TRIVIA: Can a Real Estate Attorney be paid commission.......

By
Real Estate Agent with Robert J Russell Real Estate, LLC.

TRIVIA QUESTION:

A Real Estate Attorney is representing a buyer in the purchase of a home. The Real Estate Attorney does not have his a Real Estate license but is licensed to practice Real Estate Law. Is this Attorney entitled to commissions in the Real Estate transaction ?

If you are an Attorney, Realtor, Loan Officer, Know-It-All or anyone who wants to answer - give us your opinion.

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Topic:
ActiveRain Community
Location:
Texas
Groups:
Almost Anything Goes
Diary of a Realtor
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Posts to Localism
Realtors®
Tags:
attorney
law
real estate

Comments 15 New Comment

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Rainmaker
124,023
Robert J. Russell
IRES, ICREA, CLU, LUTCF, Broker
Robert J Russell Real Estate, LLC.
Patricia you didn't answer the question - you reworded what I said - what is your answer
March 06, 2011 03:46 PM
Rainmaker
124,023
Robert J. Russell
IRES, ICREA, CLU, LUTCF, Broker
Robert J Russell Real Estate, LLC.

Here is the official answer in Texas:

* Q:     An attorney told me that her client had attended an open
house for one of my listings and wanted to make an offer on the property.
The attorney told me she was preparing an offer for her client and insisted
that I pay her the same fees I had offered to cooperating brokers in the
MLS. The attorney does not have a broker's license. Can I pay the attorney
the coop fee if this offer is accepted by my client? (updated Nov. 25, 2009)
          o

            A:    The Texas Real Estate License Act (Texas Occupations Code,
Section 1101.652(b)(11)) provides that a broker can lose his license for
paying a fee to anyone not licensed as a real estate broker or salesperson
in Texas or any other state for compensation for services as a real estate
agent. While the attorney is exempt from regulation under the Texas Real
Estate License Act, you are not; you would face disciplinary action for
violating the act. Certainly, the attorney is permitted to represent clients
in real estate transactions by virtue of her license to practice law. It
does not follow that you can pay that attorney the coop fee for her
representation of her client. The attorney can and should seek compensation
for her services from her client.
++++++++++++++++++++++++++++++++
    Q:    After twice showing a prospective buyer one of my listings,
he informed me that he was a licensed attorney, would prepare his own
contract offer, and demanded to be paid the cooperating broker's fee in the
transaction. He does not have a broker's license. Can I pay him the coop
fee? Do I have to pay him? (updated Jan. 1, 2002)
          o

           A:    While the Real Estate License Act prohibits sharing a
broker's fee with a person not licensed as a broker or salesperson "for
services as a real estate agent," an essential element in the definition of
a real estate agent is that the person performs an activity described in
Section 2(2) of the Real Estate License Act "for another person."

            Since a principal in a transaction does not act for another
person, he would not fit the definition of a real estate agent. Therefore, a
broker is not prohibited by the Real Estate License Act from sharing a fee
with a principal, regardless of the principal's profession.

            Although a broker may share part of the broker's fee with a
principal, there is no requirement that the broker do so. Concessions of
part of the broker's fee to a principal is a business decision of the
broker. However, brokers should consider sharing the fee with a
buyer/principal only with full disclosure to all parties, including the
seller, the listing broker, and any lender involved in the transaction. Any
fee-sharing arrangement should be included in the contract.

            It should be noted that the Real Estate License Act prohibits a
broker from sharing the broker's fee with an attorney who is not a principal
but is representing a party to the transaction.

March 07, 2011 10:15 PM
Rainer
126,166
Brian Doubleday
Ladera Ranch, Foothill Ranch, Lake Forest, Mission Viejo
Brian Doubleday - IML RealEstate - Orange County, CA Broker

Great debate, you've raised a great question and got some interesting points

March 10, 2011 06:27 PM
Anonymous #14
Anonymous
Joe Lumbley, Texas Realtor(r)

No, a broker can lose his license for such an action.  Here's a link from the Texas Association of Realtors explaining the options:

http://www.trec.state.tx.us/pdf/articles/other/tar_001.pdf

May 20, 2011 02:09 PM
Anonymous #15
Anonymous
Joe Lumbley

Left out the phrase, "in Texas" in #14 above.  This advice is based upon Texas Law.

May 20, 2011 02:11 PM
Anonymous
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Rainmaker
124,023

Robert J. Russell

IRES, ICREA, CLU, LUTCF, Broker
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