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Realtors listing their own real estate - A smart move?

By
Real Estate Agent with RE/MAX Advantage

I am sure the number of AR members that have listed and sold their own real estate is high and yours truly did the same a long time ago but learned my lesson a few years back.

For whatever reason many of us want to save the sales side of the commission when we list our own properties.  How is this any different from sellers using discount brokers to save part of the commission?

Back in the mid nineties a Broker/Owner of a real estate firm in our area was in the habit of buying and selling a lot of real estate and yes, he listed all of the homes he purchased himself acting as the listing agent.  He also sold many of the listings himself as a dual agent.

On one occasion a buyer purchased one of this Broker's listings and used the same Broker to purchase it.   After a couple of months the buyer's felt they overpaid for the property and also felt they were not given all of their options in terms of financing, home inspections, etc.

The sale of this property went to court and it would take pages to explain the judges ruling which went in favor of the buyers.  One thing that happened is the judge referenced the Broker listing and selling his own property and said this placed him in a position of great liability. The judge stated that any Broker listing their own property placed them at a much greater risk.  This Broker had the buyers sign every disclosure and every indemification agreement that meant nothing in court.

I also sell a fair amount of commercial real estate and it is very common for Brokers and Realtors that own commercial real estate in our area to list their real estate with a Broker of another firm.  They don't feel the risk involved with listing their own property is worth it.

We would all be better off if we looked past saving a commission in favor of limiting our liability.  It would only take one unhappy buyer with an aggressive attorney to destroy a lot of our hard work.

Posted by

Native Idahoan and Boise Idaho Real Estate specialist serving Boise, Meridian Eagle, Nampa, Caldwell and the surrounding Treasure valley area of southwest Idaho. Specializing in residential, investment, land and commercial real estate. Search thousands of MLS listings at Boise Homes for sale and learn all about Idaho by visiting Search Idaho Homes

George Tallabas
RE/MAX Advantage - Nampa, ID
Idaho Real Estate

Brian - Very true and thanks for the comment

Stacie and Jackie - As I mentioned to Dave..Remember, every listing belongs to the broker.  This is why many commercial brokers list their own property with outside companies

Jamie - Thank you and I hope all is well in paradise country

Ron - It is better to sell your own property with an outside company

Greg - Very true

Laura - I don't even think it is wise to list ones own property

Jun 30, 2007 01:47 PM
George Tallabas
RE/MAX Advantage - Nampa, ID
Idaho Real Estate

David - Thanks for sharing and good business practice

Jack - It is like paying Russian Roulette!  They may get away with it for awhile but judgement day will come my friend.

Donna - It is very risky and like my post said, this Broker had the buyers sign every disclosure and every indemnification agreement and still lost the case.  As far as saving the commission on the sale of your own home, how can you blame any seller for not wanting to list with you to save the commission?

Jun 30, 2007 01:52 PM
Dan Tobias
Rodeo Realty - Northridge, CA
Northridge Real Estate Expert

George - Great Blog two years ago I sold my condo. I decided to have my friend list it for me just because of the liability issue. Needless to say he actually gave me back every dime of the commission when it was all said and done.

Jun 30, 2007 02:03 PM
Desiree Daniels
RE/MAX Tri County - Robbinsville, NJ

George - I for one believe and have in the past had someone else represent me in a transaction.  Its just like anything else... you need to take the emotion out and make it all about the task at hand.   I would refer to one of my co-workers to negotiate etc.    Great topic....  I know I wouldn't operate on myself if I was a doctor so I don't see this being any different.  Doctors go to Doctors and Lawyers go to Lawyers.... only makes sense Realtors go to Realtors.  Right?

Jun 30, 2007 02:08 PM
Dan Homan
Coldwell Banker Ellison Realty, Inc - Ocala, FL

I agree with you to a point, some brokers have a policy that agents have to buy and sell their personal property through their brokerage.  The real issue is still personal ethics among real estate professionals.  In y area there are agents so stupid as to sell their homes FSBO.  When I find one, particularly one that does not indicate their lack of confidence in the industry so openly, I make a note to ride any transaction with them even harder.  I have long ago learned n business that the ones you have to watch the closest are the ones who demonstrate that they don't trust you.

Jun 30, 2007 02:12 PM
George Tallabas
RE/MAX Advantage - Nampa, ID
Idaho Real Estate

Dan - Smart move

Desiree - Very well put my friend!  Many Realtors think they can get away with referring their own listing to someone in their own office.  What they do not realize is that listings are owned by the Broker of their own office!  This is why many commercial and farm and ranch brokers use outside offices to sell their own properties.

Dan - Well put.  I have a hard time believing Realtors want to save a commission and yet want the public to believe in paying you and I a commission for our services.

