This is not a Realtor's field of expertise. They SELL homes, not BUILD them. How to get out of it? Tell the RE Agent "thank you for the builder referral", but that you do not wish his/her services. Simple.

I don't understand. What, exactly, is the "expense" you are talking about (not including marketing and listing of your current home)? We own both real estate and residential home building businesses, the two are NOT one and the same (and my husband takes great care NOT to crossover). Is your realtor hoping that if she refers you to a builder that you will use her to purchase land? Is she asking for a referral fee?

Regardless, I agree, thank her for the referral and let it end there. Times are VERY tough for realtors; some are pushing the envelope these days to make money... ANY money. If you feel something may have transgressed, there is a local real estate board that oversees conduct and ethics.

In our area many times the realtor/builder is a team. The realtor showed us a home that we liked that sold so we may build the same home.

The more people you add to the process, the more money it is going to cost you. If you desire to build, you need to shop out your own builder. I wouldn't add a realtor into the process unless forced to do so.

There is a link at the top of the page for building homes. You should check out that forum if you haven't already.

Some Builders give a 2% commission to licensed Realtors who bring in buyers who end up purchasing!

When we built our first custom home our realtor helped us every step of the way. We didn't pay her, but the builder did give her a small percent I believe. She was invaluable from helping us to select a builder to meet our needs, to helping us specify moldings. She would point out things during the construction that weren't being done properly and she would insist certain things be done a certain way such as putting all the electrical outlets in the baseboards. She really knew what it would take to make sure we got a custom quality house instead of a spec level house at a custom price. She knew exactly how much we had to spend and she made sure we got all the details that would make it worth it. She really worked for us. Of course we were young and inexperienced at building at this price point and welcomed the advice.

In my area, most developments have realtor deals where they get the usual commission even for a custom built house. A friend build a $1.1M house. The realtor introduced him to the builder and made $30k for her and her company. Not bad work if you can find it. Now they were looking for resales and decided to build and she did introduce the builder to them. I don't know if the realtor helped with the process after that.

The city developments all have contracts that essentially require a buyer's agent and if you don't have one, then the agent for the development gets the full commission. We were able to cut that part out but only because of the current market. It does seem like most people on this forum are not building in such developments.

I don't really think a realtor knows how to build a quality house but they could advise you on resell value items. Like - in this market you must have a formal dining room, a seperate jacuzzi tub etc and also keep you from building a 5000 sq ft house in a 2000 sq foot house area. If you know what you are doing, you probably don't need this advice....They might have some good ideas and they might not.

As an aside, I think the outlets in the baseboards is such a cheap and nice thing to do. We paid $10 to the trim carpenters per outlet...

David: You are right. We built in one of the lake communities and had we not had our own agent, then we would have had to use the "community" agent.

In my business, realtors are for selling and builders are for building. Forego the realtor when it comes to building. You need to find a builder that you can trust, who is reliable and who is licensed/insured.

Realtors definitely serve a purpose, but when it comes to advice about a builder, you can bet that it will cost you again. A referral fee is offered to realtors from builders and this referral fee is tacked on to the price of your home.