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I know that one must disclose they are licensed when buying a property as an investment .
But I’m wondering about how this works in terms of working under a broker . If you are buying a property directly from a homeowner for example you won’t be charging a commission therefore the broker wouldn’t be making their standard commission . So I could see them being upset about this possibly .
Or if you are buying direct from a homeowner can you just use your own contract and disclose you are licensed but not have to submit anything to the broker where you hang your license ?
If you plan to use your license more for investing does it just make more sense to go with one of the “100% commission” shops where you pay like $500 or so per transaction ?
Are the big national franchises like KW , C21 etc wary of taking on agents that want to do their own investment deals?
It's something that can be negotiated with your brokerage. At our KW office, we have several agents who do some of their own flips on the side. I don't know what their arrangements are, but I think by default we can do one personal deal per year without having to pay the standard brokerage split.
All activity involving using a license must go through the brokerage. All Brokerages should address this in the IC agreement.
This is how it is in Oregon too. All purchases and sales made by a licensee go through the brokerage in which they hang their license. There is no option to not go through the brokerage.
Every brokerage does things differently. Some have a minimum fee per transaction, some allow one personal property for no charge, etc. Most real estate agents that don't want to represent people but focus on investing hang their license at two specific brokerages in my town. I am sure your city has the same thing.
What if you are licensed in one state but want to purchase in another state ?
I’m guessing you still have to disclose you are a licensed agent in X state ? But I’m guessing the broker your working under doesn’t have to get involved since your license and their brokerage location is in another state ?
All activity involving using a license must go through the brokerage. All Brokerages should address this in the IC agreement.
It's somewhat different in Michigan. Here, licensees are required to go through a brokerage when selling property in which they have an ownership interest, however they may sell their principal residence on their own. A licensee may purchase real estate without going through a brokerage, but written disclosure about licensure needs to be made before an offer is signed.
I know that one must disclose they are licensed when buying a property as an investment .
But I’m wondering about how this works in terms of working under a broker . If you are buying a property directly from a homeowner for example you won’t be charging a commission therefore the broker wouldn’t be making their standard commission . So I could see them being upset about this possibly .
Or if you are buying direct from a homeowner can you just use your own contract and disclose you are licensed but not have to submit anything to the broker where you hang your license ?
If you plan to use your license more for investing does it just make more sense to go with one of the “100% commission” shops where you pay like $500 or so per transaction ?
Are the big national franchises like KW , C21 etc wary of taking on agents that want to do their own investment deals?
I'm not sure if you are newly licensed or not but if you are you are going to have to get some deals behind you in regular (if there is such a thing) arms length transactions.
When the market imploded I bought a lot of homes at the trustees sale, rehabbed and then subsequently relisted with CB. At the time I already had 100-150 transactions under my belt and assured the big boss that I was not putting any liability on CB's shoulders. I also negotiated that I could do 12 flips / year and only had to pay 6% (franchise fee) of a 2.5% commission on the listing side. Always paid 3% to the Buyers Agent. So it really depends on the Broker and the Broker's Company policy plus I was bringing in additional business besides my flips.
I'm not sure if you are newly licensed or not but if you are you are going to have to get some deals behind you in regular (if there is such a thing) arms length transactions.
When the market imploded I bought a lot of homes at the trustees sale, rehabbed and then subsequently relisted with CB. At the time I already had 100-150 transactions under my belt and assured the big boss that I was not putting any liability on CB's shoulders. I also negotiated that I could do 12 flips / year and only had to pay 6% (franchise fee) of a 2.5% commission on the listing side. Always paid 3% to the Buyers Agent. So it really depends on the Broker and the Broker's Company policy plus I was bringing in additional business besides my flips.
Sounds like you did quite well during the downturn . I actually just passed the state exam late last month and do not currently have it with a broker .
It sounds like it’s a YMMV type of situation where one could negotiate as you did but I could see they would be more comfortable with it considering you had hundreds of transactions prior .
Let’s say if an agent purchased an MLS listed property for themselves as a licensed agent you would be entitled to a commission if you represented yourself . Let’s say this commission is $10,000 . The split with your brokerage is 70/30 . This would mean the broker would be entitled to $3,000 for a property you purchased for yourself?
Yep the math could work out that way, it may also depend if you are buying it to live in or as a rental or flip. I remember you just sold your place a little while ago so probably would be to live in. May want to reduce the sales price instead of taking a commission but again will have to be talked about upfront, prior to your association.
If you present yourself well you may be able to pull off no commission (or little) if you can convince the Broker that you are going to be busy and bring lots of transactions to the company.
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