It dawned on me today that licensed brokers, when purchasing properties for themselves, could act as both buyer and broker, and thus receive the commission as extra cash back at closing. Is this common practice for brokers? seems like a good idea to me, but I’m totally new to this stuff…
Ive heard of investors getting there brokers license in case they hand a deal they cant do to someone else but not of that.
even though this is not related to my original post, I was hoping you could elaborate? i don’t quite follow the situation you are describing… why a broker’s license is needed to hand off a deal to someone else… thanks
Not to hand off a deal but to hand off a deal and get a commission for it. Without a license they are not obligated to give you one.
I’ve done it on my last deal. Basically the drawback is that you have to disclose that you’re a broker. The listing agent hadn’t dealt with it before, but didn’t seem to care that I was a broker. We did the usual negotiation of the price. It actually went pretty smoothly because I was experienced in the transaction and the seller was motivated.
The other way to do it is to have another broker in the office represent you in the transaction with the agreement that you’d get your full share of the commission. Usually if you can produce, the broker won’t mind. Typically in the case where it’s your own property or deal, the commission split could be anywhere from 90-100%. The 100% split comes from some offices that give you all of the commission but just charges a desk fee.