Do I need a listing agreement with LLC that I am part owner of?

Question

Hi everyone! I recently became a licensed real estate agent in VA (signed paperwork w/broker yesterday) so that I can have access to the MLS and list/find properties for our team. I am part owner of the LLC that will be purchasing and selling the properties. My question is, what kind of paperwork do I, as the agent, need to complete if I am selling the property? I am thinking I will need to have a listing agreement signed by the seller (LLC) and my broker. Is that the procedure even though I am part owner in the LLC? I guess this is something I can ask my broker too, but while I am waiting on my license to be finalized, thought I'd see what people have done. Thank you in advance.

Brian P. · Answer

The quick general answer is as a principle you don't need to list. But, yes the famous but, your written agreement with your broker will usually cover the selling and buying of properties you own and you will need to comply with that or get it changed, or change brokers to one that will allow you to do what you want to do.

Some agents believe if they are a owner of a property  they should be allowed to list and buy through the MLS and their office, and pay no commission to their broker and I felt that was ok as a broker because I wanted my agents to own and invest in real estate. But when an agent just wanted to use my office to buy and sell something they for example were a 5% owner of, I felt they needed to pay the office 95% of what the office was entitled to. I didn't want an agent to just use us for their own business purposes and generally not contribute fairly to the office and it's overhead even though in their brain they felt it wasn't costing me anything  to let them be there.

To many newer investors wanted to join my office because they knew I was a active investor and thought I would just give them all the perks for free, and really wanted to give very little, if anything in return for everything they were getting. Some kind of investor code that I never heard of,  I lost nothing by cutting these free loaders loose as quick as possible. So to cut out the free rides I had a minimum quarterly fee that had to be paid either through production or cash, I finally went to a monthly fee and 90% of the commission to the agent. New agents could chose to be on a straight split for the first 18 months If their goal was to become a active agent.

Natalya Safronova · Answer

@Jeff W. Got it. I will definitely check with my broker. Thanks for your response.

Jeff Wallace · Answer

@Natalya Safronova

It depends on your broker's policy.  I have never prepared a listing agreement for my own properties or properties held in an LLC with partners...

Natalya Safronova · Answer

@Wayne Brooks Thanks for confirming. That makes sense.

Natalya Safronova · Answer

@Mark Creason That's a very good point. I do not have POA for the LLC. There are three owners - me (agent), my boyfriend (business development), and a friend (contractor). We each have equal shares in the ownership. If I understand what you are saying correctly, in TX, all three of us would have to sign the listing agreement as the seller? If that's also the case in VA, I will have to look into the POA.

Wayne Brooks · Answer

Yes, an authorized signer for the LLC has to execute the listing agreement...otherwise, there is no listing contract.  Same as signing a purchase on behalf of the LLC.  Remember, the listing agreement is between the LLC and your Broker, not between the LLC and you as the agent.

Natalya Safronova · Answer

@Brian P. I absolutely believe that the broker is entitled to their commission on the properties I sell that our LLC owns. They are letting me hang my license with them and providing training and marketing assistance to a brand new agent so I definitely don't have any issues with having a listing agreement from that aspect (especially since they take a very small per transaction fee anyway). I am surprised to hear that agents will sign with a broker and then not want to pay them what they duly deserve. How do they expect the broker to make money?? A little bit greedy in my opinion.

I guess what I was really wondering about is whether it is normal to be involved in a transaction both as a 'seller' and an 'agent'. If I understand correctly, it sounds like this is normal practice so I think you answered my question. Thanks so much!

Do I need a listing agreement with LLC that I am part owner of?

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