Legal Question on Compensation for Real Estate Agent

5 Replies

In need of some advice, pending legal consultation with my attorney.

I am a licensed real estate agent in Michigan, but do not practice as one. I have a friend who lives in Texas & I viewed several properties he's going to buy, took photos, and retrieved info from the seller for him since we are both local and he isn't. Essentially I was just an assistant for him. He found the seller and negotiated the sale himself. 

At closing, he has proposed the title company paying me through a JV Agreement a "marketing" or "administrative" or "consulting" fee for helping him. There isn't a real estate agent involved, and I didn't act as one. Anyone unlicensed could have done what I did.

My question is can I be paid directly without violating licensing law? It is unclear to me as I did not act as a realtor or negotiate the sale, but it could appear that way. I'm unsure if I could be paid directly for providing a service or if my brokerage must take it in. 

Thank you!

@Joshua Stratton

The fact that you are a licenced realtor elbeit a non practicing, one could argue you were practicing real estate and are being paid a commission. Call a broker in your state with a national Brokerage and have a chat or the RE attny at your local board.

If it Looks like a Duck, Quacks like a Duck ..... It's a Duck

Even if you had an active license in Texas, only you broker can collect a commission . So no you cannot .  With an inactive license you cannot even collect a referral fee from an agent in another state 

A few rounds of golf Or a Lions game should cover it

Originally posted by @Joshua Stratton :

In need of some advice, pending legal consultation with my attorney.

I am a licensed real estate agent in Michigan, but do not practice as one. I have a friend who lives in Texas & I viewed several properties he's going to buy, took photos, and retrieved info from the seller for him since we are both local and he isn't. Essentially I was just an assistant for him. He found the seller and negotiated the sale himself. 

At closing, he has proposed the title company paying me through a JV Agreement a "marketing" or "administrative" or "consulting" fee for helping him. There isn't a real estate agent involved, and I didn't act as one. Anyone unlicensed could have done what I did.

My question is can I be paid directly without violating licensing law? It is unclear to me as I did not act as a realtor or negotiate the sale, but it could appear that way. I'm unsure if I could be paid directly for providing a service or if my brokerage must take it in. 

Thank you!

If you're not on the MLS, the selling agent will likely keep everything. They have no reason to pay you at this point, and you're not entitled to any commission since you're not on their MLS.

@Joshua Stratton

I am not sure what the laws are in Michigan but here in Texas you wouldn't be able to. Any commission you receive must be given to you directly through your brokerage and there are no exceptions. It seems like you do have an active license and if that is the case then it makes yourself even more liable if you were to try and get a commission on the side somehow. I would definitely steer clear of this 100% or talk to your broker on what you can do. Also if everything was just stated verbally and not written or within a contract then you may not be able to go forward with getting paid in general. 

@Joshua Stratton  As others have already point out, no, you cannot be on his closing disclosure/settlement statement as any sort of fiduciary or transaction broker, but if he values your "off-line counsel", there is nothing stopping him from writing you (Joshua Stratton) a check, gifting you merchandise, or giving you anything of value for reasons other than that transaction.  No paper trail, just a friend recognizing value from his friend.  No big deal.