Do you take a commission when your broker AND buyer??

[Taylor Philley]

I am a Broker in Texas and when I purchase residential or small multifamily (1-4) homes for myself, I write in the contract that I receive the 3% listed buyer's agent commission (in one form or another). I'm about to make an offer on my first larger multifamily (20 unit apartment complex) and the non-disclosure I was asked to sign in order to view the financials has a bullet point that says I'm "acting as an Investor only and therefore am not entitled to commission." Is this normal?? Do you usually try and take or ask for the broker commission when you are both the buyer/investor and the broker? Second question: I'm used to making an offer on the TREC or TAR forms when offering for SFR or small multifamily, what do I use to make an offer for an apartment complex? Does the LOI act as the offer or is that just the general intent letter with offer price and terms and then the sellers realtor will provide the contract? Thanks for your help!

[Oren K.]

Taylor,

An LOI is just about 'intent' and many explicitly state that the LOI itself is not binding. The terms laid out in an LOI have to be incorporated into a Purchase Agreement which gets executed; many deals fall apart during the negotiation of the purchase agreement. When it does get signed, that becomes the binding document for the transaction.

Regarding commissions; I have seen this in various online confidentiality agreements (CA). Not being an agent, it does not affect me but I would say when you put in your LOI, declare that you are an agent representing yourself and your commission expectations. I believe that the listing agent has a fiduciary obligation to bring any legitimate offer to the seller. When the purchase agreement gets drafted, just make sure everything is spelled out.

The other one that I have seen is where the CA states that as the buyer, if I bring an agent, I am responsible for their commission. I generally don't worry about it since as I stated above, the LOI can redefine things and at the end of the day, the purchase agreement is the only thing that counts.

Oren