RESIDENTIAL REAL ESTATE : Home Builders Turn to Resale Realtors to Bring In Customers

Compiled by John O'Dell Times staff writer

Realtors, as we all know, sell used houses for 6% commissions--which they split if one realtor represents the seller and another brings the buyer.

Home builders hire specialized companies to handle sales at their developments, and the sales agents, who have an almost guaranteed volume, don't get anything near the commissions that realtors get. Many work on straight salary.

That's the way it used to be.

But realtors and home builders are hungrier than they've been in a decade, says Gordon Tippell, chairman of Taylor Woodrow Homes California Ltd. in Newport Beach and president of the Building Industry Assn. of Southern California.

"One thing we've seen in the last year," he said, "is an increasing willingness by builders to work with resale realtors. In the boom period, we were much less likely to be giving realtors a commission to bring buyers to our tracts. We had people lining up to buy, so why the hell would we ever need to pay a commission to a realtor?"

Today, however, "the reality is that almost every builder is cooperating in some way with a real estate chain or with individual local realtors," he said. Builders are paying realtors commissions for every buyer they bring in, he said, although the commissions aren't as fat as in the resale market. Tippell wouldn't reveal the size of the scaled-down commissions but didn't disagree with a suggestion that they might average about 1.5%

Copyright © 2019, Los Angeles Times
EDITION: California | U.S. & World
52°