Expert: liznarr - 7/29/2008

Question
I am a very new Realtor who got their license to sell new homes for a builder. I was not trained at all, and have since left that job.  I am in the process of buying my own home and can't decide if it is the proper thing to do to collect a commission on it, plus I would have to join a new brokerage (with all those fees) to do so. What do you suggest? Is it normal for Realtor's to collect commissions on their own purchases?

Answer
Hi Caitlin,

If there is no rule in your area against collecting a commission for your own purchase, I encourage you to collect it.  The Seller would have to pay it to somebody, and it may as well be you.  In my area, unless a Seller refuses to pay a commission to a licensed agent, it is not unusual for an agent to collect a commission on a personal purchase.

Make sure if YOU are the selling agent that you make the proper disclosure that you are a licensed agent.

If you have to join a new brokerage and pay fees in order to collect a commission, you have to first add up your fees and then subtract them from the commission you would earn.  If you have enough left over to justify joining a new brokerage, then go for it.  At least your real estate fees would be paid for the next year, and you might make more sales during that time.

You did not say what the status of your license is now – whether you are on an inactive status with the Real Estate Commission, or if you are in a referral company.  

Depending on the status of your license, another avenue you might try is to simply ask the listing agent to work with you since you were once an agent.  Using hypothetical numbers, if the total commission were ten percent, and the listing agent would normally split one-half the commission on a co-broke sale (each side receiving five percent), ask the listing agent if you let him write the offer if he would take six percent and deduct the remaining four percent from the sales price.  

In an instance such as this, the Seller would only pay a six percent commission at closing (versus ten percent), and the price could be reduced accordingly.  The broker-in-charge of the listing company would, however, have to agree to this, but both the broker AND the listing agent would take home more than they would on a co-broke sale – and you could receive the benefit of the four percent reduction in the sales price of the house.

A third option could be for you to place your license in a referral company and ask the listing agent to pay you a referral fee if you let him write the offer.  If the listing agent refuses, perhaps you have a friend (or any agent) who is licensed and would act as the selling agent for you and pay you a referral fee.

Good luck to you, and feel free to write again if you have additional questions.

Regards,
Elizabeth