated with competitors.
– Mark A. McLaughlin, CEO, Pacific Union