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Building a home - so confused!
DH and I really did our homework and thought that we knew everything that we needed to...guess I was wrong! Can you help explain a few things?
We're working with a custom builder. House plans are set, we just need to find a lot. We found a lot (FSBO) which will save us the commission rate. Our realtor called today with his counteroffer and he dropped the price $2,000 but will not pay the commission to our realtor. Does this mean we'll have to pay to commission to her? We found the lot and made the first contact so I don't feel that we need to pay her commission (she wanted to call him to give him our offer instead of us calling directly).
Then, we find out that we'll have to pay 5% commission on the finished house price (excluding the lot). 2.5% will go to our realtor/company and the other 2.5% will go to the other real estate company. Since the lot is FSBO, why do we pay 2.5% of the finished house to the other real estate company (Remax)?
I have a call into both our realtor and builder to help shed some light on this. In the mean time, I'm so confused!
Re: Building a home - so confused!
i have no idea ....but have you asked your builder about lots that are available in the area.? They usully know and/or can find out what is available. We are building a house and our builder just closed on our lot yesterday. he gave us a list of all the lots available...it was easier because he included the lot in the price of the house. Since he's a reputable builder in the area he got the lot from a woman for a steal bec. she was super old and it was just given to her and she didn't want to pay for it/maintain it, etc. so literally if he didn't tell us about this lot we probably would not have been able to even build a house....we never thought in our area we could afford to build - we REALLY lucked out and only because the builder got the deal.
it's worth a shot to ask him
This is interesting - are you working with a real estate attorney? If so I would go to that person first.
The realtor has to be paid by someone, but it should only be 2.5%. Since she was the one that put in the offer for you, she may have procuring cause which could give her legal rights to take action if you tried to exclude her from the deal.
If it's FSBO I don't think you should have to pay the other company.
Thanks for your opinions. Our builder worked on it all day today for us and here's what we figured out:
- Possible 2.5% to our realtor's company (only $1,000 max)
- No commission on finished house to either realtor. Our commission rate is already built into the price of the home.
Last night I thought we were going to have to come up with another $12,000 to cover all the costs. It was a big relief to learn we didn't owe anything extra. We really don't trust our realtor anymore and I have a feeling she tried to slide some things into the contract. Our builder hasn't even heard of this happening before! I can't wait to get our house sold so we don't have to deal with our realor anymore!
Glad it worked out! Hub and I thought about doing new construction (and might down the road), so it's an interesting situation to think about.
If you don't like your realtor, you can probably call her company and have them replace her. She'd still get a cut (though probably a smaller one) but you wouldn't have to deal with her through the process. I really like our realtor and I can't imagine having to go through the process with someone I didn't like.