Expert: Karyn Foley - 5/23/2006

Question
Four people, (two couples/husbands and wives) purchased a house together to fix-up and sell.  One of the four people is a realtor working for an agent.  If all the labor, expenses and revenue were to be shared 50/50 for each couple, is it fair for the one person to benefit all the commission from purchasing the house as well as selling the house?  

Answer
Dear Mary Ann:
 Yes, it is fair, as the agent is using expertise and knowledge to the best advantage of everyone, and has costs relating to his business, car, gasoline, flyers, photographs, time, effort and espeicially errors and ommission insurance and extreme liability and accountability to all parties.  What needs to also be taken into account is the fact that your agent is working uder his company's Broker and probably is on a split, meaning part of the brokerage fee goes to him and part goes to his company.
 However, is it right?  That is up for discussion among all principals in advance of any purchase and in advance of any sale.  The timing is off if you and the others are miffed after the fact.  This is a tough situation among friends and could spoil a relationship.  I can understand how you feel, but as an agent, I can also see the agent's side of the situation.
 The agent should give you guys a wonderful gift, but it is illegal to pay a commission to an unlicensed party.  But, rebates can be given if all parties and principals to the transaction are aware.  
 In essence, if it makes you uncomfortable,next time either discuss this is greater detail in advance of the situation, or go to an independant, neutral agent of mutual choice who can work solely in your behalf and make you more comfortable with the process.  Friendships and bad feelings are seldom a matter of principle and almoswt always principally a matter of money.
 Hope it works out 'cause it is probably making causing a
bad situation in your friendship.
karyn foley