R.E. Agent Not Sure How To Legally Assign Contract
I have a Pennsylvania real estate license. I only use it for info. gathering through MLS. My broker (as well as some area investors)say that assigning contracts is illegal. Should I enter the contract using a different name(LLC, Wife, etc)? That seems shady. I understand we Realtors play by different rules but it seems unfair. If anyone else can legally do it, why cant a Realtor? My broker says its because assigning contracts is wrong. It's taking advantage of both the seller and the new buyer. :-? What's your take? Anyone?
There are a couple different schools of thought on this issue - if you normally represent sellers as an agent, and a seller tells you they would accept 100k for a house that you know is worth 130k; and you agree to buy it, then assign the contract to a real buyer for $125k - I agree with your broker that the assignment is wrong - you had a fiduciary responsibility to the seller to get them the highest possible price.
However if you go out as an investor, agree to buy a home that might otherwise go unsold - then repackage the home (cosmetics, creative financing, etc) then assign the contract for a profit, there is nothing wrong.
In my opinion, the only thing absolutely wrong is non-disclosure - or hiding the truth until it is too late. I believe being a real estate agent (realtor) while creatively investing in real estate is a liability.
Since you basically work for the broker, and the broker has informed you that it is "worng"; you have 2 choices-->follow his/her advice, or quit.
This is one reason why I have decided against getting my RE license.
Is what you are proposing illegal? NO
Is it unethical? YES as determined by the board of realtors and your broker
Does the same apply if I solely represent myself as my own agent (either buyer or seller, depending on which side of the transaction I'm on)? I've been considering betting my broker's license, if only to put 3% of a deal back into my pocket. Of course, If I were buying a property, I would only represent the buyer's side. If selling a property, I would only represent myself as the seller (thereby avoiding any possible conflict of interest).