Posted by dealmaker on July 13, 2005 at 07:31:12:
It may sound odd at first but let’s look at the facts:
Your parents listed the house for $625K.
They agreed to pay a 5.79% commission which results in a net to them of $589K.
They agreed to the sales price of $589K.
My only concern is that that they shopped the listing around and knew that 625 was FMV. If it’s not the agent may be verging on “self dealing”, which is generally a violation of their code of ethics. If he is in fact a Realtor.
Broker bought our house and charged commission - Posted by Ted
Posted by Ted on July 12, 2005 at 23:31:20:
My parents live in California. They listed their home with a friend’s son who is a real estate broker. He works on his own and doesn’t employ any agents. After accepting their listing, the broker decided to buy my parents’ home himself. He paid $589K which was their asking price of $625K minus his 5.79% commission. Essentially, he charged my parents commission to sell their home to him. He recorded the sale of their house at the lower price so that his property tax basis would be lower. Is this ethical or legal?
Re: Broker bought our house and charged commission - Posted by Squidly TX
Posted by Squidly TX on July 13, 2005 at 16:41:31:
Real Estate agents have a fiduciary duty to look after the best interests of the seller. It is a part of the agency relationship and the contract they signed for him to represent your parents.
With this in mind, as long as he discloses to your parents what his commission is, and the final selling price, he has not violated his fiduciary duty, and it is perfectly in his right to buy at that price, and for your parents to accept that price. If he misled your parents into selling for less, or ?swindled? them out of their property, then you might have a case.
If you still are curious about it, I would contact the local Board Of Realtors in your city and ask. They can tell you about specific rules they have about this exact situation.