Acting as agent and Principal

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Acting as agent and Principal

Robert Obniski
Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes

Hello all,

I am purchasing a property as the Principal, in my name. I am also acting as the buyer agent. 

Per Wisconsin code REEB 24.05  - It states... 

A licensee acting as an agent in a real estate or business opportunity transaction may not accept any fee or compensation related to the transaction from any person, other than the licensee's client, principal firm, or firm the licensee is associated with without prior written consent from all parties to the transaction

I take full responsibility of not knowing this law. It was incompetence. But I'm here now and I have to deal with it.

 Im reaching out to this community for advice in regards to this situation. In our budgeting, we are absolutely (now more than ever) counting on receiving the stated commission. Unfortunately we don't have anything in the contract regarding paying out commission to the buyers side. 

Who here has dealt with this? Or perhaps found a way around it? Or can think of one?

Help me out!

edit: I have reached out to my attorney already. Im asking for different perspectives.

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Joseph CacciapagliaBusiness Member
Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
6y

I don't understand how the quoted text is creating a problem for the scenario that you're describing. Were you trying to do this deal without going through your brokerage? If so, I see why you're having an issue. If not, then just ask your broker what you need to do. In every state that I've worked, getting paid a commission on your personal transactions was allowed, it just needed to flow through the broker. I've never worked in WI though, so I don't know for sure.

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  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    6y

    Personally if it was me DISCLAIMER: Not licensed in your state, just rambling:::

    I would reach out to the other agent and ask for an addenda (better yet have one created and ready to go) that states "All parties acknowledge that buyer is a licensed real estate agent". I know if someone reached out to me I would just write it up like another addenda. If they start having issues with it, then I would offer to back out and apologize (They won't choose this option). 

    Some agents relish at the opportunity to report or start ethics issues. Most in my experience don't and will most likely know you are just writing up an addenda and have it signed. NOW..... If you said things like "My client won't go for that" or "My client likes it but..." and tried to deceive them in some way it may be different. If you were above board from the beginning (or at least not faking you had a client) teh best course is to come clean with the listing agent and get something on paper.

    Just my 2 cents

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  • Joseph CacciapagliaBusiness Member
    Lender · San Antonio, TX · Member since 2020 · 1k+ posts · 1k+ votes
    6y

    I don't understand how the quoted text is creating a problem for the scenario that you're describing. Were you trying to do this deal without going through your brokerage? If so, I see why you're having an issue. If not, then just ask your broker what you need to do. In every state that I've worked, getting paid a commission on your personal transactions was allowed, it just needed to flow through the broker. I've never worked in WI though, so I don't know for sure.

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  • Robert Obniski
    OP
    Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes
    6y
    Originally posted by@Mike Cumbie:

    Personally if it was me DISCLAIMER: Not licensed in your state, just rambling:::

    I would reach out to the other agent and ask for an addenda (better yet have one created and ready to go) that states "All parties acknowledge that buyer is a licensed real estate agent". I know if someone reached out to me I would just write it up like another addenda. If they start having issues with it, then I would offer to back out and apologize (They won't choose this option). 

    Some agents relish at the opportunity to report or start ethics issues. Most in my experience don't and will most likely know you are just writing up an addenda and have it signed. NOW..... If you said things like "My client won't go for that" or "My client likes it but..." and tried to deceive them in some way it may be different. If you were above board from the beginning (or at least not faking you had a client) teh best course is to come clean with the listing agent and get something on paper.

    Just my 2 cents

    In the offer to purchase we have it spelled out that the buyers (my wife and I) are licensed Wisconsin real estate agents. It is also spelled out (need to confirm) that this offer was drafter up by "Me - Brokerage name"

    Ive spoken to the agent and he is refusing to work with me. Knows there is no legal way out of this deal and the closing is very soon. I don't believe he is one to seek out these opportunities I just think he knows the ball is in his court.  

    Im just confused...i'm doing all the work of an agent of my brokerage and i happen to be a buyer. Why wont my brokerage get paid in this transaction??

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  • Robert Obniski
    OP
    Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes
    6y
    Originally posted by @Joseph Cacciapaglia:

    I don't understand how the quoted text is creating a problem for the scenario that you're describing. Were you trying to do this deal without going through your brokerage? If so, I see why you're having an issue. If not, then just ask your broker what you need to do. In every state that I've worked, getting paid a commission on your personal transactions was allowed, it just needed to flow through the broker. I've never worked in WI though, so I don't know for sure.

