I know you don’t need a real estate license to invest. However, I have been looking to get mine for a while and get into the agent side also. the main reason I want to get it is so that if/when we buy and sell properties we can keep a good chunk of the commission. Does anyone see any problems with rehabing houses and selling them as an agent owner or other issues that may arise?
Thanks!
just as long as you let the buyers know you are an agent, that’s important. remember, one of your ethical responsibilities with any party is honest and fair dealing.
also - when/if you BUY any of your listings, it’s best to give up the commission - self-dealing can get sticky.
when/if you BUY any of your listings, it’s best to give up the commission - self-dealing can get sticky.
Can you elaborate on that a bit? My wife is getting her RE license for MLS access and buying properties.
The point here is that if you, as an agent, buys a property that you have listed there may be a question of whether or not you have acted in the best manner for your principal - the seller. For example, you could offer $100K when, if you worked harder or really looked at all offers, the property could have sold for $120K.
Many brokerages will not allow an agent to purchase his/her own listing because it brings up the issue of whether the agent is really acting on behalf on the principal or are acting for their own benefit.
If you are going to do this you should protect yourself by giving the seller a full disclosure. Even with a full disclosure the seller may decide to sue later.
Oh… okay. I gotcha. With what we are doing my wife will be the buying agent on bank owned properties that are listed with OTHER agents. We will buy the house, rehab it, and then list it with either my wife or another agent (not sure on that one yet). Thanks for the explanation.
That’s an interesting perspective on buying your own listing. I don’t think it’d be likely that it would happen too often. I did speak with someone who wanted to sell his house quickly and I made him a low ball offer because I wasn’t really in the market for his type of property. He did decline and I did mention that he could probably get more for it, but time was money. If I bought the property, I would have never listed it.
As for what you’re doing, it’s a good plan on the commission side of things. I’ve worked with other agents that have tried to sell their own property and I’ve seen it work right and not work right. The key mistake that the agent makes is if they act like it’s a FSBO. They get too emotionally involved and can’t maintain it as an arms length. Key mistake is when receiving an offer, never counter in the same phone conversation, say think about it then call back a little bit later. Agents who try to do it all in one conversation seem to end up saying too much and regret it later.
A pro would probably tell you to list it with another agent so you can do an arms length transaction. You could probably work out a deal with the other agent as to the percentage split. Typically when you do a listing, say if it was 5 percent, you’d typically offer 2.5% as a co-broke and your half would be 2.5% and then you’d split that with the office. When it’s your own, around here the split can be 90% yours and 10% office so you would end up saving 2.25% of that commission if you were an agent. Some other offices can offer even higher splits and some go to 100%, but then you have to pay fixed monthly fees. Depends on what kind of volume you plan on doing.