Agent/Investor How to Avoid a Conflict of Interest

[Andrew B.]

Hey BP.  I heard on a BiggerPockets podcast (can't remember which one) that as a Real Estate Agent who is also a Real Estate Investor there is the potential for conflicts of interest with sellers when looking at investment property.

Essentially, the speaker gave a scenario of an agent/investor making an offer on a property which the seller accepts.  The seller later claims the sale was unethical because the agent led them to believe the below market price of the sale was what the home was actually worth.

As an investor you're obviously looking to negotiate a price on investment properties which is below market value after analyzing what rehab is needed in the case of a value-add play.  My question is how can you ensure all potential conflicts of interest are avoided while doing this?

I am in the process of becoming a licensed agent and looking for my first deal.

[Ryan Howell]

@Andrew B. - In NC we are required to disclose if we are licensed.  I always disclose and just have an honest conversation, that here is what I could offer (cash deal, no hassle, leave tenant in place, etc) and here is what I could list it for (as is, or fixed up, etc).  There may be an occasion you lose a deal for that reason, but in my experience the seller has a reasonable knowledge of what it is worth anyway and transparency tends to build trust.  This way, if I do buy it, I can sleep at night knowing I didn't mislead anyone or take advantage of them.