Posted by Vic on August 13, 2003 at 14:53:45:


Good to meet you! I’m in New Orleans. How are things over there in Lake Charles.



Posted by Cas on August 12, 2003 at 10:58:50:

  1. If a RE Broker is purchasing property for his own account, isn’t he entitled to commissions for the transaction as he would if he were representating a different buyer ?

  2. If the RE Broker is entitled to commission can he reduce the amount of DOWN PAYMENT in lieu of the commission ?

  3. Can he use the commission for for CLOSING COSTS ?

  4. Can he reduce the PURCHASE PRICE in lieu of the commission ?


Re: Way off track - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on August 12, 2003 at 19:56:08:

is where you are.

As a very long time broker, let me comment. For a broker to take a commission on a transaction where he is the purchaser is a conflict of interest … Period.

The source of the commission is always from the seller, at least that is where the commission arrangement begins. So there is an agency relationship formed with the seller and the broker. This is true even if more that one broker is involved. The broker represents the seller who is providing the commission money.

Now along comes the buyer who is also a broker. If the broker/buyer shares in the commission then it would be presumed that he is representing the seller. It could also be reasonably presumed that he would be representing himself, as an investor. This would be at best a dual agency situation. The dual agency is legal in some states, in some cases but is very questionable.

Presume now that later on the seller cries foul. Would you think that the seller was more knowledgable or the real estate broker? Do you think that the seller could possibly get a fair deal in this situation. Don’t stretch your immagination, just think like a jury.

It is my opinion that when a commission is involved that I am obligated to represent the best interests of the person who provides the commission. If it becomes a contest between myself and them, and I have a lot of influence on both sides, I win just about every time. That is because the contest is unfairly slanted in my favor.

I prefer that the seller has other representation if at all possible, then I prefer to abstain from the commission. This eliminates all the questions about ethics. It is a bit more of a problem without the commission in the mix, but it is not worth the problems that can arise.

Not So Fast… - Posted by Vic

Posted by Vic on August 12, 2003 at 22:52:37:


Your post assumes that all brokers/agents are loyal to the seller. That is not always the case. It just depends on what state you are in.

In my state of Louisiana, the agent is assumed to be working with the person he is working with. He is not automatically a sub-agent of the seller.

Some states have transaction brokerage,where all the agent does is facilitate the transaction. In either of these 2 instances I just mentioned, there is nothing wrong with a buyer who also happens to be an agent taking a commission. It’s also possible that the buyer could be his own buyer’s agent.

Also, your argument of dual agency does not hold up either. Dual agency is when the same agent represents both the buyer & the seller. As a buyer & an investor of a listed property (that is not your listing), you are just representing yourself only, either as a sub-agent of the seller or a buyer’s broker or just under a state’s particular law. You are not dealing with the seller & buyer at the same time.


Agree with Vic… - Posted by Anne

Posted by Anne on August 14, 2003 at 15:27:09:

In Colorado, there are tranaction brokers, dual agents, sellers agents, and buyers agents. The type of representation for the buyer/seller is signed and agreed upon (usually during the first encounter). Actually, I think these types of multiple agencies are becoming more and more popular, for resolving the reasons that Vic brought up.

My significant other is a broker, and we’re using his commission towards buying furniture when we purchase our new home.

Re: We disagree - Posted by Ed Copp (OH)

Posted by Ed Copp (OH) on August 13, 2003 at 15:26:25:

Admittedly I am not familiar with your states laws. Your state is incidentally the only state that has law based on French common law.

I am not stating law here, but what is my policy for me. When I represent myself, and when the commission comes from another source there are two parties involved. Some could figure out how to call that a dual situation.

Re: Not So Fast… - Posted by Jeffery (La)

Posted by Jeffery (La) on August 13, 2003 at 13:01:21:

Off topic, here, Vic, but what part of Louisiana are you in?

Lake Charles, LA

Just To Clarify This Further - Posted by Vic

Posted by Vic on August 14, 2003 at 03:52:52:

Ed’s personal opinion is that he doesn’t feel comfortable taking the commission as a licensed broker. That’s fine. However do realize that that is the way that he feels about it & it doesn’t mean that you couldn’t accept a commission.

I can understand where Ed’s coming from because up until a couple years or so ago in Louisiana (my state) & many other states as well, all brokers were assumed to be working for the seller (therefore trying to get as much money for the seller as possible).

As you can imagine this caused a big problem because buyers generally weren’t being represented. Many of them didn’t even know this though. As a result many states looked at agency & many implemented changes in how people were represented by agents. Thus transaction brokerage & other types of agency came about.

In the states that still have laws on the books, where all agents represent the seller, it would be hard to represent the seller on a property that you want to buy for yourself where you are trying to get it as cheap as you can. Therefore Ed’s logic is not to take the commission, thereby avoiding being accused of not getting the best deal possible for the seller.

This is Ed’s viewpoint, albeit an extraordinarily conservative one & probably an unnecessary one. If I was in one of these states, I would not refuse the commission for this reason, because all buyers are trying to get the house for as cheap as possible. So long as you disclose that you are an agent in the purchase agreement, there shouldn’t be any conflict or problem with you accepting the commission regardless of which state you are in.

Hope this clarified it some.


Re: We disagree - Posted by Cas

Posted by Cas on August 13, 2003 at 22:39:41:

Hello Ed :

Is your response to my question based on your personal policy, and not on law or commonly accepted broker practice ? Is your response personal opinion, as opposed to standard practice ?

Please clarify