Buying a new construction home means navigating a sales process that works differently from a traditional resale transaction — and understanding how agents get paid can save you from confusion and costly mistakes. Builder sales agents, buyer's agents, and co-broking arrangements all follow distinct commission rules. Here's what you actually need to know before signing anything.
Who Are the Agents Involved in New Construction?
Two types of agents typically appear in a new construction sale:
- Builder's sales agent (on-site agent): Employed directly by the builder or their sales team. Their loyalty is to the builder, not you.
- Buyer's agent (your agent): An independent agent you bring to represent your interests. They negotiate on your behalf and review the contract details.
Understanding this distinction matters because both agents may earn commissions from the same transaction — and that affects how each one behaves.
How the New Construction Agent Commission Structure Works
In a typical new construction deal, the builder sets the commission structure upfront and advertises it to the buyer's agent community. This is sometimes called a co-broke or co-op commission.
Here's how the numbers usually break down:
- Builders commonly offer buyer's agents between 2% and 3% of the base purchase price
- Some luxury or custom home builders offer flat fees instead, ranging from $5,000 to $25,000+ depending on price point
- The builder's on-site agent earns a separate salary or incentive bonus paid entirely by the builder — typically 1% to 2% of the sale price, or structured as tiered bonuses when they hit monthly closing targets
- In hot markets, builders occasionally reduce co-broke commissions to 1% or even eliminate them temporarily to cut costs
One critical thing to understand: the buyer does not directly pay the buyer's agent in most new construction deals. The builder folds commission costs into their pricing model. That said, if you walk into a model home without registering a buyer's agent first, you may forfeit your right to have one — and lose that representation entirely.
The "Registration" Rule You Must Know
Most builders require buyer's agents to register their clients before the first visit or within a narrow window (often 24–48 hours) after the first visit. If a buyer visits the site, signs paperwork, or even fills out an interest form without an agent registered, the builder may deny any commission to a later-added agent.
This is commonly called the "first-visit rule" or agent registration policy, and it varies by builder. Large national builders like D.R. Horton, Lennar, and Pulte each have their own specific policies. Always confirm the registration deadline before touring any model home or community.
What Happens When There's No Buyer's Agent?
If you buy directly through the builder's on-site agent with no buyer's agent involved, the builder typically keeps the co-broke commission rather than passing savings to you. In rare cases — especially with smaller, local builders — you may be able to negotiate a price reduction equal to the buyer's agent commission, but this is not standard practice and requires assertive negotiation upfront.
Red Flags in Builder Commission Arrangements
Watch for these warning signs when evaluating how commissions are structured:
- Builder incentives tied to using their preferred lender — sometimes disguised as "closing cost credits" that only apply if you finance through them
- Commission rates that change after you're already in contract, which can create friction if your buyer's agent pushes back on terms
- On-site agents discouraging you from hiring a buyer's agent — a clear signal their interests and yours are not aligned
- Commission language buried in the purchase agreement rather than disclosed in a separate document before negotiations begin
How to Use This Knowledge When Shopping Builders
Before committing to any new construction community, ask the on-site agent directly: "What is the current co-broke commission you're offering buyer's agents?" A straightforward answer reflects a transparent builder. Vague or evasive responses are worth noting.
Also confirm whether the builder is running any commission specials or incentive periods — some builders temporarily raise co-broke commissions to 3.5% or add bonuses to move inventory at the end of a fiscal quarter.
If you want to compare builders, communities, and the agents who specialize in them, Mercoly makes it easy to find and compare trusted new construction professionals in one place, so you're not relying on a builder's on-site team alone.
The Bottom Line
New construction commission structures favor buyers who come prepared — with their own agent registered early and a clear understanding of how the money flows.
Start your search with a buyer's agent who specializes in new construction before you ever step into a model home.