Does A New Home Builder Have To Pay Real Estate Agents Commission?

Sometimes, first time buyers are tricked into thinking that if they deal directly with the new home builder and don’t go through a real estate agency that they will save some money on their project because they won’t have to pay the realtor any commission. This is actually not the case, as it is the builder who is required to pay the realtor – not the buyer.

If you have ever been to visit a model home at the site of a brand new development, you will know that the builders employ their own realtors to answer your questions and show you around. Many buyers, however, are tricked into believing that this realtor is a neutral entity who is just there to make everyone’s lives easier – this is not true, as they are trying to do business according to the builder’s best interests.

By bringing your own realtor along with you, on the other hand, you are ensuring that your own needs are met should you decide to buy, as they will play a large role in the agreement that is consequentially drawn up. It does, however, mean that the builder will be required to pay that realtor a commission (often based on the base price, without upgrades, of the property) for essentially getting the sale.

At the end of the day, having new home builders pay realtors commission instead of the buyers is just good business. It helps the two to craft a mutually beneficial relationship – the realtor makes some money and the builder saves money on marketing costs – and ensures that the best interests of the buyer are always kept in mind.