As a realtor, you’re used to helping other people not only find their dream home but also make their dream home a reality. What happens when you get a listing that turns out to be your dream home?
Can a real estate agent buy their own listing? Or, must you give away this listing to a competitor to make a legal purchase? Assuming you’re good at your job, you’ll obviously be the best person to handle the deal, but how do you make sure that it’s fair for the seller?
Let’s take a closer look at how a realtor buying a house for themselves might work.
Can a Real Estate Agent Buy Their Own Listing?
The main factor you need to remember is that real estate agents are generally held to a higher standard than other buyers. You need to manage your property interests with the highest ethical standards, as well as be aware that your reputation as an agent is on the line at all times.
Before jumping into whether you can buy your own listing, let’s take a quick look at whether you can actually represent yourself as a buyer at all. Then, we’ll also look at the pros and cons of doing so. After all, just because you can do something doesn’t necessarily mean that you should.
Can a Licensed Real Estate Agent Represent Themselves in a Purchase Offer?
Can a real estate agent buy their own home? Even if you are not ready to buy your dream home now, as a realtor, you may be wondering the same thing.
The short answer is, yes. There’s no reason why you couldn’t represent yourself in a house purchase. However, while it is legal for a real estate agent to buy their own property, you should still consult a real estate broker and review any local state regulations.
One of the main benefits of representing yourself in a house purchase is that you have more control. All communication with the seller is also more direct. Any correspondence regarding house viewings, offers, and negotiations will all come to you directly from the seller’s agent.
As a result, you will be saving a lot of unnecessary to-ing and fro-ing between a further intermediary agent that would normally be representing you as the buyer. The other main benefit is, of course, commission.
Can You be Your Own Realtor and Get Commission?
One of the most apparent reasons a realtor would want to represent themselves in any house purchase is to collect the commission on the sale.
Even when you share the commission with your broker and the seller’s agent, a single deal is still usually worth thousands of dollars.
What Are the Drawbacks to Representing Yourself in a Real Estate Purchase?
Despite these two fantastic benefits, many realtors still choose to have someone else represent them when buying and selling their home.
One of the reasons you may decide to let another salesperson handle your real estate purchase would be your lack of expertise in the market. Perhaps you have plenty of expertise within the commercial real estate market or selling city center apartments, but you have no experience selling suburban homes.
It’s times like these where you may be better off letting a more experienced colleague help find and broker a deal for you. They’ll have all of the information you might need on neighborhoods, schools, crime rates, and historical property values for you to make the right deal.
Another drawback to representing yourself is your inability to remain completely impartial. This is usually more of a problem when it comes to selling a home rather than buying a home.
It’s easy to become emotionally attached to a home, especially one you’ve raised your family in or one that’s been in your family for generations. Many agents will choose to have an agent other than themselves handle the sale of a home so that they may receive impartial and objective advice.
Can a Listing Agent Buy Their Own Listing?
So, what about a realtor buying a house for themselves from their own listings? This is where the situation gets a little trickier due to the potential conflict of interest that may arise.
As you know, as a seller’s agent, it is your fiduciary duty to act in your client’s best interests. This includes getting the highest possible asking price for them for their property. Most prospective buyers want to get the highest price possible; how can you get that for them but the lowest price for you?
Once announcing that you are hoping to buy your client’s property, your seller may be worried that you’ll weed out other offers from the competition. It’s for this reason that many agents would choose to pass the seller onto another agent immediately.
In some cases, the client may ask to be represented by someone else when they find out your intentions of buying. However, as long as there is full disclosure of the situation and both parties are happy, there is no legal reason why this transaction can’t happen.
Perhaps you will agree to outbid the highest offer, or the seller may decide to sell the property to you after a specific period has passed. Ensure that whatever terms and conditions you’ve both agreed to are abundantly clear and that your clients are 100% happy with the situation. If you find it challenging to remain objective at any point, you should immediately step back and consult with a broker.
How Can I Capture More Leads?
If you do choose to hand the sale over to another agent to avoid any conflict of interest, you may be wondering how you can capture more leads. The good news is that you can easily replace this lead with more prospective buyers and sellers by having your own website.
Head over to Propopen.com to see how easy it can be to create your own stunning website to help you capture, nurture, and convert more leads.
Real Estate Agents Need Homes Too!
Not only can a real estate agent buy their own home, but they can also collect the commissions that would normally go to the buyer’s agent. Although there can be drawbacks to making the deal yourself, the commission you make on the sale could allow you to make a better offer that clinches the deal.
Still, when it comes to answering, can a real estate agent buy their own listing?, things get a little trickier. When asked about this, many agents said they’d prefer to hand it off to another agent to avoid any potential conflict of interest issues.
Nevertheless, so long as proper disclosure is made to all parties, and you’ve checked and conformed with any specific requirements of your state’s regulations, you can make the deal.