Commission or lower sales price?

Question

Hello,

I'm a Licensee and I invest in RE with my business partner. When we buy MLS properties; Would it benefit us more to take the commission or should I decline the commission for the sake of lowering the purchase price?

The bulk of my personal income is tax-free and I only have 1 rental in my name that counts towards my taxable income.

Are there other aspects to this question that are outside of the tax realm?

Thanks for any input!

David Rawls · Answer

@Joe Homs

I'm 100% disabled from military service. The VA pays me disability each month and thankfully its tax free.

Mitch Stanley · Answer

Food for Thought- Gordon Moss spoke at Paper Source Symposium last week from a 20/20 hind sight , the paraphrase comment was - Instead of taking so many hair cuts on commissions , I should have taken a percentage of the equity / property when asked to take a haircut.

Gordon is a great speaker & he's speaking soon re Notes at Dana Point.

Mitch S.

Christopher Phillips · Answer

@David Rawls

In that situation, many will forego the fees to make the deal work. But, it all depends.

The complicated part is that you have a partner. So, taking fees and then also splitting profits can get complicated.

David Rawls · Answer

@Christopher Phillips

Its an investors brokerage and I receive 100% of commissions earned.

Christopher Phillips · Answer

@David Rawls

depends on where you hang your license. if you are hanging it with a broker, it's up to your office.