Can a person own a home and just because they are a Realtor get the commission at closing?

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I know someone that sold her home but advertised it through her realty agency, and was friends with another realty agent. She was the owner of the home but at the closing she got a realty commission along with the money for being the owner. Is that legal? Can you be the owner and realtator too? Is that against RESPA rules? Can someone answer this for me

  1. Reply
    David Z
    July 1, 2011 at 5:07 pm

    You absolutely can do that but what are you concerned with? The sale price was the same no matter what. If she wanted to call part of sales price a commission who cares? She did not collect any money twice here.

    Majority of realtors will wave commisson on their own house because they do not want to pay self empoyment tax on commission. That is 15.3% tax they pay. They are much better off just collecting proceeds as seller.

  2. Reply
    July 1, 2011 at 5:26 pm

    legal but it must be advertised as owner realtor. That must be disclosed

  3. Reply
    July 1, 2011 at 5:41 pm

    Yes, completely legal. The information (owner agent) has to be disclosed on the MLS, but it does not effect the price or commission, or teh income tax that has to be paid on that commission.

  4. Reply
    dog ma
    July 1, 2011 at 6:17 pm

    Of course – how do you think Realtors buy and sell their own properties? It is not at all against RESPA rules as long as it is fully disclosed to the buyer or seller. And there are certainly some costs of doing business that must be paid, so why would the Realtor not take a commission?

  5. Reply
    July 1, 2011 at 7:10 pm

    Of course it’s legal. The agency listed it and did the work. How they distribute it is up to their contract. It wasn’t listed as “For Sale By Owner” so there is a commission to be paid.

  6. Reply
    July 1, 2011 at 7:14 pm

    as long as the seller/agent discloses his or her interest in the property…its perfectly alright. It is not against RESPA. Their commission comes out of the sale price (which you would have to agree upon) so it doesn’t change anything..regardless of who is the one to receive the commission in the end. It be like any other agent. Again, as long as its been disclosed to you that the selling agent (or buying agent) is the owner of the property you’re interested in..its all good.

  7. Reply
    real estate guy
    July 1, 2011 at 7:47 pm

    of course. However, the bigger question is: why is it ANY of your business?

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