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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

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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