My wife and I are considering building a tract home with Meritage. I am concerned about what costs to expect when I sell my existing home and sign a contract to build a new home.

I know the seller generally pays the Realtor commission, but is this true when you build a house as well?

Does the builder (as a general rule) pay the Realtor commission on behalf of the buyer at closing? The builder has recommended a Realtor willing to split their 6% commission to 3% for the sale of our existing home and 3% for the building of our new home?

I am skeptical of their angle as I’m sure there is an angle and would be surprised if other independent agents would not agree to the same arrangement.

Do you think it’s wise to have a Realtor in my corner for the building of a new home and what do I to think about when it comes to paying commissions?

Thanks for your advice!!

Greg

Hi Greg,
You don’t need a Realtor or real estate agent to buy a home in a housing development that has its own sales force.

Photo courtesy of Meritage Homes

Here is a FAQ from Meritage.
“Q: Do I need a Realtor to buy a new home?

A: It isn’t necessary to have a Realtor, as our Sales professionals are extremely knowledgeable about our homes and communities, financing, and the entire home buying process. However, we welcome real estate professionals and are happy to work with them to find your dream home. If you are now working with a Realtor, or choose to do so, your Realtor must accompany you on your first visit to a Meritage community in order to register your agent/client relationship.”

But Greg, if you need a Realtor to sell your existing home (and you probably will need one and probably should use one) and the builder/developer will pay ½ of the typical 6% on the new home, and you get the Realtor for your existing home @3%, it sounds like a good deal to me.

Typically, sellers pay commissions, even though it’s actually the buyers money.

Looks like you’ll be on both ends of that little conundrum, being both a seller and a buyer.

But remember, everything in real estate is negotiable, everything!
Carl

• deductions for mortgage interest
• deductions for real estate taxes
• capital gain exclusion for the sale of a principal residence

Combined with the home buyer tax credits available for qualified purchases of principal residences by April 30, 2010–up to $8,000 for first-time buyers and $6,500 for repeat buyers–the tax savings from home ownership make buying a home today a rewarding financial decision…Read the whole article HERE

(2) Conditions are ideal to purchase a home. Here’s why:

• Interest rates are at historical lows
• Home prices have decreased
• There is a large inventory of homes on the market to choose from.
• FHA has excellent loan programs qualified buyers.