Real Estate Commission on home being built? (how much, lawyer)

[Silverfoxy]

My husband and I are building a new home and when we sat down with the builders, they asked how we heard about them. I mentioned that in passing I had asked a real estate agent if she could recommend a builder. Well, when we signed our building contract, a 2% charge was added to our end of it and they called it a Real Estate commission to be paid to that agent. We were taken aback as it amounted to $18,000., but were told that it was standard practice. We signed the contract, but felt that we had no other choice. We were not under contract with that agent and want to know if this is legal? I would sure love to make that kind of money for just suggesting a name.

[kingcopper]

You shouldn't of signed the contract! You were not bound until then and I would be pissed also.

[ttyl1979]

It was procuring cause. If the agent hadn't mentioned it...then you might have used another builder. The charge is valid. HOWEVER you should have negoiated it in the price with the builder. You should have used an agent as your representative to fight for you....esp. since you are paying for it.

[Silverfoxy]

Honestly, we were taken so by surprise and we did complain. We were left with the inpression that we didn't have any wiggle room or choice. We had gone through many months of planning with these builders and this particular item was sprung on us without warning. I'm going to talk with a real estate lawyer tomorrow and see if anything can be done.

[tomocox]

Silver, I am a Realtor and Broker-Owner of a RE/MAX office. I see many facets to this situation where no one, including yourself is blameless, and yet everyone acted in good faith. I can't possibly take a side in your situation because I don't know the entire situation.

What I can say is to others contemplating a similar situation. Realtors have failed to provide value, so you felt you could negotiate this contract on your own attempting to save money. The contractor got a job because of a Realtor's referral. The Realtor deserved some compensation, how much? well that is the question. I believe they should have deserved an amount fully equal to the value provided. That value could have been simply in the fact that you got the very highest quality of builder available, or maybe not.

Folks, please don't condemn Realtors, builders, or homebuyers, simply because they are. Investigate value delivered and reward that value!

[johnsonkk]

For a $900k purchase, being pushed and left with little or no choice is not a good position to be in. Glad that you're seeking legal advice since the amount is sizeable. The point of the original poster is that the real estate agent didn't appear to do a lot of work for getting a check for $18k. The "amount fully equal to the value provided" certainly doesn't appear to be $18k.

[sellinggreaterlouisville]

SF,

As you know my father is a builder and I can only echo what Stephanie and Tom said. This agent was the procuring cause. It sounds like the agent was never given a chance to earn the commission. Usually agents will guide their clients through the home buying process and negotiate on their behalf with the builder. Not that it helps either, but typically the agent is paid 3%

jojnsonkk -- I don't think anyone here would disagree with your statement.