Is it a good idea for my wife to get RE license and act as my buy & sell agent?

Question

Rehab, sub2, & rental business startup in Utah: Is it a good idea for my wife to get RE license and act as my buy & sell agent? Is it legal? What issues do I need to be aware of that addresses profits shared by married partners, and how to handle separation, divorce, loss of ambission, and other unforeseen events? Thank you for your time!

Holly Baldwin · Answer

@Josiah Halverson

I think one of Utah's Division of Real Estate's concerns with this would be DISCLOSURE.  Your wife would have to disclose her relationship (i.e. being married to her client) and any ownership interests in each of the transactions.  If she doesn't do that, she would be at risk for disciplinary action from the Division.

I just passed my UT real estate sales licensing exam yesterday so all this is fresh on my mind!

Jerry W. · Answer

I agree whole heartedly with @Holly Baldwin .  You will have to disclose that fact on every offer to buy or sell.  That being said you can still have her collect commissions on every thing you buy or sale.  There is also the plus of having MLS access and the knowledge gained by taking the courses and working in the business.

As to your question about how you will handle separation, divorce, lack of ambition,and other unforseen events.  That is easy, you handle them as they come up.  If fear of those is holding you back now then get divorced and get it over with now.  Courts decide those things on what is fair.  They are decided by the facts in each case and you do not know the facts right now as it has not happened.

Account Closed · Answer

Not to sound like a broken record here but disclosure is your number #1 key in any deal. As long as all parties are aware of your relationship in the transaction you should be fine. You never want to assume that the other party knew what your intentions were when making a transaction. Having it in writing seems to be paramount in covering yourself if any issue arises.

Brian L. · Answer

I haven't spent a lot of time researching this topic yet but I plan on "hiring" my wife as the manager or making her a partner of my LLC. She plans to get her RE license and manage the business with all of the benefits of being a realtor (MLS access, etc). My primary business is wholesaling so I don't necessarily need a realtor but I figure if you own a RE related business it can't be a bad idea to have a realtor on staff.

There is probably more to it but this is the way I hope to work it out.

Holly Baldwin · Answer

@Josiah Halverson

Just like @Karen Margrave said, no matter what your relationship, no one thinks anything of it, its just that you need to disclose it.  The Division of Real Estate is all about protecting the public and disclosing those relationships and ownership interests in your transactions shows the division that she is not trying to take advantage of the public.  And it also covers your wife from disciplinary action with the Division.

Now, if she acts as the buyer's agent and the seller's agent at the same time, there are disclosures that by law she will have to give to both buyer and seller.....paperwork that both seller and buyer have to sign saying they are aware of that and understand the implications of such an agreement.  If they do agree, your wife will be a "dual agent" ....or in Utah we call it a "limited agent".  Again, if she doesn't disclose the implications of that situation using the appropriate forms, she will be at risk of disciplinary action from the Utah Division of Real Estate.

She will learn that if she goes through real estate school....but hopefully that just gives you some heads up as to what is involved.

Karen Margrave · Answer

We have a similar situation, however; we are partners, along with our son in an LLC. My husband and myself have been contrctors/brokers for many years, and have always developed properties under an LLC, we share in the profits equally and don't have a situation where we work "for" someone, but with each other.

As far as disclosure, whether or not your her husband, parent or whatever, if you are related it's always best to disclose that the agent is related to the buyer or seller. Nobody thinks anything of it. However; I'd be careful about her handling both sides of the deal without having anyone else involved.

Josiah Halverson · Answer

Thanks @Holly Baldwin ! Congrats on the new accomplishment! With the benefit of her having MLS access and the benefit of her training, experience, and future contacts, it seems smart to me to have her as my agent. I will definately disclose us being married in each deal. Thanks for the advice. So would the disadvantage be a missed opportunity because the other party doesn't like that we're married? I could see a conflict of interest arise if she were to act as the buyer and seller agent at the same time. Is that what you and @Jerry W. are getting at?

Jerry, I am definately NOT considering divorce (nor death, nor disability, nor getting locked up, nor exile, etc.). I'm just thinking of the countless times I have heard that one should plan for those things just in case. I would imagine it all could be lined up in a business partnership contract up front or something.

Is it a good idea for my wife to get RE license and act as my buy & sell agent?

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