Residential Build Sites - Vacant Land - Agent Wants 6% of Const $

[Michael Arnold]

I'm a custom home builder. I help local realtors sell their vacant land. I consult on soil quality, site preparation costs, construction costs, zoning, and utility availability.

I do this for free in the hope of obtaining a new lead to build a new home.

Recently, a real estate agent mentioned that they should also get 6% of the construction cost. I found this unusual as an expectation, especially in our super high-cost construction market in Q1 of 2021. And the fact that they are at zero risk during the construction of the home and have no contractual relationship with the potential future client/and will do zero work in regards to the construction process.

• No smart buyer would fall for this anyways. They would just hire another builder. And a builder could NOT absorb 6% out of their profit margin.

Agent framed this as "build to suit," and I think it is getting everything confused with large production builders who buy all the land, build dozens of homes with the hope to sell them to buyers (and need a RE agent to help). I explained this …

I would love to hear some comments/advice on how to handle this? Don't want to burn the bridge.