Buying property for your own as Realtor

6 Replies

Hi,

I'm a new Realtor and want to buy a house for myself. I have not yet sold or bought a house for clients. What do you do as a Realtor if you want to buy a house for yourself? Do you buy the house through your broker with the disclosure that you are a real estate agent as well (and get a split of the commission)? Or do you buy the house without your broker or any other agent (with the disclosure that you are an agent, but now just buying for yourself without acting as an agent).. and do you negotiate a lower selling prices with the seller because they don't have to pay a buyer commission? 

Or does anyone have another idea?

Thanks

Hi @Ellen Holter , when I purchased my home I received the commission. I think it will depend on if you find the property on the MLS or not. If it is on the MLS, you would want to go through your brokerage. If it is through a wholesaler, there aren't any agent fees anyway. If you find the property yourself and negotiate with the seller, I would have them lower the price and not pay the commission. That way you won't have to pay the broker split and pay taxes on the money.

Some other things to think about... 

1. Since this is your first transaction, it might be nice to have your brokerage look over your documents and ask them questions.  If you don't go through them, you won't be able to have them double-check your paperwork. 

2. If you don't use your brokerage, you won't have E&O insurance. That might not be a big deal, but something to keep in mind.

Hi @Ellen Holter

1) If you purchase a property through the MLS, you must disclose that you are a real estate agent and use your brokerage. They would have to pay your brokerage for you to get the commission. You should always take the commission and TRY to negotiate the price and ask for seller credits (if possible). I would not recommend NOT taking the commission or lowering your commission to negotiate.

2) If you purchase a property thats not in the MLS such as for sale by owner. You still must disclose that you are a real estate agent but you can negotiate the price and not take a commission.

Hope that was helpful and good luck on finding your 1st property! :)

Thank you so much @Brad Hammond and @Eudith Vacio . One more question if you don't mind :-)

I’m licensed for Washinton DC, but I found a property for myself in Maryland. Just a few minutes away from DC. I’m waiting to take a state exam test for Maryland. 

I know I can write a referral for one of my colleagues agent (working for the same broker). What is a normal referral split if one of my colleagues will do the paperwork? 

Thank a lot. 

@Ellen Holter I do not like representing myself, so I will have someone from my team represent me. You can also ask someone from your office, offer them 50% or even just 25% to write and present the offer, handle inspection for you. After inspection is settled you can take over. Good to have a buffer in between.

@Ellen Holter If you're uncomfortable, going the referral route may be the best way to go either way. You can offer to take 25% on the commission split, and not only do you get to collect on your home purchase, but you can learn and ask all the questions you want along the way. If you choose a colleague you trust, and is willing to hold your hand through the transaction, it can be a great learning experience for you without risking looking inexperienced in from of clients (because you are the client). This scenario could be a real blessing for you.

Originally posted by @Ellen Holter :

Hi,

I'm a new Realtor and want to buy a house for myself. I have not yet sold or bought a house for clients. What do you do as a Realtor if you want to buy a house for yourself? Do you buy the house through your broker with the disclosure that you are a real estate agent as well (and get a split of the commission)? Or do you buy the house without your broker or any other agent (with the disclosure that you are an agent, but now just buying for yourself without acting as an agent).. and do you negotiate a lower selling prices with the seller because they don't have to pay a buyer commission? 

Or does anyone have another idea?

Thanks

 As an agent, the commission offered does not belong to you. It belongs to the broker, so you are not able to negotiate a lower price based on waiving the commission.

All transactions must flow through your broker as a licensee. Trying to do it outside the supervision of your brokerage would be illegal.

You must disclose you are a licensee and what brokerage you are with in all real estate related activities.

The disposition of the commission offered will be handled pursuant to your independent contractor agreement with your broker. Many have a better split for personal transactions, but not usually if you havnt completed a certain amount of transactions first. 

Also remember, as a licensee, you are responsible for knowing 100% of the laws and details involved. Theres no, I didnt know that excuse. Once your licensed, ignorance doesnt protect you. Simple things, like non disclosure of private sewer charge can be $30,000 mistake for instance. Saw a novice agent on the opposite side of a transaction from me make that same mistake that cost their client to the benefit of mine.

E&O insurance doesn't cover personal transactions, so be aware of that.