Can Brokers Buy Their Own Listings?
Brokers and salespeople surely have a right to buy real estate, the question is under what circumstances.
If Smith lists a home and later wants to buy it, Smith has access to information which may not be available to an arms-length buyer. Realistically, anyone in Smith’s brokerage firm may also have the advantage of such information.
At the same time, the owner wants to sell the property and does not care if Smith, a Smith salesperson, or someone from Mars buys it.
For Smith, or anyone in the Smith office, there must be full disclosure, in writing and in advance of any offer. Part of that disclosure should be a recommendation that the seller seek an independent appraisal as well as the advice of an attorney before accepting any offer. In other words, the seller should not be dependent in the bargaining process on the broker-turned-buyer — someone who likely influenced the original selection of a sale price and terms.
As to fees, it can be argued that a broker/buyer is best served if no commission is paid so that possible agency issues and conflicts can be avoided.
Instead, the broker/buyer can offer to buy the home at a given price and terms. The owner can then compare that offer and its terms with any other offer for the property.
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