    We are not trying to avoid our brokerage. We've been under the assumption we do this deal like every other. Our brokerage represents our buyers and we happen to be the buyers, representing ourselves. Im meeting with our attorney tomorrow morning. But this is just crazy to me as Ive been expecting a $13,000 commission check. 

    Hopefully good news comes tomorrow.

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  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    6y

    From what I have read. I don't see where they can't (or are not obligated to) pay your brokerage based on your original post. The seller is not paying you (they never do) they pay their brokerage, then their brokerage pays yours. Who in return pays you. 

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  • Russell BrazilBusiness Member
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    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    6y

    Your brokerage still gets paid whatever is listed as the cooperting fee in the MLS. If the listing agent refuses to pay it, allow the 2 brokers to work it out.

    This is assuming it is not an REO or Short Sale, where commission is often not paid to the buyers agent on their own deals.

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  • Robert Obniski
    OP
    Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes
    6y
    Originally posted by @Russell Brazil:

    Your brokerage still gets paid whatever is listed as the cooperting fee in the MLS. If the listing agent refuses to pay it, allow the 2 brokers to work it out.

    This is assuming it is not an REO or Short Sale, where commission is often not paid to the buyers agent on their own deals.

     Im trying to understand this myself. Im trying to see it from his angle. Could he be under the impression that I am not going through my brokerage? What other scenarios could he justify for this?

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  • Robert Obniski
    OP
    Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes
    6y

    https://dsps.wi.gov/Pages/BoardsCouncils/RealEstate/PositionStatements.aspx


    6th one down.. 

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  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    6y

    Was it on the MLS and had a cooperating broker fee available? Did you find it there and make an offer based on that information?

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  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    6y

    Are you an agent or broker? Please realize all we know is contained in this post. We have zero idea what "his position is". Start from your original post and read down.... thats what we know. Did he tell you he wasnt paying? Did he decline your bill? Did this close? Was it listed? Is your brokerage listed on some admin page? Simply tell your broker to call his. The above quoted texts does not stop his brokerage from paying yours because he "feels that way". I suppose your broker could decline to pay you, but the listing agent doesnt get to decline.

    Disclaimer: not licensed in WI and just rambling

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  • Robert Obniski
    OP
    Investor · Madison, WI · Member since 2015 · 128 posts · 33 votes
    6y
    Originally posted by @Mike Cumbie:

    Are you an agent or broker? Please realize all we know is contained in this post. We have zero idea what "his position is". Start from your original post and read down.... thats what we know. Did he tell you he wasnt paying? Did he decline your bill? Did this close? Was it listed? Is your brokerage listed on some admin page? Simply tell your broker to call his. The above quoted texts does not stop his brokerage from paying yours because he "feels that way". I suppose your broker could decline to pay you, but the listing agent doesnt get to decline.

    Disclaimer: not licensed in WI and just rambling

     I am the buyers agent in this deal. The buyer is myself and my wife. Both of us a licensed Realtors. Both of us are listed as buyers. 

    We have not closed. Closing is scheduled April 3. 

    I was communicating with the title company, letting them know about fees, commissions, etc.
    Title comes back and says the sellers agent notified them that I am not receiving a co-broke commission on this deal. It is listed on the MLS that a 2.4% commission is being offered.

    After I was notified of this, I called the agent for clarification and his response it "Well yeah it's the law. I do tons of deals like this one and it's the law that if buyer and agent are the same person, he is not entitled to the commission unless written in the contract and signed by all parties."

    I work for a small town, small time brokerage and he works for Keller Williams in Milwaukee. Im speaking with my attorney soon. Hopefully he can come up with something

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  • Marcus Auerbach
    Investor · Milwaukee - Mequon, WI · Member since 2010 · 5k+ posts · 7k+ votes
    6y

    @Robert Obniski comission is governed by the listing contract and subsequently by the MLS. You have disclosed the fact that you are licensed. The offer to purchase is an agreement between the buyer and the seller. The listing contract is between the firm and the seller. One can not change the other. I have only seen it that some REO/forclosure sales will not pay commission the licensed investors.

    Don't argue with the agent. Have your broker reach out to the listing agent's broker to resolve this.

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