real estate law question

[Twigg]

In the state of Texas, can any attorney collect commission when they purchase a home when representing themselves? A buddy of mine told the rule was revised and it is now not allowed. I am selling and they are buying with no agent. What commission is typical here?

thanks guys.

 

[ousuxndallas]

Not a lawyer, but it depends on what's in the contract. A buyer typically puts language in the contract specifying that their agent shall get a market commission paid for by the seller.

If you are the seller, you can negotiate this point. The commission is negotiable, just like every other thing in a purchase agreement.

 

[madscientist]

do you have an agent? if so, then your agreement with that agent probably states that you will pay a 6% commission. usually, the listing agent will split this with the buyers agent. so this is between your realtor and the buyer. i'd have your realtor contact the title office that they work with most often and ask the title attorney.

if you have no agent, then why not just negotiate the price without commission? i would think the seller would rather have a better sales price than receive a taxable commission.

 

[Meursault]

In reply to:

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[voteforhank]

From the Texas Real Estate Commissions Legal Hotline: FAQ

After twice showing a prospective buyer one of my listings, he informed me that he was a licensed attorney, would prepare his own contract offer, and demanded to be paid the cooperating broker’s fee in the transaction. He does not have a broker’s license. Can I pay him the coop fee? Do I have to pay him?

Answer:
While the Real Estate License Act prohibits sharing a broker’s fee with a person not licensed as a broker or salesperson "for services as a real estate agent," an essential element in the definition of a real estate agent is that the person performs an activity described in Section 2(2) of the Real Estate License Act "for another person."

Since a principal in a transaction does not act for another person, he would not fit the definition of a real estate agent. Therefore, a broker is not prohibited by the Real Estate License Act from sharing a fee with a principal, regardless of the principal’s profession.

Although a broker may share part of the broker’s fee with a principal, there is no requirement that the broker do so. Concessions of part of the broker’s fee to a principal is a business decision of the broker. However, brokers should consider sharing the fee with a buyer/principal only with full disclosure to all parties, including the seller, the listing broker, and any lender involved in the transaction. Any fee-sharing arrangement should be included in the contract.

It should be noted that the Real Estate License Act prohibits a broker from sharing the broker’s fee with an attorney who is not a principal but is representing a party to the transaction.

 

[SippeeKup]

yeah, but you realize that licensed attorneys are exempt from TRELA right? TRELA prevents a broker from sharing their commission with a non-licensed broker, but, the Seller can pay the commission to the attorney. So, tell the listing broker that the Seller is going to pay them 3 points and pay you the other 3 points. Of course, they will think they deserve the 6 points because of the tremendous value they have added.

Amateurs.

 

[Drew Shirley]

SippeeKup is correct.

 

[Twigg]

Thanks guys..very helpful.

 

[txre]

Here is a thought,suppose the listing agreement specifically states the commission for non-mls members is less than three percent .