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I went under contract to get my home built and it should be done ~early December. The base price of the model I selected is ~$285k. After builder upgrades (mainly structural, but not all) the purchase price of the home is closer to ~$300k.
My realtor is saying that she will only get commission off of the $285k. She tried to explain this by saying she doesn't get commission on the upgrades... after I asked her more questions about this, she said she'll talk to her broker.
Is this so? It makes NO sense to me whatsoever... the purchase price on my home is $300k; why would her 3% commission only apply to $285k?
Builders generally price their upgrades without compensation included in it, but it just depends on the agreement that the builder and agent have or what is offered on the MLS. I do my commissions on the initially negotiated price. If my clients decide to upgrade as we go along there isn't any additional compensation so that way the builder doesn't need to factor that in pricing.
The commission is 3% off the base price or $8550 - so if you spend $15,000 or $40,000 or $2,500 on your options, none of that has your agent's commission built into your final purchase price. It's cost + profit for the builder.
That isn't what happened when we bought in Raleigh in 2013. The agent was paid her commission on the full purchase price, including commissions. She WAS surprised that she was also reimbursed for the referral kickback she had to give the agent who referred her to us. Toll Brothers was generous that day, I guess.
My realtor was paid commission for the full contract price including upgrades. But I suppose it varies by location. Not sure what the question really is though - she's not asking you to pay the difference is she? If she gets paid off the base in your area, then that's what she gets paid.
I went under contract to get my home built and it should be done ~early December. The base price of the model I selected is ~$285k. After builder upgrades (mainly structural, but not all)
Thanks!
Curious as to what a structural upgrade would be.
The upgrade commission would depend on agreements between builder and Realtors. In this case the Realtor would probably only be getting $225. If they negotiated the upgrades and went with you to the upgrade place to help pick out I would agree that they should get some benefit.
Curious as to what a structural upgrade would be.
The upgrade commission would depend on agreements between builder and Realtors. In this case the Realtor would probably only be getting $225. If they negotiated the upgrades and went with you to the upgrade place to help pick out I would agree that they should get some benefit.
Structural upgrades could be many things.
Exterior elevation.
Maybe bumping a room out 2' or 4'.
Fireplaces.
Bath or Kitchen optional layouts.
Finish an attic space, or basement.
Basically, anything that would have to be in the permit package when the builder applies for the permit.
Your first mistake was using a realtor for a new build home buy. All you needed was a lawyer on your side.
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