Does becoming a licensed real estate agent/broker before buying your home save you money?
February 16, 2010 by Editor
Filed under Real Estate FAQ
I am planning to buy a home around $700K in New York City. I’m wondering if I will save any money by becoming a licensed real estate agent/broker (I realize I have to take the test and pass) and then purchasing the home for myself. I would think that by doing this, I would save the broker commission that I would otherwise be paying another real estate agent/broker. Is this a valid assumption? Please provide any information about this. Thanks a lot.
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Normally the seller pays most brokerage commissions. Therefore if you are the buyer you would only be required to pay closing cost or you might add to the sales contract that the seller pay all closing cost, this is sometimes acceptable.
The only way that you would be required to pay a commission is that if you found a For Sale By Owner (FSBO) and you have decided to use a buyers agent. If the FSBO decide or refuse to pay your buyers agent a commission then you would be required to pay a commission to your buyers agent.
There will be other that will say the (FSBO)seller will pay the commission, but the (FSBO) did not sign or make a contract with your buyer’s agent, therefore they are not obligated to honor the contract that you signed.
I hope this has been of some benefit to you, good luck.
“FIGHT ON”
You won’t actually “save” the commission – you will EARN the commission.
Your thinking is somewhat incorrect. If you buy a home for yourself, you are not acting as a real estate broker, but as a principal to the contract. You can’t be both. If you are not acting as a real estate broker to the contract, you cannot collect a comission. Sorry.
The last person that answered and said it is not possible to collect a commission if you are the principle is incorrect. They may want to check their source.
I am an active real estate agent. I have bought 2 homes that were my primary residence in the last 7 years. Each time I represented myself as the buyer’s real estate agent. Each time I deducted my commission from the price of the home because that is how I wanted to get paid. But I had the option to get paid the normal 3% as the buyer’s agent and have that money go through my broker and their commission split to be taken out. So in order to avoid all that, most brokers allow their agents to have at least 1 personal transaction in order to benefit from it. Maybe things are different in NY – I am a TX agent. I say get your license but don’t be a broker (more expense and liability) just be an agent. Find a broker that will just charge a minimal desk fee ($250) per month or a certain amount per transaction ($200) and they also will pay your E&O insurance. As long as you keep your license active, this will be a great asset to have in the future as you and your family or friends buy homes. It will save you money in buying and selling. Just make sure that everyone involved in the transaction knows you are a licensed agent and representing yourself.
Good luck.