Posted by Ed Copp (OH) on October 08, 2000 at 11:30:33:
The commission is a matter of negotiation between you (agent) and your broker. If the broker is one of the good guys he might just give you the whole commission to help with your down payment. He might not too (negotiate). You might also be able to get the sellers to pay the closing costs, etc. In the previous post I thought that your name would currently show on the title. Your idea of using the commission as part of the down payment is often done, and the commission will show up as taxable income for you. Good negotiation.
I was involved for quite some time with a rehab propety which belongs to a partnership consisting of my friends.
(I was the person who flipped it to them. Today I am still helping because of the distance. These particular ownres/investors/friends are out of state.)
I have signed up for a course and soon will have the license. (I want a license for verious other reasons, not ncessarily in connection with this case.)
Question: The rehab will soon be ready for sale. It will most likely be sold to my family member or, possibly I myself will purchase. If so, will I have a right to receive a commission? My friends do want to involve a Realtor anyway. I’ve heard a few different opinions. I would very much appreciate an answer from this board, the source I trust most, naturally. I may not participate all that much… but I read the posts all the time… Thank you!
Posted by Ed Copp (OH) on October 08, 2000 at 08:07:09:
Why would you want to take funds that are coming to you anyway and convert a portion of that money to a fully taxable commission?
You do not mention how title is held. This could be a source of problems and bad feelings. Since you will get a commission ant the others will not.
Doing this transaction as an agent will also involve your sponsoring broker, what will his commission be?
It seems to me that it would be better to do the transaction without taking a commission. You might want your broker to oversee the deal for a small office fee. If this transaction takes place after you become licensed be sure to disclose that you are licensed on the purchase contract.
The funds are not coming to me anyway. How? If I myself (or a family member) would purchase we could use the commission toward down payment or closing costs??? (I already had some small profis from the flip LONG AGO. My involvement now is not documanted.) When an agent purchases is s/he entitled to a commission (part of which would go to broker)? Please be so kind and answer again. Thanks.
If a property is not already listed in MLS I wouldn’t worry about the commission. Why are you? It drives your price up, usually, because the seller is out that 6% and will usually try to make it up on the price. (They will be less flexible on price.) Do you want the commission are a better deal, if it is your own? I’d take the better deal all the time. Like I said, if it’s not already listed. If it is already listed, then you are entitled, because if you don’t take it the listing agent will. And you shouldn’t try negotiating around the fact that the listing agent gets the full commission if you don’t partake, because then you could be sued for interference with a contract (the listing, between the listing agent and the seller!).