In the state of New Jersey realtors have the ability to take a commission on a property they are purchasing provided that they disclose in the contract of sale that they are a realtor and the realtor of record for the purchaser (i.e., themselves). Nonetheless, even if all parties understand this to be the case a realtor may be precluded from doing so if the seller’s lienholder specifically precludes this from taking place. While it may not seem equitable that another party (e.g., the lienholder) should have the right to interfere and prevent such a commission from being given, the fact is all parties understand going into the transaction that the short-sale is subject to the seller’s lienholder’s approval. As such, if the lienholder restricts such a commission being given and the parties want to go forward with the transaction, the buyer/realtor must agree to relinquish his/her commission for the transaction. This does not necessarily mean that the buyer/realtor’s broker or another agent in their office cannot take the said commission. However, under no circumstances can that commission be given back to the buyer/realtor, either directly or indirectly (e.g., through another transaction or bonus). The reason being is in many instances the seller’s lienholder will require all parties to sign an affidavit stating that neither party is receiving any monies – aside from what has been authorized – by this transaction. If the buyer/realtor receives the said commission back it has violated the affidavit, and may be subject to criminal and civil penalties. Bottom line: Don’t do it! In light of this, a buyer/realtor must think very carefully when entering into a short-sale transaction, as to whether or not he/she can afford to move forward without his/her anticipated commission.
*The information in this blog posting is for general information purposes only. Nothing in this blog or associated pages, documents, comments, answers, emails, or other communications should be taken as legal advice for any individual case or situation. The information in this blog is not intended to create, and receipt or viewing of this information does not constitute, an attorney-client relationship.