Buying a New Build vs a Pre-Existing Property:
The process of buying a new build property can be different than buying a pre-existing property. Sometimes, builders will require you to use their own custom paperwork (Deposit Reservation Agreements, Broker Registration Agreements, Purchase and Sales Agreements, etc.) If you're buying a new build, ensure you understand your builder's custom paperwork and what their sales process is.
Receiving a Real Estate Commission Rebate on a New Build:
If you’re buying a new build home and the builder does not require you to use their own custom paperwork, you should be able to receive a real estate commission rebate from your agent. Although, there are nine states that do not allow real estate commission rebates which include Alabama, Alaska, Iowa, Kansas, Mississippi, Missouri, Oklahoma, Oregon and Tennessee- so if you’re buying a property in any of these states, you will not be able to receive a real estate commission rebate.
If you’re buying a new build home and the builder does require you to use their own custom paperwork, make sure to ask for that paperwork as early in the sales process as possible. This gives you and your agent time to review the paperwork and see if there are any restrictions from your agent being able to rebate their commission back to you.
Why Would a Builder Block Your Real Estate Commission Rebate?
There could be myriad of reasons why a builder may not allow your own agent to rebate you their commission. Here are a few examples:
Large builders operating nationwide may include rebate restrictions in their standard paperwork to comply with states where rebates are prohibited, even if you’re buying in a state where rebates are allowed.
Builders often have pre-established commission structures and pricing models for their projects. By preventing rebates, they maintain control over the final cost to the buyer and protect their profit margin.
There are less buyers in the market right now across the country (2024 had the lowest amount of home sales since 1995) which makes it harder for builders to sell their new homes. So, some builders may be providing a significant amount of seller credits, which could take up the maximum number of credits (or rebates) that a buyer can receive on a transaction.
In Summary:
If you’re considering buying a new build home and plan to receive a commission rebate from your agent, make sure you speak with the builder about this as early in the sales process as possible.
If you’re interested in receiving a large commission rebate, check out Joy, where we rebate 70% of our commission back to buyers!
