Does anyone have experience as a Designated Broker selling their own investment properties? I'm pretty sure the Broker cannot get a commission of any kind. Is that correct? If an agent in the brokerage handled the listing, would they be able to get their commission or would the bank knock that off the HUD?
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Thanks for your replies, Wendy and Thom. I'm thinking the broker's name is not on the HUD, the company's name is on it, so there may not be an issue with the lender. However, I didn't think about the E & O coverage, good point.
Christine - At the end of the day, if the Broker is also the Seller, he has to disclose it and it's not Arm's Length (between the Brokerage and the Seller) Also, as I said before, talk to your E&O Carrier - and - be careful if you're thinking about double-ending it..........
There's bigger issues than the commission. I suspect the E&O carrier will not cover these transactions should anything go wrong. The Broker needs to have a colleague in another Brokerage handle these for him/her so there is absolutely no conflict and it's a true Arm's Length. Check with the E&O Carrier / Agent.
I don't see why another agent in the office could not list the Broker's properties as a short sale and get paid. Your point seems to be the Broker normally gets a portion of the agent's share. It would seem so nit-picky for a lender to go as far as to analyze a Broker's independent contractor agreements to determine if a portion goes to the Broker (short sale seller). Broker's are paid in different ways, and this normally would be to a business entity (e.g. ABC Realty), not the Broker personally anyway. Is this a situation in progress?