Home Buying in Carlsbad>Question Details

Sharon Benja…, Home Buyer in San Diego, CA

Who pays buyer's agent commission for new construction? Looking for an experienced agent in North county who knows about buying from builders.

Asked by Sharon Benjamin, San Diego, CA Fri Mar 22, 2013

Help the community by answering this question:


Mylene Merlo’s answer
Hi Tina,
The builders pay the commission - the buyer does not pay for it.
Sometimes builders don't want to work with buyer's agents, and that is a red flag for a buyer. A buyer should always have a real estate professional reviewing all contracts on their behalf, looking out for the buyer's best interests.
Feel free to contact me at (760) 637-7231 or Mylene@MyleneSellsHomes.com if you have any other questions.
Best wishes
1 vote Thank Flag Link Fri Mar 22, 2013
You make me laugh. A Sales person like a real estate agenet is NOT a qualified builder, most of the branch do not even know the difference between bricks, have no clue about any sort of installation. Do not waste your time with sales people. If you want a used car you check it with the mechanic. If you buy a house go there with a craftsman/builder!
Flag Tue Jul 5, 2016
Mylene, I couldn't agree more. Excellent answer.
Flag Fri Mar 22, 2013
The question has been answered very comprehensively by many agents. However, in breezing through the answers I didn't see mentioned the fact that Builders generally shift all escrow and title costs to the buyer rather than splitting them between buyer and seller as is traditionally done in re-sale homes. It can add a few thousand to the costs of the buyer.

Also, there is a new development in Carlsbad near Stagecoach Park. The lots are a little small but the neighborhood is fantastic, schools are some of the best, and the models are gorgeous.

The builder is Davidson who always builds beautiful homes. They have design down.
1 vote Thank Flag Link Tue Jan 28, 2014
Most builders require you to register your client on their 1st visit. Some require you to resign your BCC paper work if the purchase time exceeds 60 Days. With the market as tight as it is in our area , new homes, FSBO's and suction are viable avenues for home buyers.
1 vote Thank Flag Link Sun Mar 24, 2013
Usually Builders are paying buyer's agent compensation. There are a few exceptions when builders do not compensate the buyer's agent.
~Dina Polselli
0 votes Thank Flag Link Mon Nov 16, 2015
You can find agents by using newbuilderagent. com. We are members of it here in Denver and they only use the top 1% and give back 25% of the commission to the buyers. Hope this helps!
0 votes Thank Flag Link Mon Oct 27, 2014
Normally builders give a referral fee to the buyers agent.
0 votes Thank Flag Link Sat Feb 8, 2014
Usually they have a Broker Coop that comes out of a special marketing fund just for that.It's almost always the sellers who technically pay for the commissions for buyers.
0 votes Thank Flag Link Sat Feb 8, 2014
The builder pays the commission or what is usually the case the referral fee, which means the builder has a broker that represents you in the transaction. A fee is paid to your agent or more accurately his/her broker for bringing you in on the first visit.

I have worked with new home builders for 10 years and moved my entire family to new homes to the La Costa area of Carlsbad in North County.

Many of my buyers are very experienced but worry that the builder will not give them as large a discount if they are working with an agent. This is almost never true. The rare condition in which the builder looks unfavorably on a represented client is when the builder is small and has actual vertical control of the sale which means the money is coming out of their own pocket. Most large builders have a sales budget for referral fees and commissions for cooperating brokers and that budget is kept distinct from the sales figures. If you are buying a new home that is in a development (as opposed to a custom lot) then you do not have to worry about being charged indirectly for your own representation.

I have been able to negotiate significant discounts with builders who claim their prices are not negotiable and have often got around their issue regarding having brought the buyer on their first trip (which is not easy). There are significant advantages and disadvantages to buying from a builder and I am happy to explain those in detail should you need any advice. Best regards, Ali Ehsan Esq. BRE# 01424277
0 votes Thank Flag Link Thu Jan 30, 2014
Hi Tina...the builder (seller) pays the commission or referral fee. If you want to be represented by your own agent you must take the agent with you the first time you visit a new home community.

I spent several years representing builder/developers as their community sales agent, and have been involved in developing new construction, so I can help you understand the "ins and outs" of new home communities.

Let me know if I can help you!

Gary Hofmann, homeSmart Realty West
0 votes Thank Flag Link Sun Aug 11, 2013
Hi Tina,

Most New Construction Companies offer a commission or a referral fee to the buyer’s agent of some sort. It varies from company to company as to how much it is. If there is a Buyer/Broker agreement in place that indicated a minimum fee of 2% of the purchase price to the Broker then it’s possible that the difference will need to be paid by the buyer if the compensation is not 2% from the New Construction Company.

