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When agents / brokers buy a property for themselves, is it customary for the buyer/agent to get the "selling agent/broker" split of the commission as a credit at the closing? Or does the listing agent try to get all of the commission, like they do when a buyer agrees to dual agency? Also, I heard that a major real estate company recently told its agents that they could no longer represent themselves when buying or selling their own property. They must instead use another agent from the company as the listing and/or selling agent. Ugly rumour or ugly truth?
Hi law. When an agent purchases a property, it is up to them as to how they want to deal with their commission. The listing agent has already said he will give xx% to an agent who brings a ready, willing, and able buyer. If that buyer just happens to be me is of no consequence.
When I structure my offer, I may ask to reduce the price by that amount and thus not take any commission. I may ask that that amount go towards closing costs, etc, or I may take it as commission.
The listing agent does not keep all the commission, they have already stated what they will share.
I have not heard that a major RE company told its agents they would need another agent to represent them. I would think that may be more of a local thing. A local broker-owner of a franchise may have decided to do that, BUT I find it HIGHLY unlikely, and here is why...
Most agents believe in thier product, PROPERTY. So, they typically purchase property when they can. Some they flip, some they hold and rent. But agents who stick around will tend to build wealth through property. If a broker made that rule, he would probably lose many agents..... Who want the freedom to buy and sell with little overhead expense... other than their own. it is a perk of the job. Like working at a dept. store and getting that discount or working at Ford and buying a truck for wholesale.
The obvious advantage of taking the commission out of the price is that you don't then have to pay taxes on the income. You'd need to check in your area to determine how you'd write that into the contract. In Oregon we have to be careful due to the laws that prohibit commission sharing.
There is a difference between representing yourself on your own personal property vs. representing yourself on an investment property. Many agents here have another agent within their firm handle the sale of their personal residence.
As for the commission issue, I have had it both ways. Some agents have taken the commission, and some have written a separate letter stating that they are waiving their portion of the commission from the MLS. Remember the listing agreement, MLS agreement, and Purchase and sale agreement are all three different contracts.
The only thing to consider is that the listing agreement is not between the listing agent and the selling agent, but between and the listing and selling broker. Some brokers may not allow their agents to waive the selling commission. The first brokerage I worked with permitted one personal transaction with waived commissions within a 12 month period.
Location: Danbury CT covering all of Fairfield County
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I am doing a transaction where the buyer is an agent and I work for the sellers. Our attorneys tried working on a way where the buyer would use his commision toward closing costs, but his bank won't allow that. So in a couple of weeks when we close, he be getting a check to sell himself a house and he told me he will be using most of that money toward upgrades he wants to do.
I'm not Silverfall, but I have an answer, as I'm doing that when I list my house in the next couple of months...
When you list a house and have to disclose that seller is licensed agent, and then the seller is also the listing agent, buyers automatically assume they're saving a commission and they'll probably come in lower thinking the seller has more wiggle room.
When you have someone else list the property and still disclose the seller is an agent, but the listing agent is someone else, the buyers think the seller is paying someone else to help sell their home, and that they're not necessarily saving a listing commission.
It's all a psychological look on who is getting how much. I don't want the buyers to think I'm "saving" any money when I'm only looking for market value.
To take the emotion out of it.
That hired professional should be more objective.
Agents fall in love with their homes, too.
Yep.
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