[NewtoDesert77]

Hello,

Thanks in advance for your help with these questions. My spouse and I would like to build a new production home in a Las Vegas community with a local builder. I have noticed that the local builders here all have signs on the front doors of their sales offices saying that a buyer who would like to use an agent has to bring the agent with them on the buyer's first visit to the community. (The community in which the house will be built has not opened yet, so we have not yet been to the community with or without an agent.)

We just moved here from another state where the below arrangement is very common and accepted, but we are unfamiliar with Nevada law and the local builders' and Realtors' practices. Our three-part question is this:

(1) Is it legal for a Nevada-licensed Realtor to split a commission with the Realtor's client (that would be us, the buyers) as long as the split commission is disclosed on the sales contract with the builder and on the RESPA? The desired house will be about $400,000, so a 3% commission would be about $12,000, and we would want half of that commission ($6,000) to be put towards our down payment. We have done all the work identifying the community, the floor plan, and the options that we do and don't want and we wouldn't waste any of the Realtor's time other than visiting the community for about 30 minutes the first time we go and attending the closing. One of us is an attorney licensed in a far-away state and we've bought four other homes so we don't need any advice or counsel or hand-holding, and we are used to obtaining our own financing and arranging inspections and so forth. We just are a little cash poor after taking a $100k loss on the sale of our last home in the other state and the $6,000 down payment help would get us into a house two months earlier than otherwise possible.

(2) Even if it is legal for a Nevada-licensed Realtor to split a commission with us, do local builders accept this arrangement? The builder in question pays the buyer's non-down payment closing costs as part of their advertised deal, so we would put the money towards our down payment, not the other closing costs.

(3) Even if it is legal for a Nevada-licensed Realtor to split a commission with us, would the Average Joe Las Vegas Realtor laugh in my face if I proposed this? In our previous state, it was common if the buyer agreed to do all the leg work. The time spent by our last Realtor in our last state was less than 3.0 hours (initial visit to community, signed bottom of contract, attended closing, and drove to and from these meetings), and she got $6,000 for it.

Thank you so much for your time,
New to Desert

[airics]

no, no, and definitely yes

[olecapt]

Yes, sometimes, and no.

Airics marches to a different drummer.

Note that you may find it creates all sorts of complexities. Particularly with the lender. It is not commonly done and it involves payments from a source other than the buyer. That can kill your financing with any number of lenders.

Note that a builder has an awful lot of room to move on the cost of a house. You erect your careful house of cards and he simply works another couple of percent of costs into the sale. Very hard to avoid unless you buy the house from the first dirt as the builders minimal configuration. And that has it own set of problems.

Note also at this point on a 400K house you will pay a premium of close to 15% over a resale. You can do an awful lot of do over for 15%. Particularly if you are buying a production house.

[airics]

Originally Posted by olecapt

Yes, sometimes, and no.

Airics marches to a different drummer.

You are correct! I have ETHICS!

[Robustus]

Originally Posted by airics

You are correct! I have ETHICS!

How is arranging a non-traditional deal that all parties agree to unethical?? No one is trying to trick anyone. Unless I'm misunderstanding some part of this...

[olecapt]

Originally Posted by airics

You are correct! I have ETHICS!

Many part time agents don't actually understand Real Estate Law very well...

For instance the question on rebates is reasonably clear...

OPINION NO. 97-28 REAL ESTATE; AGREEMENTS;ADMIN-ISTRATIVE
REGULATIONS; AGENTS: In the absence of any judicial or legislative direction or any statute prohibiting or penalizing such activity, buyer’s broker rebates, gifts, or discounts are probably lawful in Nevada real estate transactions. The Nevada Real Estate Division has authority to adopt regulations defining the perimeters of a buyer’s brokerage agreement.
Carson City, December 31, 1997

And they are occasionally used by many people. I have for instance a multiple deal client who is licensed as a broker in CA. She could quite legally take a referral fee of 25% or so. Instead I rebate that amount into the closing. That has tax impacts that are useful.

In a cash deal there is actually no requirement to expose such an arrangement. It would however have to be disclosed in any financed arrangement.

Most builders could not give less of a damn except if it screws up the financing...that may well happen in cases where the financing is through an arrangement negotiated by the developer.