Buyer Broker agreements are not mandatory. Some agents use them and some don't. As an independent Broker I have leverage to accept whatever compensation I feel is fair and Assisting a buyer with a New Home purchase is much easier than a resale once the home is identified so on a personal level--I'm more interested in establishing a lifelong client base and am comfortable with accepting whatever the various Builders are offering.

Here in California most Builders are Building Green and as a Green Realtor it's exciting to see buyers leaning towards Green Purchases.

Anastasia Schmoll
DRE# 01430464
0 votes Thank Flag Link Thu Jul 25, 2013
Hello Tina,

We have a great deal of experience working with the builders. The agent is paid by the seller -in this case the builder. What development were you interested in?

We have represented buyers as well as purchased homes for ourselves. So we are very very familiar with this process and can negotiate for more than the agent representing the builder would.

Lots of good answers below --- I would highly recommend that you find an experienced agent that you like and trust to represent you. I would do your research online and then make some phone calls and then meet in person. The agent can make the difference of your offer being chosen or not. Experience really is important right now. An experienced agent can see things an agent with less experience wont see until it's too late.

I would read testimonials and look at their individual websites.
It would be a good idea to pick an agent that has at least 10 years of experience and has not held any other job during this time. You should look for a FULL TIME agent. Also ask to speak with their recent clients that just closed escrow! At least three clients with in the last 30 - 60 days. Verify these were their clients with proof of the sold MLS listing.

We represent more buyers than sellers. We have been in the business for over 30 years.

I am born and raised in San Diego and have lived in Carlsbad for many years. Cal State Realty has over 300 agents located throughout California.

Scott and I are a husband and wife team - you will receive twice the attention and assistance!

Please feel free to contact us, view our profile and websites.

Kind regards,
Scott and Shelley Weier
Cal State Realty
C2 Financial Corporation
Website: http://www.CalStateRealty.us
0 votes Thank Flag Link Thu Jul 25, 2013
Hi Tina,

You have great responses here, but I can not stress to you enough that the first thing you need to do is hire a Buyer's representative.

This agent will represent your best real estate interest. This agent will have the experience on what to look for and guide you through the biggest purchase your will ever have. This is a purchase that once done you can not return so make it a valuable one.

The agent you hire will put an offer together and negotiate on your behalf for the best possible purchase price and guess what you do not have to pay for this type of represenation because the seller is the one paying for the commission out of his proceeds. Most consumers do not understand the different agencies available to them or what different roles a Realtor can have but if you inform yourself you will have a successful purchase with your buyers representative. A buyers agent is your best allied. Best of luck
0 votes Thank Flag Link Thu Mar 28, 2013
Generally, most new home communities will pay a buyer's agent who is with the buyer the first time he/she walks into the sales office.

If you haven't been inundated with Realtors yet, I have experience helping buyers purchase new homes. Would love to speak with you.
0 votes Thank Flag Link Fri Mar 22, 2013
Some builders offer a co-op to the buyers agent. Historically the tighter the market becomes (sellers market) the less likely builders are to cooperate with agents. When the builder does not cooperate, they have their own staff sales people to help you. They know the property and it is like dealing with the listing agent on resale properties. Remember, they are representing the builder, not the buyer.

You can have a lawyer review your documents. Check with BBB for ratings on the builder. They are regulated by Dept of Real Estate and Corporations. Make sure to get all verbal promises in writing, because sometimes people forget what they said.
0 votes Thank Flag Link Fri Mar 22, 2013

The Seller/Builder typically pay a commission to the Buyer's Agent if their criteria are followed. Each Builder has different rules about the Agent being present and what percentage of commission will be paid out. It is important to discuss that ahead of time with your Agent. If you have a Buyer's Agency Agreement in place that obligates you to more than what is being paid out by the Seller/Builder, that can also be negotiated (otherwise you would be responsible for the difference).

I encourage you to find an agent that will stay involved with you throughout the entire transaction, including attending all inspections, (not just "drop you off" with the builder's agent).

