The property is listed with another real estate company and I am a licensed broker (and also a licensed contractor). I am planning to submit an offer to purchase it above market price, do an extensive remodel ($50K) and sell it for market value. It seems like have have read somewhere that an agent can't collect a commission if he/she is the buyer, is this the case? I would be the buyer's agent representing myself as the buyer.
The property is serviced by Bank of America.
I agree that it is stupid, but if you don't play the bank's game by their rules, they can refuse to play at all.
Have NEVER had them not play. They PAY the commission if you have another agent represent you, have your Broker represent you, or form an entity and represent the entity. Representation can be nominal, in name only. You have the broker pay you, or your team member. It is never even a question.
When I buy a short sale, I ask another agent to represent me, I pay her a referral fee, and I disclose on the contrac that the buyer is licensed realtor. I have never NOT been paid.
By contrast, I had a realtor/buyer on a short sale of mine, after 4 months, the buyer/realtor was denied a commission at the 11th hour.
I used to sell short sales for other agent and pay a referral fee, but I was told by our attorney we can't do that, as it has to be on the HUD for the bank to approve. They won't approve it if it's on the HUD. I'm sure it works that way for the buyer as well.
I've never put a referral fee to another agent on the HUD. Real Estate commissions are not split typically until wire hits broker's account. When an agent from another area refers a buyer moving to your locale, surely you do not put your subsequent referral fee after closing on the HUD? (;->>
I agree, but our attorney said it has to be disclosed. I had never put it on the HUD, but the bank has to approve the commission split according to our attorney and our broker.
Mebbe be lookin' for another Broker? (;->>
I have closed many transactions that brokers were the buyer and have not had any issues with them getting the commission. It really has to do with whether that commission is biting into what the lien holder would like to net.
I believe serveral here are missing the point of the question. If you allow your broker to act as your agent in fact, any commission received would fall under your Independent Agent Agreement. If your split was X, and the property closed, your broker would pay you the X. As a broker, if an agent wanted to purchase something personally, I will represent the agent and pay whatever commission is earned based on the split we've agreed upon. This not only protects the agent, it protects me and my company. It does not matter if you are represented by a corp you own. You are still an agent, plain and simple.
The listing agreement stipulates the commission paid, and defines a cooperating broker's percentage. If the listing agreement says, the seller will pay 20 chickens for a successful sale as a commission, and a cooperating broker will receive 50%, or 10 chickens in return for the buyer. Once closed, you are due your 10 chickens. It does not matter if the bank or lender says otherwise. The seller is responsible. A listing agent must ensure the seller will maintain the terms of the listing agreement. Otherwise, you have the basis for a complaint to be filed. All the lender can do, if there is verbage in the agreement, is to cancel the listing agreement prior to termination with notice without inducing a commission owed. I've been a part where the bank has tried to reduce the commission paid. I've reminded the selling agent's broker that whatever the listing agreement states is what is due. They in turn must work with their seller.
Remember, everything is negotiable. To be certain there is no ambiguity, make sure you use a state approved stip in special stips that defines the commission to be paid within the contract itself.
Arms length is only applicable if the seller will directly benefit from the sale. So long as you are not related, leasing or selling the property back to the seller or their family, etc., it does not matter if you are an agent or not. Even if you were the listing agent, unless there is an issue with your state law, no worries.
Bank of America has a Buyer's Disclosure you must sign as the buyer stating that you do not work for Bank of America or receive direct compensation from Bank of America. Herein lies your only concern with them. If you do work for the Bank, you are forbidden from the purchase. This does not apply if you are an agent for them. You do not receive DIRECT compensation. In other words, you do not receive a Check payable by BANA.
Best practice is to never represent yourself. If something were to arise, you will need someone to have your back.
Agreed and well put. And again, you need only represent your agent purchasing for his or her own account, nominally. They handle the transaction entirely. As far as the entity, where the agent is representing her own entity, the entity is the buyer, not the agent, so there is no need for nominal representation by a Team Member, Colleague, or Broker.
I had one with BOA and they would not allow the agent/buyer to do this. He had is broker sign the contract. His broker gave him the commission.