Are Retail Agents allowed to list their own Novation Properties?

Question

I have been an investor for 15 years, primarily buying rentals/fix-and-flips in MD/VA/WV.

This year I received my Real Estate License and started up an acquisitions arm of my company so I'm not buying flips from wholesalers or at retail prices.

Some deals we've been getting I'm passing on because they don't hit my criteria to flip, but would be good "Novations" or "Wholesales".

My question is, can I as a Licensed Agent list my own Novation Deals? To me it's a nice middle-ground between wholesale and retail because some of my sellers don't have money to fix up the place in case inspections come back with requirements, so I'm willing to offer my companies services to do those things, and in exchange I would expect a higher return on the profit outside of just the commission.

Mark Updegraff · Answer

@Dustin Summers I own a brokerage and invest myself, and I’d approach this carefully.

I think there are two separate issues here. First, what contractual interest do you actually have in the property? Second, what are your responsibilities as a licensed agent when representing that interest to buyers and sellers?

Just because a transaction structure works for an investor doesn’t automatically mean it can be marketed the same way as a traditional listing.

I’d want my supervising broker and a qualified real estate attorney to review the agreements, agency relationships, disclosures and marketing before putting anything on the MLS.

Are you doing these in Maryland, Virginia or West Virginia? The specific state’s requirements could make a material difference.

Dustin Summers · Answer

Yeah, and I get it, I guess I'm just confused about what are the alternatives then for this seller? Traditional cash offers are 40% - 50% ARV... the house is worth more than that. But maybe to pass inspections, certain things need to be done in order for it to qualify for a VA/FHA/Conventional loan. I'm suggesting that my company can help so we can open up the seller to receive the broadest buyer pool.

I have a deal that qualifies for this both in Maryland and in Virginia (I live right on the border).

Are Retail Agents allowed to list their own Novation Properties?

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