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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 38801
Experience:  Retired (mostly)
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Can a licensed real estate broker, working under another brokers

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Can a licensed real estate broker, working under another brokers license as a broker/associate, get paid a fee, not a commission, from an end buyer, for assigning a sale and purchase contract between the broker/associate (buyer) and the seller, to that end buyer and under the name of another business entity, which is not a real estate brokerage office? If so, (or not) what disclosures need to be made?

If I understand the question, you are entering into a contract with a seller to purchase real property for cash, and then selling the contract to a buyer in exchange for consideration/money.

Assuming that the seller knows in advance of your singing the sales contract that you intend to assign the agreement to a third party, and that if you cannot, you will purchase the property yourself, then I don't see any problem with your proposed conduct. You're a real estate broker, so you're entitled to negotiate real estate transactions. If you choose to do this as a participant in the transaction, rather than as the representative of either buyer or seller (or both), then there's no law or regulation that would stand in your way.

However, if the seller does not know that you intend to assign the contract to some other buyer, or the substance of the agreement is that if you cannot find a buyer within some time period, that you can cancel the deal, then what you would actually be doing is creating an exclusive listing agreement under a different name, and then negotiating the deal with a buyer, but without the seller's participation.

This could easily be viewed as a breach of fiduciary to the seller, in that you are looking to sell the property for less than it's highest and best price, and you are masking the agreement to make it appear to be something other than an exclusive agency listing, perhaps for the partial purpose (too many "p"s), of avoiding agency liability.

So, if the first scenario is what you are doing/contemplating, then I see no problem. If it's the second scenario, then stop, before it's too late, because you're going to lose your license, and you may get sued for the 25% discount that you are taking on the deals, which should be paid to the seller.

Hope this helps.
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