We're about to close on some land and we're looking at a small custom builder in the area to build our house. Our realtor for helping us buy the land has just assumed they will be our agent and represent us with the builder. They told us not to meet with any builder unless they sign the agreement to pay their agent fee.

1. We never agreed to use them going forward after buying the land because honestly we don't know when we'll actually start the build. It could be a year, who knows. Are we under some obligation to use them as our agent? We were thinking we would just work directly with the builder? We did already agree that they can be our agent for selling our current home.

2. Is there a benefit of using an agent? I could definitely see the benefit if going with a big named builder, but this is a small local builder, but wondering if we're missing something?

Any advice would be greatly appreciated! We just didn't want to use a realtor if we don't absolutely need one and drive the cost up even more because then the builder will have to pay the realtor's fee. Also, I think we would prefer dealing directly with the builder since he's very hands on and not having to go through a realtor if we don't have to.

Thanks!!

Agree completely with Mazag. The biggest advantage to using an agent with new construction is letting them do all your nitpicking for you. There is inevitably going to be things that get screwed up or you're not ok with and having agent to send those emails or talk with the builder is helpful.

I would make it clear with your Realtor what your needs are and that they need to see the property under construction on a consistent basis. Don't let them just collect a check at closing and do nothing once the contract is executed.

TxAggieGirl08 said:

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We're about to close on some land and we're looking at a small custom builder in the area to build our house. Our realtor for helping us buy the land has just assumed they will be our agent and represent us with the builder. They told us not to meet with any builder unless they sign the agreement to pay their agent fee.

1. We never agreed to use them going forward after buying the land because honestly we don't know when we'll actually start the build. It could be a year, who knows. Are we under some obligation to use them as our agent? We were thinking we would just work directly with the builder? We did already agree that they can be our agent for selling our current home.

2. Is there a benefit of using an agent? I could definitely see the benefit if going with a big named builder, but this is a small local builder, but wondering if we're missing something?

Any advice would be greatly appreciated! We just didn't want to use a realtor if we don't absolutely need one and drive the cost up even more because then the builder will have to pay the realtor's fee. Also, I think we would prefer dealing directly with the builder since he's very hands on and not having to go through a realtor if we don't have to.

Thanks!!

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Based upon your last sentence, it sounds like you have already been in contact with the builder. In that case, I'm not sure your realtor would be the procuring cause for you to use this builder. Unless the realtor introduced you to the builder, they would not be entitled to a commission.

Some realtors are very helpful with dealing with the builder (especially if they sell a lot of new homes), others are just after the 3% commission. All production builders include an average amount in their pricing formula to pay outside realtor. However, if your guy is a small custom builder he probably does not. If you bring a realtor, he is just going to add a 3% line item cost to your cost prior to giving you the final price.

I've actually never heard of a realtor helping with a custom build on your own lot. Unless the realtor has some specialty expertise (i.e. used to be a home builder) then I don't know what value they add to the process other than being a middleman.

Realtors often help with new construction in a big-builder subdivision (KB Homes, etc), but that is a completely different process than a custom build.

If you dont have a good enough relationship with your custom builder, then find a new builder.

as others have mentioned....there doesn't seem to be any reason to use an agent in your scenario, and it's probably too late to engage on (and expect the builder to pay the commission).