Kind Regards,

Marcie Sands, REALTOR
Simply The Best Real Estate Co., Inc.
0 votes Thank Flag Link Fri Mar 22, 2013
Hi Tina,
First of all, congratulations on your move to Carlsbad. It is a lovely area of the county and I know it well having lived and worked in North County since I was 3. I have toured most of the new builds that are currently available in Carlsbad, so feel free to message me with which one you are looking at and if you have any questions. I have over 9 years experience in builder sales and have worked with every major home builder in Southern California, so I am happy to share my expertise both in quality of construction, negotiation, incentives, etc. As others here have stated, the builder pays the buyer's agent, so there is no expense to you PLUS you get an experienced professional advocate- GREAT deal! :)

Thanks so much Tina,
Have a great day!
Sinead McAllister-Clifford
Real Estate Broker/ Realtor®

McAllister Homes Real Estate
Residential Sales & Property Management
License 01366009
858-205-5215 CELL
brokermcallister@gmail.com EMAIL
0 votes Thank Flag Link Fri Mar 22, 2013

The seller/builder will typically pay a commission to a buyer who walks them into the development on the first visit. The builder normally builds this into their proforma so representation really doesn't cost you more. In addition to assitance with digesting a lengthy contract, an agent can help with inspections, area research and assist you with evaluating financing options if necessary.

Builders are taking advantage of the shortage of inventory with rapid price increases, but that doesn't mean upgrades and incentives aren't negotiable.

I know you will love San Diego. If I can help or answer any questions, let me know.

Tom Caskey
0 votes Thank Flag Link Fri Mar 22, 2013
Hi Tina,

You are going to get MANY responses with agents saying "pick me". 50% of our business is representing a local builder who builds 10 to 15 homes a year. Maybe not a lot now, however, he has built over 5,500 homes in his career.

The builder/seller pays the commission for the agent representing the buyer IF the agent is with the buyer when they visit the sales office.

The husband in our team parent's built new homes for many years in Orange County and Utah and has been around the new home business as a licensed agent since 1989.

It is important to understand that all builders are different in terms of the incentives they offer and for agents to understand those differences. We have contacts with most all of the builders in San Diego.

Please feel free to ask us any questions that would assist you in any way whether you use our services or not. As an FYI, if you hold your mouse over an agents photo, you will get an idea of how long they have been answering real estate questions on Trulia.

Lastly, know that inventory is moving quickly because of a decline of homes for sale over the past 6 months.

Best of luck to you in your endeavors,

Mark & Kari Shea
Shea Real Estate
National Association of Realtors
CA DRE License 01713506
0 votes Thank Flag Link Fri Mar 22, 2013

Just as in resale homes, the seller, in this case the developer takes care of the commission. My broker and I have worked with William Lyon for over 15 years on various projects together. We represent buyers that have purchased from Standard Pacific, Pardee, K. Hov, CA Pac, etc. We will attend your contract signing appointment to go over the BIG stack of documents with you in laymans terms.

Feel free to call me or email me.

Skoglin Real Estate
0 votes Thank Flag Link Fri Mar 22, 2013
As a follow up it is also very important that whoever you choose as your agent that they register you as each of the new development communities you visit to have the builder pay for your agent’s commission, which comes out of their marketing budget and has no effect on what we “negotiate” for a purchase price.
I would be honored to assist you in any way that I can. We would need to sit down for a meeting, or talk on the phone, to determine in depth what your goals are, what your lifestyle needs are, where you would be working for commute considerations, what activities you like to do, if you have any pets, if you have children, and if so what ages for school considerations, what price points you are comfortable with, work to get you “pre-qualified” with at least two lenders, and what area’s that you would like to look at (i.e. particular cities and/or distance from the coast, and schools, distances from your workplace, etc.).
I have lived and worked in North San Diego County since 1983 and have a good working knowledge of virtually all the communities in the county.
Please contact me if I can be of service to you and your family and help you and your family create wonderful lasting memories in our beautiful area of the country!
Best regards and remember to… “Keep Smiling”
Ron Cormier-Realtor ®
Prudential California Realty a Berkshire Hathaway Affiliate
Cell Phone: (760) 525-9756
E-mail: rcormier@sbcglobal.net
0 votes Thank Flag Link Fri Mar 22, 2013
The previous answers are correct, and I offer a Buyers Rebate.. please visit http://www.intelligentbuyerwithken.com for details. Or you may contact me at 760-521-0910, listorbuywithken@yahoo.com
0 votes Thank Flag Link Fri Mar 22, 2013
Hello Tina~

On new construction, the builder pays the buyers agent commission. As others have already shared, it is best to have your own agent for negotiations and to have your own representation. I am in Carlsbad and know the market in North County, if I can be of service. You may want to have a conversation with a couple of agents to see who is the best fit for you. The transaction to purchase a new home should be exciting, enjoyable and flow smoothly. The right agent can make that happen!

