Licensed agent buying a primary residence Entitled to commission?

Question

Hi all,

I am a licensed real estate agent putting an offer in on my primary residence. If I put in my own offer, am I entitled to half of the commission?

Thank you!

Lien Vuong · Answer

Yes, with the exception of REO/Auction properties.

Erik W. · Answer

@Bud Gaffney, waive your commission and ask Seller to reduce the price by a corresponding amount. Otherwise, you'll have to split your commission with your Broker and pay taxes on it.

Scott Anderson · Answer

Waive your commission and ask for a corresponding price decrease. Unless you need cash.

Michael Noto · Answer

@Bud Gaffney Absolutely you are if the listing lists a commission for the buyers agent. Some foreclosures have written in their contract that an agent will not be entitled to a commission if they are purchasing the home. It is clearly specified though either in the listing notes, purchase contract, or online bid submit page.

Kase Knochenhauer · Answer

@Bud Gaffney - all day long. The listing agent would have to follow the terms established in the listing agreement and advertised on the MLS. It won't matter if you are the buyer.

Marcus Auerbach · Answer

First, make sure you disclose in the offer that you are a licensed agent as a principal! Second, check with your broker, they might have special requirements.

Asking for a price reduction in lieu of commission is a bit more tricky than it sounds. Commission is governed by the listing contract, which is an agreement between the listing broker (not the agent!) and the seller. You are entitled to a portion as the sub-agent; so that is money you get from the listing broker. The sales price however, is up to the seller of course - so you are mixing money from two parties if you ask for a reduction in lieu of commission. You need an ammmmmmmendment to the listing contract signed by the seller and the listing firm, and a OTP with a discount signed by you and the seller. And your broker may or may not be okay with being cut out of the deal.

Can it be done, but complicated. I'd rather pocket the commission AND try negotiate the price a little.

Greg K. · Answer

@Scott Anderson That's the way to go to avoid taxable income. Also, it's worth checking your liability insurance to make sure you are covered in a transaction representing yourself. Usually, purchases are covered but sales are not.

Bud Gaffney · Answer

@Kase Knochenhauer Thank you Kase!

Licensed agent buying a primary residence Entitled to commission?

Licensed agent buying a primary residence Entitled to commission?

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