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Yep, illegal in Michigan too. Just tell that conniving builder to get his own license and you'll be happy to work out commission arrangements with him.
Depending on my mood that day, I might even turn him in to the State. My guess is he's offered the same deal to a number of other agents. And let me guess, he wants YOU to set up this shell company so that he doesn't have to claim his earnings?
Actually I think this one is best referred to the legal beagles. As the developer is a participant in the deal I see no reason why you can't rebate part of your commission to him. He is not a third party.
In Nevada it is common for Agents to be incorporated as LLC and get paid through the LLC. Nothing illegal about it. I am skeptical that is illegal in either AZ or CA.
My hackles do rise on the passing of the commission through a shell. There are reasons for doing so but some at least are fraudulent. It may however be only an ethics problem for the developer without legal problems. Of course we all know that all developers are very ethical right?
I just took my test and if I remember correctly one of the questions was "Can you (not you, but your broker because only a broker can share commissions) share your commission with a non-licensed person?" I answered "No". I hope I got that one right. I'm pretty sure I did. I think that you know that it is wrong. If it were legal in your state you would know already by reading your real estate books for your state. I hope that you don't partake in anything illegal. It gives real estate agents a bad name and some of us (I will be one soon and I was an appraiser for 6 years) feel that real estate agents get a bad rep already.
I just took my test and if I remember correctly one of the questions was "Can you (not you, but your broker because only a broker can share commissions) share your commission with a non-licensed person?" I answered "No". I hope I got that one right. I'm pretty sure I did.
You got it right. In AZ, only active licensees can receive compensation for a real estate transaction.
I think you are missing one important thing here. Although you have got these listings, they actually belong to your Broker. Any commission earned from a sale belongs to your Broker, and then he pays you your split. If you are not a licensed broker you cannot be paid a commission on any sales because at closing your commission is made payable to your broker and then he pays you, unless he has already agreed they can pay you your split directly but very few brokers allow this.
Even if you set up a shell company you cannot receive a commission and no title company would allow you to be paid as it is illegal.
If anyone was going to negotiate this it would have to be your broker. This sounds very illegal and extremely underhanded and it does sound as if you are trying to rationalize it in your mind. Believe me, this sort of thing that can destroy your reputation, because when your broker finds out you were considering this you likely will not be working with Coldwell banker anymore and your reputation will be destroyed. Unless you are new to the business you should know our business is all word of mouth.
..."Can you (not you, but your broker because only a broker can share commissions) share your commission with a non-licensed person?"
I want to amend my previous answer to this question. In AZ, it is legal to rebate comission to the buyer to be applied toward closing costs. So in that limited sense you can share commission with a non-licensed person.
I am a real estate agent through a broker, and a builder has offered me exclusive listings if I form a company and share the commissions with him.... Can I do this? I am too afraid to ask my boss....
You've already received responses from others so instead of multi-quoting just going to say ditto to all those that said it's illegal. YOU do not get paid directly, the brokerage where you hang your license does, plus listings at least according to most contracts belong to the brokerage - not an individual agent. I'll be very honest with you: As a BIC and owner, I actually did have someone 'try' to do something like this and when I got wind of it, they were out the door faster than you can say 'don't use me as a reference'. Even in Panama it's illegal and was when I practiced in the States.
The thing is just your statement 'I am too afraid to ask my boss' tells me that in your heart you know it's wrong. So just some friendly advice and that's stay away from the 'dark side' or you could end up without a license and/or a brokerage who's willing to let you hang it with them.
In my state, Indiana, you cannot share a commission with an non-licensed person. I think this is the case in most states. You cannot even give a non-licensed person a referral fee.
Why would you want to share the commission with the builder anyway? Sounds to me like this builder is trying to be super cheap with you doing all the work and you not getting paid much for your time.
If he wants his houses listed, why can't he just list them with you and pay for the services he uses? You could put in the contract that he doesn't have to pay a commission if he can sell a house on his own.
hey Coldwell, for the time and cost of working for a builder, why in the world, would you want to offer him a commission, when in fact you are doing them a big service by doing all the work and if the builder has any smarts at all, then he should include his profit in the cost. It would be wrong in about any state and sounds like the builder wants to double dip. So offer him a reduced price on your listings and if built correctly and the right way, then no problems in selling, as long as priced right! Another thing to consider, all the agents that I know that do exclusive listings, feel cheated as they dont have time to help clients with other properties, sort of a negative.
Totally legal in Idaho, if the builder is the seller. In Idaho, an agent can legally share commission with the buyer or seller. I think we are in the minority though.
Of course, if the builder is the seller, then you can "share" your commissions by selling the house for a reduced commission in the first place. If you take the listing for 1.5% instead of 3%, you have given 1.5% worth of profit back to the builder.
Trying to get you to form a separate company to do it makes me suspicious though. That sounds like they are trying to hide it.
And yes, even if it is legal in your state, your broker would still have to agree to it, since the commission technically is theirs. If you are afraid to ask your broker, you are either in the wrong line of work, or at the wrong brokerage. That is what your broker is there for, to advise you when you have questions.
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My guess is he's offered the same deal to a number of other agents. And let me guess, he wants YOU to set up this shell company so that he doesn't have to claim his earnings?
