I am Real Estate Investor and Landlord that has made regular direct with seller off market residential purchases for buy and hold purposes over the past year and plan to continue to do so for the years to come (approximately 5-6+ purchases a year). Leads are sourced through a variety of methods (e.g. mail marketing, driving for dollars, wholesalers, etc.)
I recently obtained DC and VA Real Estate licenses with the intent to use the licenses primarily to sell personal and investment properties as well as to act as an agent for certain leads and contacts. There may also be some uses for the license on the buyer's side.
I have not yet hung my license with a broker. But have a serious concern. I am contemplating joining exP.
eXP and many other brokers have clauses in their Agent agreement stating "Agents are expect to transact ALL real estate business through the Company. Transactions that are processed outside of the Company shall be grounds for immediate termination." AND for Agent-owned properties "The parties must use standard forms and sales contracts".
It appears this prohibits:
- *Any direct with owner transactions (meaning, you must run all purchases through your broker, and you will pay fees and broker commissions when buying a property. eXP does allow 3 somewhat "Free" personal transactions per year, but after that all broker commission splits apply).
- *Purchase contracts with a buyer not on standard forms
With the understanding that we must disclosure we are an agent when buying directly from an owner.
- For you Agent Investors:
- 1. How are you handling direct with owner transactions? Processing each one through your broker and paying fees?
2. Using standard sales forms and contracts? Not able to use your own purchase agreement terms?
Once you become a licensed individual, you forfeit completely oversite of your own real estate business. All real estate related activities will come under the supervision of both your broker, and your states department of licensing or real estate commission. ALL real estate related activities.
@Russell Brazil. Thanks for your reply.
Interested in how all of the licensed Agent Investors on BP are handling such transactions and any tips for direct with owner transactions.
Using standard brokerage contract templates and processes? Paying broker fees on all transactions (notwithstanding the # of "free" personal broker transactions)?
Also keep in mind that your E&O insurance will typically not cover you when you are a principal to the transaction.