Chris Gorno
Windermere Real Estate SoCAL
Carlsbad & Solana Beach
DRE # 01499885
Web Reference: http://ChrisGorno.com
0 votes Thank Flag Link Fri Mar 22, 2013
Good morning Tina,
Nevin is correct with everything he said about the builder paying the buyer agent their commission AND about making sure that you have an agent to represent your side of the contract for your protection!
0 votes Thank Flag Link Fri Mar 22, 2013
Sorry for the typos in my previous answer. I hit send before I could correct them!
0 votes Thank Flag Link Fri Mar 22, 2013
Hello Tina - First I want to disclose that I am a lender not a real estate agent. I used to own a real estate investment firm in Sacramento and purchased multiple new construction homes.

The builder will pay the buyers agent commission. Some home buyers feel it is okay to go into contract with the builder and avoid getting their own representation in fear that they will pay more for the home to pay for their agents commission.

Problem is that the agent for the builder may represent you but we all know who pays their check. Therefore I think it is prudent to get your own agent prior to walking in to the sales office. A good agent can negotiate a fair sales price and in my experience my purchase prices have always been less than what the builder was asking fot because my agent aggressively negotiated on my behalf.

Lastly, it is rare to not have an issue with a builder during costruction. You will need someone to represent you when contractual obligations are not met.

I work with a lot of agents in North County. The top two I would recommend that I know will represent you and negotiate are (Google them if you like) Jeff Dowler & Kim Carlson. I suggest you include them in your list of agents to meet with before choosing one.
0 votes Thank Flag Link Fri Mar 22, 2013
Hi Tina!

When buying new construction it is always best to use your own agent. Your agent should be able to negotiate incentives and make sure that the contract is honored on your behalf. You, as the buyer, don't pay the buyers agent anything.

When you refer to North County are you referring to the new construction in San Marco, Fallbrook or Scripps ranch? I have viewed these new construction communities.

Feel free to call or email if you have any additional questions!

Theresa Mack
Coldwell banker
(858) 230-4850
0 votes Thank Flag Link Fri Mar 22, 2013
Hi Tina,

I see that you already have your answer. In dealing with any legal contract it is always a good idea to have an attorney review. If you are interested in speaking with a local, experienced North County agent who is also a broker/attorney, please give me a call. My background provides you with extra assurance with your home purchase, whether it is via a developer or a resale seller.

Kind regards,

Rachel LaMar, J.D.
Broker/Attorney, LaMar Real Estate Inc.
0 votes Thank Flag Link Fri Mar 22, 2013
Everything is negotiable and if the home is not listed with the local association, the builder does not have to follow the local associations guidelines.

If the builder is not willing to pay for commissions, the Realtor can work for free or the buyer will pay the commissions.
0 votes Thank Flag Link Fri Mar 22, 2013
Hi Tina,

Not to worry, the buyer's agent commission is paid by the developer. I'm a local agent in North San Diego county, experienced in new construction homes. There are many beautiful new developments in North County. As your agent, we'll first sit down (either in person or on the phone if you're out of state) for a thorough buyer consultation, so that I can fully understand your lifestyle and your housing needs. From there, we identify properties that fit your budget and lifestyle. North San Diego county is absolutely beautiful and you're sure to find a lovely home. You can contact me by email or by phone.

Kim Sinclair
Real Living Lifestyles, CA DRE #01435354
300 Carlsbad Village Drive, Suite 224
Carlsbad, CA 92008

Call or text me at: 760-845-4365
eFax: 858-432-5019
0 votes Thank Flag Link Fri Mar 22, 2013
The builder will pay the commission as long as the agent signs you in the first time you visit.
0 votes Thank Flag Link Fri Mar 22, 2013
Hello Tina, it is customary for the seller to pay the commission. This will not affect the price of your home, as it is traditionally paid out of a marketing budget. Your agent will be able to read through the contracts, attend meetings between you and the builder, and assist with comparable sales to assist you. You get an advocate to represent you and protect your interests and they pay for it. If I can assist you, I'm in Carlsbad, have been since 1993, and am reachable via 760.333.3333 (text or phone.) Good luck!
0 votes Thank Flag Link Fri Mar 22, 2013
Hi Tina
I'm experienced w new home sales in North County, particularly Carslabd.
The builder usually cooperates w brokers and pays the agents commission. I'd be happy to be of service and share w u my knowledge of the different new home communities in Carslbad. I've seen just about all new construction and would love to help out. Please email me at realestatequestion@yahoo.com or call anytime 760 207 7245
0 votes Thank Flag Link Fri Mar 22, 2013
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