I want to buy a new build home from the builder, but I don’t want to work with the builder’s representative. I want to work with my own agent, is that allowed? Will it cost me more money?
Yes, you’re allowed to work with your own agent. The builder’s representative is representing the builder’s interests, and your real estate professional will represent your interests in negotiations with the seller (builder).
RECA always recommends having your own representation when buying a property, whether it’s a new build, resale, a condo, or even a commercial or rural property. While builders can’t stop you from having your own representation, it is possible you’ll come across one that wants to deal with you, as the buyer, directly. If that’s the case, your real estate professional can offer you advice and guidance behind the scenes, but they won’t be dealing directly with the builder or the builder’s representative.
When you hire a real estate professional to represent you, you’re required to enter into a written service agreement. The written service agreement sets out the roles and responsibilities of your real estate professional, and your obligations to that individual. It also sets out how your real estate professional will be paid.
Typically, buyer’s representatives are paid through a portion of the commission the seller pays. Some builders, however, do not offer commission to buyer’s agents. If this is the case, your real estate representative won’t be paid in the usual manner.
Your agreement may contain a clause that sets out if your real estate professional will not receive a portion of commission from the seller’s agent’s commission, you will owe compensation to your agent upon completion of your purchase. This compensation could end up being an out of pocket expense for you.
You may come across builders that have programs to pay commissions to real estate professionals who introduce a buyer to the builder, but this is not the same as having representation from a real estate professional throughout the process. In these cases, the builder is willing to pay commission to a real estate professional who introduces you—but then the builder expects to deal directly with you as the buyer, and you may not have the benefit of advice from your real estate professional.
RECA recommends carefully reviewing the fee portion of your written agreement before signing it.
If there is no mention of how your real estate representative will be paid in the event the seller or seller’s brokerage is not offering commission to a buyer’s representative, you need to talk about it with your real estate professional. If you have concerns about a possible out of pocket expense in terms of compensation for your real state representative, get that out in the open at the beginning.
