Please feel free to contact me and I would be happy to help you further.
John G Moustis
President / Owner
SPARTAN CONSTRUCTION & DESIGN, INC.
Phone & Fax: 630-963-6020
Quality building, remodeling & consulting services in the Chicagoland area since 1991
Let's be honest, Conflict of Interest is a perception crime. If the buyer and/or lender ever feels there was a possible conflict of interest then the Realtor/Contractor is guilty as charged. I would be appalled if the Realtor/Contractor called the Illinois State Real Estate Commission and asked if they could do this if they would be given the thumbs up. I would be equally surprised if the buyer were to ever sue them if their E&O insurance would cover them.
Home Inspectors who are contractors should never ever work on a home they've inspected for a buyer and Realtor/Contractors should never work on a home they've sold to a client. The only upside is they earn money, the downside is they get sued, they lose a client and/or possibly their license gets suspended. In my mind the downside far outweighs the upside. I never work for clients thought I will share resources with them including referring them to honest, qualified contractors whom I know will treat them fairly and do a good job. I'm always suspicious of Realtors who attempt to get involved multiple aspects of a clients transaction. It makes me wonder just how good they are at any of the jobs their doing given that they have so much available time.
I don't know if it's your duty to report this, but it's certainly worth having a conversation with the Realtor/Contractor and letting them know that they may be blowing the deal for the buyer as the lender may very well refuse to permit this. Thanks for a great question.
Here's an excerpt from the HUD handbook (the short answer):
4155.1 2.B.2.a Definition: Identity-of-Interest Transaction
An identity of interest transaction is a sale between parties with family or
On a tangent here, John's comment about owner-generals was a good one... What you don't hear outside of the lending circle (and very well-informed circle within that circle) is that the foreclosure rate on "self-help" transactions (owner-general) is astronomically higher which is why lenders don't allow it. The upside is only on the buyer's side and the lender takes all the risk.
Nice job here guys on the question/answer, I wish the other questions on here were answered as professionally as you all have done so far in this thread.