Buying land for STR Build
I am looking to buy land & build a STR. I would like to use a new construction loan so that both the land & build are in one loan & less of a down payment.
If I use a realtor to purchase the land, will I have to pay them a percentage of the construction loan? IE: If I spend 80k on land & get a loan to build 400k home, will I owe the realtor fee's on just the 80k land or will I owe on the construction loan. Since I would be working directly with a builder to build on my own property, I have no need for a realtor beyond purchasing the lot.
Appreciate any insight!!
Most Popular Reply
Hey @Christina Kinard, If you use a realtor to purchase land you pay nothing. The Seller of the land hires a listing agent, they agree on a commission to charge the seller. Let's say it is 6%. So if the agent you are working with brings you (The buyer) they will be paid 3% and the listing agent will get the other 3%. Of course commission is always negotiable and all but for sake of the example that is how it works.
Now for off market property things could change. But 9/10 times the commissions that go to realtors come out of the seller's proceeds.