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Updated almost 14 years ago on . Most recent reply

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Conflict of Interest in Negotiation?

Daniel Bradshaw
Posted

Hey guys, I have a lengthy scenario and a few unique questions so please bare with me.

I am getting my real estate license right now to hopefully broker some deals and make some money to later put into starting a real estate investment company. Let's say two other partners and I start an LLC to invest in real estate and we get a homeowner to come in and do a short sale. After the homeowner comes in he says lets do a short sale so we sign a purchase agreement, I get him to sign a document allowing the LLC to negotiate on behalf of him with the mortgage company, I get him to sign a document allowing us to list the property on the mls for resale(during negotiations), and also I get him to sign an agent contract saying I am his real estate agent during this transaction. So the next day I or one of my other partners(on behalf of the LLC) contact the bank to start negotiations.

Is there a problem here? Would it make a difference if it was a partner talking to the bank instead of me (for LLC)? Conflict of interest? Can I represent the homeowner and My company who is trying to buy the house? Also say we did get it and resell it, do i just pay my broker out of my commision or of the actual profit my LLC makes?

Sorry if this doesn't make any sense. Any help would be appreciated.

Thanks,
Daniel

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Jon Holdman
  • Rental Property Investor
  • Mercer Island, WA
14,128
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Jon Holdman
  • Rental Property Investor
  • Mercer Island, WA
ModeratorReplied

Is your llc going to hire a separate buyers agent? Will the offer state you are acting as a transaction broker? If the offer says youre acting as the listing agent when in fact you're also the buyer, this sure seems like misrepresentation to me.

What does your broker say about this?

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