4 ways to protect your commission when a client buys new construction

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The framing of a large wooden structure atop a huge slab of concrete.

12/29/2014 | Author: Editorial Staff

If your clients are among the 30% of Texas homebuyers looking for new construction, you can take a few steps to ensure they get the home they want and you get your earned commission.

Pat Strong, a Texas REALTORS® University instructor who teaches the “New-Home Construction and Buyer Representation” class, offers these suggestions.

Find out which contracts they use. Does the builder use contracts drafted by their own attorneys, or are they represented by a Texas REALTOR® who uses TAR and TREC forms? These forms have protections for buyers and buyer's agents that other forms don’t have.

Protect yourself with this form. Have them sign the Registration Agreement Between Broker and Owner (TAR 2401) and ask about what happens if the buyer comes back without you.

Register with the builder. Make sure the builder has you listed in his system as representing your client for an amount of time. Always accompany your client on the initial visit so you can learn about the builder’s registration process.

Remember MLS rules. Builders who act as listing brokers may list model homes in the MLS, but you may not be entitled to a commission if your client chooses a home that’s not listed in the MLS. Having a written agreement with the builder can you help avoid this situation.

Read more tips in “7 ways to have smoother transactions with builders” in the December 2014 issue of Texas REALTOR® magazine. 

Categories: Business tips, Forms, Legal
Tags: buyers, legal, magazine, homebuilder, mls, forms


Tim Brown on 12/31/2014

The other issue we have in the San Antonio area is the “Move Up” programs where the builder tells the buyers they can have their preferred agent sell their current home for free! I have had 3 well known builders use this, knowing that the buyers have their own Realtor! When confronted, they squirm but say it is “just an option” that they offer. Is the market that good that they can start trying to cut out the Realtor again?

Penny Clissold on 12/31/2014

Good article but does not matter. As soon as you leave they call your clients and tell them that if they can dump the realtor they will give them the commission by reducing the price and they will pay the title insurance. Builders here are so bad that I refuse to even show new construction . I have had this happen over 5 times and every time I was on the initial visit . I even took my buyers rep agreement and showed them a copy. They just have a ” well sue me” attitude.
Plus they have their own title company and bank . The home always appraises even if it’s way over market and ya need to stop them. They should not be able to do this. They have a racquet going.

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The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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