Builder confidence dropped to 32 in September 2026, its lowest reading in a year, according to the NAHB/Wells Fargo Housing Market Index, and roughly two-thirds of builders reported using sales incentives that month. Against that backdrop, one marketing platform is arguing that upfront marketing spend has become a harder sell than the homes themselves.
Builders Update is promoting a pay-upon-performance program that inverts the traditional marketing arrangement. Builders pay nothing upfront to list and promote inventory, and a fee comes due only when a home closes, alongside the referral fee owed to the agent who brought the buyer. The company says the structure is designed for a market in which builders are scrutinizing every dollar.
“There is no guarantee on how many leads you get, and no guarantee they convert,” said Bill Gaul, CEO of Builders Update and chair of the RESO Data Dictionary New Construction Subcommittee, describing the risk builders take on with upfront marketing spend.
The closing fee is tiered by price: $1,000 on homes up to $500,000, $1,500 between $500,000 and $1 million, and $2,000 to $2,500 above that. Gaul argues the fee is a small fraction of the sale on higher-priced homes. The program carries one condition: builders must contribute their full inventory rather than list selectively. “You can’t just cherry-pick,” Gaul said, explaining that the model works because the platform markets the full range, not only the hardest-to-move homes.
Gaul frames the approach as sharing risk rather than charging for exposure. Because the platform earns only on a closing, its incentive is tied to selling homes rather than collecting subscriptions. The program also includes a cooling-off provision: if a builder leaves, any leads the platform has already delivered remain payable for a defined period, protecting the work done on both sides.
The pitch lands differently in a slow market than a hot one. When homes sold quickly, upfront marketing felt like a reasonable bet; as confidence softens and incentives climb, builders are more cautious with every dollar. A model that ties cost to outcomes, Gaul argues, is built for exactly this moment.
The implications extend beyond a single vendor’s fee structure. If performance-based marketing gains traction, it could shift how new-home inventory reaches buyers and how builders allocate budgets when confidence is thin. It also places pressure on the platform to deliver closings rather than impressions, aligning its revenue with the builder’s own sales results. For an industry where roughly two-thirds of builders are already funding incentives to move product, a model that defers marketing cost until a sale closes offers a way to limit exposure without cutting promotion entirely, though the requirement to list full inventory means builders cannot reserve the approach for only their slowest-selling homes.
