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Can a Real Estate Agent buy the property of his client when he has a listing agreement to sell that property?

Hayward, CA |

I am a real estate broker in California and listed a property for sale. I want to buy the property and my client is ok with it as well. I want to know if there is any problem with purchasing her property as long as I do it at a fair market price. Should I include any type of language in the addendum? Can I take a commission still? Either representing myself and the seller, or just the Seller? Any advice is appreciated.

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Attorney answers 3


Over 38 years, I have defended hundreds of real estate agents who have been sued. It often begins by doing something that just does not feel right. Humans by nature can ignore that feeling if they can see a reward, especially if it is financial.
Go get independent legal advice and discuss the following ideas:
1) get independent representation for the seller. An agent is good, but a good real estate lawyer is better. 2) Do not have discussions about the business terms with the seller (deal with the seller's agen or lawyer), 3) Do not even dream of taking a commission. A reduction in price might be OK but a commission as a seller's agent is the kiss of death, and 4) make the Seller's obligation to perform contingent upon her review of an appraisal ordered by your lender (under current regs, neither you nor the loan officer will be allowed any contact with the appraiser).
There will probably be more ideas in the mind of your lawyer. These few will make the transaction somewhat obtuse. That's the idea. These ideas came to me as a recalled watching particularly skilled lawyers examining my real estate agent clients under oath. If you can't get the image.....think about rectal surgery without the benefit of anesthesia.

DISCLAIMER The response given is not intended to create, nor does it create an ongoing duty to respond to questions. The response does not form an attorney-client relationship, nor is it intended to be anything other than the educated opinion of the author. It should not be relied upon as legal advice. The response given is based upon the limited facts provided by the person asking the question. To the extent additional or different facts exist, the response might possibly change. Attorney is licensed to practice law only in the Commonwealth of Pennsylvania. Responses are based solely on Pennsylvania law unless stated otherwise. When answering questions on AVVO, attorneys are prohibited from directly soliciting business. Don't take this as an indication of lack of interest. James S. Tupitza

Christine C McCall

Christine C McCall


Wise counsel. In addition to the risks of getting sued, there are genuine risks of getting the license revoked by Bur of Real Estate. Arms distance negotiations; belt and suspenders as to any issues that can be disputed in the future; independent valuations. If it's a good deal, it needs to be a good deal with all of these factors at work. It's not a good deal if the license gets revoked over it.


You should consult the BRE legal department.

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I'd like to chime in just to say that the State Board governing your licensure may have already addressed this exact situation and a call to them may resolve this quickly.

On a side note, I commend your pro-active approach to this situation and your concern in doing the ethical option.

My answers are for general information only. They are not legal advice. Answers assume California law. I am licensed in California, only. Answers must not be relied upon. Legal advice and counsel must be based on the interplay between specific exact facts and the law. This forum does not allow for the discussion of that interplay. My answer to any specific question would likely be different if that interplay were explored during an attorney-client relationship. I provide legal advice and counsel during the course of an attorney-client relationship only. The exchange of information through this forum does not establish such a relationship. That relationship is established only by personal and direct consultation with me followed by the execution of a written attorney-client agreement signed by each of us. The communications on this website are not privileged or confidential. I assume no duty to anyone by my participation on Avvo because I have answered or commented on a question. Specifically, I assume no duty to respond to any question, comment, telephone call, or email. All legal proceedings involve deadlines and time limiting statutes. So that legal rights are not lost for failure to timely take appropriate action and because I do not provide legal advice or counsel in answer to any question, if you are an interested party you should promptly and personally consult an attorney licensed in the appropriate jurisdiction for advice and counsel. See, also, Avvo's terms and conditions of use, specifically item 9, incorporated by this reference.

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