Agent owned property transactions
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Agent-Owned Property Transactions. Legal Presentation - March 2007. Changes under New E&O Insurance Policy. New policy provides coverage for all sales of residential property provided the 4 transaction requirements are met.

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Agent-Owned Property Transactions

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Agent owned property transactions

Agent-Owned Property Transactions

Legal Presentation - March 2007


Changes under new e o insurance policy

Changes under New E&O Insurance Policy

  • New policy provides coverage for all sales of residential property provided the 4 transaction requirements are met.

  • New policy does not differentiate between the agent’s dwelling residence and the agent’s investment property.

  • No coverage for commercial property.

  • No coverage for lease property.


Transaction requirements for all listings of agent owned residential property per e o policy

Transaction Requirements for All Listings of Agent-Owned Residential property Per E&O Policy

  • Seller’s Disclosure Notice

  • Home Warranty

  • Inspection

  • Standard TAR Contract OR Contract drafted by attorney


Additional listing requirements

Additional Listing Requirements

  • Listing Agreement

  • Special Provisions must identify seller as RE salesperson affiliated with GK

  • Agreement for Sale of GK Agent’s Residential Property – confirms:

    • Seller will not show the property, hold open houses, market or advertise the property

    • Seller will refer all questions from buyers/agents to listing agent

    • Seller will not negotiate directly with buyers/agents


Qualification for listing side commission waiver

Qualification for Listing Side Commission Waiver

  • 1) Has worked at GK at least one year; and

  • 2) Made at least $45,000.00 in the twelve months preceding the transaction; and

  • 3) Use of benefit limited to once per twelve months.


Requirements for listing side commission waiver

Requirements for Listing Side Commission Waiver

  • Listing Side Commission Waiver and Indemnity Agreement – signed by GK seller/agent and GK management

  • Agent must pay at least 1% to the listing agent, plus $500 processing fee to GK. Total commission on the TAR Listing Agreement should be “4% plus $500.”


Listing side commission waiver and indemnity agreement

Listing Side Commission Waiver and Indemnity Agreement

  • GK waives listing side commission if seller/agent:

    • complies with transaction requirements

    • indemnifies GK for any non-covered losses

  • Seller/agent must pay

    • 1% to listing agent

    • 3% to coop agent

    • $ 500 to GK for administrative fee


Potential buyer conflicts

Potential Buyer Conflicts

  • If Buyer has Buyer’s Rep Agreement with Agent/seller:

    • Buyers Rep Agreement must be amended to exclude this property

    • Buyer must be referred to another GK agent who will enter Buyer Rep Agreement for this property only

  • If Buyer is not represented by Agent/seller:

    • Buyer should be referred to another GK agent and should sign Buyer’s Rep Agreement or Non-Representation Agreement


Purchases of property by agent

Purchases of Property by Agent

  • E&O insurance DOES NOT provide coverage to GK for purchases of property by agent.

  • GK will waive the 3% buying-side commission if:

    • Agent/buyer meets qualifications

    • Agent/buyer agrees to indemnify GK for any losses related to this transaction


Buying side commission waiver

Buying-Side Commission Waiver

  • Qualification:

    • Has worked at GK at least six months; and

    • Use of benefit limited to two times per twelve months.

  • Transaction Requirements:

    • Special Provisions must read “Buyer, (Agent name), is a licensed Texas real estate salesperson/broker affiliated with Greenwood King Properties.”

    • GK must be identified as Buyer’s broker


Buying side commission waiver and indemnity agreement

Buying Side Commission Waiver and Indemnity Agreement

  • GK waives buy-side 3% commission – agent/buyer can use this for their benefit

  • Agent/buyer indemnifies GK for losses arising from this transaction

  • Agent/buyer pays GK $500 processing fee


Gk commission waiver

GK Commission Waiver

  • Shows third parties that GK will not be claiming 3% commission on this transaction

  • Not required, but will be provided upon request by agent/buyer


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