Is it a conflict of interest for a real estate agent to flip houses for profit? thanks, Danny

Asked by Sunset Silhouette MYSTERY House, 96051 Sat Jan 5, 2008

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8
Alan May, Agent, Evanston, IL
Thu Feb 14, 2008
Sunset...

So the issue you have is not an agent "flipping" houses... the problem you have is with an agent purchasing his/her own listing (whether directly or through a straw man). You may be surprised to know that I agree with you... this is clearly against the Realtor's code of ethics, and should be thoroughly investigated.

It is against the Realtor's codes of ethics to purchase your own listing, or to you an intermediary to do so. I don't know of any agent who could respond to their governing body with a "refusal to respond", that would be taken seriously.

Inquiries by the Department of Real Estate are taken very seriously as they control our ability to continue doing business in our chosen field.
2 votes
Sunset Silho…, Home Seller, 96051
Sun Jan 6, 2008
Dear Elvis, I think i have a "Gold brick" to sell you :-). Any real estate Agent/ speculator/investor can find a little old lady that trusts him/her to price her house and "put it on the market", while the little old lady moves into a nursing home. The investor tells the little old lady that he is "showing the house". Meanwhile the investor recruits a relative, friend, another "agent" or simply tells the trusting old lady that he will buy the house and "waive his commission" cause he is such a "nice guy". He than offers the little old lady TWICE what she paid for the house 80 years ago. The old lady is thrilled (as is the investor). The investor walks off with the house, convinced he is an angel of the Lord for helping the old lady out! The DRE is notified by the old ladies son and This "toothless tiger" organization tells the son that the agent/speculator will not respond to a request for explanation and there is nothing more they have authority to do. An agent/investor is a fox guarding the hens. The fox may be a "animal of his word" ; but do you trust the fox not to eat a few "snacks?" Now that you know how to do it Elvis, Please Don't! DannY
1 vote
Alan May, Agent, Evanston, IL
Sun Jan 6, 2008
Let me turn the question around, Danny. What conflict do you perceive?

How would an agent buying houses, fixing them up, and turning around and selling them represent a "conflict of interest"?
0 votes
Darren Kittl…, , Madison, WI
Sun Jan 6, 2008
Patrick is right. An agent wanting to purchase a property for a flip must disclose that they are a licensee and that they intend to purchase the property for a potential financial gain. Along with that each state has rules as to how the property may be obtained. For example, in Wisconsin and agent can't be in competition for a purchase in which the seller is a client of that agent's brokerage if there are other offers on the table.
0 votes
Patrick J. T…, , Charleston S.C.
Sun Jan 6, 2008
Hi Danny,

No, Realtors are peolpe too! (smile) The diffrence between a Realtor and someone that is not is a Realtor because of their knowledge has more responsibilities to the general public. All Realtors that have any ownership no matter how little must disclose this to the public and should be documented on any contract.

Patrick J. Tivnan
0 votes
Christopher…, Agent, Hemet, CA
Sun Jan 6, 2008
Not if disclosed to all parties. When I have done this (in the past), I would not purchase directly from homeoners and will seek out listings from other brokerages. I feel that there could be a conflict if purchased directly from a consumer or from broker inventory with very few exceptions.
0 votes
Pam Winterba…, Agent, Danville, VA
Sat Jan 5, 2008
Danny.....When a Realtor purchases property they must disclose they are a licensed Realtor in the purchase agreement and some of us take it a step further and state they are purchasing for their own personal gain.
0 votes
Jonathan Bow…, Agent, Stoughton, MA
Sat Jan 5, 2008
No, as long as the real estate broker is disclosing that he/she is the buyer and subsequent owner of the property. Tale care, Jon
Web Reference:  http://www.bowenboston.com
0 votes
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