If they ask and you wish to explain you simply say you chose a more qualified applicant.

If you explain the advantages of working with you (no commission, maybe less closing costs if you take some of those, quick and simple close, etc.) but also explain that you need a good price to make it work, and in addition don't put pressure on them to sell it to you because you're family, that should preserve the relationship, whether they sell you the property or not.

Has anybody had experience trying to explain to a broker that you are only interested in hanging your license under them in order to buy and sell houses for yourself?

Do you understand/Can you explain how this works?

I explained my plan was that if the numbers worked out and I was able to get the home, then I would agree to giving them the first opportunity to bid the home, and I would definitely pay for the time it took to write up a rehab estimate to submit to the lender.

I've read several books when I decided to this and I've seen it mentioned a couple of times but thank you for your explanation coz I didn't understood it at first but you explained it well. 

Can some one explain to me what an LLC is?

The problems, as it was explained to me when I researched the flat-fee guys when I sold my own home in MD by owner, is that 1) sometimes they don't even list in the correct MLS for your area, so make sure they do before paying anything, and 2) when agents see "contact owner for showing," or doesn't have the correct style lock-box, that can limit agents showing your home as they'd rather not deal directly with the owner or feel they'll be directing both sides of the sale without a listing agent involved.    

I'm a new investor... so new that I have never purchased a property and still rent myself, so apologies if I require a bit of over explaining.

Also, many standard contracts have a clause that seller will pay up to x% of purchase price for any lender required repairs, so your agent may just be explaining that if lender required repairs total under 1%, for example, of purchase  price, the seller will fix it per the contract, but if it goes over that amount, they can back out if they don't want to pay unless some compromise is reached.  3.