Buying a Short Sale as an Agent, Commission?

Question

My partner and I are both licensed agents in Washington. We want to form an LLC and purchase a short sale to flip it. My question is, will the bank still pay us the buyer’s side commission?

Will the banks sell the property to an LLC?

Also, if the buyer is the LLC, are we still required to disclose that “the buyer is a licensed agent?

Thanks,

Minna Reid · Answer

That would not make the buyer an agent, but if you are acting as an agent in this transaction, you are related to the buyer and that would also likely cause a problem with commissions.

Russell Brazil · Answer

They will likely not pay you a commission, and yes you still have to disclose you are an agent. Some banks will still pay it, but most will not.

Mike Cumbie · Answer

Account Closed,

Another thing to consider, if you get paid a commission a couple things happen.

1) You pay income taxes on your commission.

2) Depending on how assessments work in your area you could pay higher taxes.

So I'm all about the sales price looking as low as possible (at that juncture) and your income being as low as possible.

Just my 2 cents and good luck

Ron S. · Answer

You would have to disclose the nature of all relationships in the arm's length affidavit.

Account Closed · Answer

Thank you everyone! So what we will do is just say, hey we are agents so no need to pay commission. But we will adjust our offer price accordingly.

Account Closed · Answer

ok, follow up:

If the LLC is owned by my wife and my partners wife, neither of whom are agents, do we have to say the buyer is a licensed agent?

Would this be considered unethical?

Brett Goldsmith · Answer

Likely no commission if servicer notices. It's better to have someone else represent you.

Ron S. · Answer

That will make things cleaner for sure doing it that way and remove the "arms length" issues you would have surely had. Then you'll only have to deal with the counter they come back on for the lower offering price...maybe. At the end of the day, they have the same data you have so chances are they'll know you are adjusting the offer lower for the loss of commission. Nothing wrong with you offering based on that logic but don't be surprised if they come back 2-3% higher. They might not but this is the real estate business...

Russell Brazil · Answer

You have to disclose your relationship to family members, and will still likely be disqualified for collecting a commission on the transaction

Buying a Short Sale as an Agent, Commission?

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