Jun 30, 2007 02:21 PM
Bradley Cohen
Keller Williams Concord/Kannapolis Market Center - Concord, NC
ABR,GRI
I listed an investment property of mine last year. Another agent brought the buyer. I would have never ever represented the buyer. I know that's really dangerous and you are asking for lots of trouble when you do that. I am just happy that I save half of the commission.
Jun 30, 2007 02:46 PM
Paula Henry
Home to Indy Team @ HomeSmart Realty Group - Avon, IN
Realtor - Indianapolis Real Estate - 317-605-4174
George - I have listed my own home, and have also used an agent. Never, never represent myself and the buyer in the sale of my own home. Sounds too scary! There is an agent in my office right now who is doing this very thing,
Jun 30, 2007 03:21 PM
Kaye Thomas
Real Estate West - Manhattan Beach, CA
e-PRO, Manhattan Beach CA
I have listed my own property with proper disclosure but would never want to act as a dual agent.. in that situation a buyer should definitely have their own agent
Jun 30, 2007 03:31 PM
Randy L. Prothero
eXp Realty - Hollister, MO
Missouri REALTOR, (808) 384-5645
One of the things I frequently see from agents selling their own property is that they seem to consistently over price them.  They do not follow their own advice on pricing.  Have you seen the same pattern of behavior?
Jun 30, 2007 07:02 PM
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator
George, having the buyer sign disclosures is not enough.  As I mentioned, you should have the buyer sign the comps that you showed them about the pricing and have them sign something showing you gave them choices in inspectors.  I'm not talking about disclosure notices.  Also, I can save the commission selling it myself because I'm educated about the market and have all the tools to do the marketing and advertising for my own listing.  A FSBO doesn't have those tools and they usually don't know where to start or what to do, plus they usually don't have a real clue to what their home is worth.  Completely different situations.  Plus, I am still able to put a lockbox on my house and allow buyer's agents to show it where the FSBO has to be present for each and every showing and they're probably not going to get many calls from buyers' agents.
Jul 01, 2007 02:09 AM
George Tallabas
RE/MAX Advantage - Nampa, ID
Idaho Real Estate

Bradley - Listing your own property is like an attorney representing himself/herself in court or a Doctor operating on himself.  Sooner or later there is great risk involved.

Paula - I repeat to you my friend what I just wrote to Bradley. There is great risk in listing your own property even if you have another Realtor sell it.

Kaye - Read my response to Bradley & Paula.

Randy -  They are playing with fire to even list their own property.

Donna - Have you ever been to court?  When consumers get to court they often say they didn't understand what they were signing.  A judge will look to you as the professional Realtor and the to the consumer as the victim.  You can have buyers sign all the disclosures, comps and indemnification forms available but when one goes to court many of these forms are worthless.

Jul 01, 2007 03:51 AM
Herb Hamilton
RE/MAX Preferred Inc. Realtors - Portland, OR
Real Estate Broker ,CDPE, Downtown Portland

George : Been a while my friend. We are always held to a higher standard of care. Judicial decisions are notorious for siding with the complainant when we represent ourselves. E&O insurance normally at least in Oregon and the carriers that I am familiar with will not cover an Agent who represents themselves.

Hence the old adage of the agent who represents him or her self has a fool for a client rings true.

Jul 01, 2007 05:29 AM
George Tallabas
RE/MAX Advantage - Nampa, ID
Idaho Real Estate
Herb, thank you my friend.  It was nice to hear from you again.
Jul 01, 2007 11:03 AM
Neal Bloom
Brokered by eXp Realty LLC - Weston, FL
Realtor CRS-Weston FL Real Estate

Hi George,

I have listed and sold my own properties both primary and investment...it worked out every-time except on one deal..where the buyers agent did not keep up with time-lines and we gave them multiple extensions...we ended up having to collect escrow...we wasted 2 months trying to close. But they all knew disclosure of us being Lic. Realtors..we always out it in any contract. I do not favor anyone..just want to close the deal and make everyone happy.

Jul 02, 2007 12:00 AM
Sybil Holcomb
Ayres Realty - Douglasville, GA
I would list my own home but NEVER work both sides.  Just to risky.  Doesn't matter if you've crossed all the T's and dotted the I's.  Some judge someone is just going to have a bad taste in their mouth for that.  In fact I rarely do dual agency.  Makes me to nervous.
Jul 02, 2007 12:30 AM
George Tallabas
RE/MAX Advantage - Nampa, ID
Idaho Real Estate

Neal - you are very brave my friend.  I hire outside companies to hand my own real estate

Sybil - Like I have mentioned.  I do what commercial and farm and ranch brokers do.  I list my own properties with outside companies for liability reasons.  Doctors don't operate on themselves my friend.

Jul 02, 2007 12:49 PM
Sue Argue
Staged First Impressions - Hampton, NH
NH Home Stager
Wow, this is alarming. There are plenty of agents who sell their own listings around here. I never thought a judge would side with a buyer if all documents were properly signed. Great post George.
Jul 04, 2007 04:36 PM
Wendy Montoya, REALTOR® Broker Associate, 254-315-4906
Towne Adams REALTORS - Waco, TX
Something to think about. Never really crossed my mind since I have not sold my own home. Except for by owner BEFORE I became a Realtor. Glad you brought this up, great lesson.
Jul 04, 2007 06:15 PM
George Tallabas
RE/MAX Advantage - Nampa, ID
Idaho Real Estate

Sue - Thank you

Wendy - Yes it is something to think about

Jul 05, 2007 06:51 AM