Can I Purchase my own Listing?
September 6, 2018
Author: Kreg Wagner (UAR)
This is a fairly frequent legal hotline question. Say you have a great listing and a great relationship with the Seller. The more time that you spend prepping the property for sale, the more you realize that you would like to make an offer on the property. Is this permissible?
No. Under the Utah Administrative Code, it states, “An individual licensee may not…act or attempt to act as a limited agent in any transaction in which: (a) the licensee is a principal in the transaction; or (b) any entity in which the licensee is an officer, director, partner, member, employee, or stockholder is a principal in the transaction[.]”
The rationale behind this rule is that your conflict of interest is too great. It is impossible for a licensee to remain neutral since the licensee is a principal in the transaction and still adequately represent someone else on the other side of the transaction.
So, what options do you have if you want to purchase your own listing? You and the Seller could mutually terminate the listing agreement and the Seller could sell the property as a “For Sale by Owner.” This is permissible and is not a violation of the Code of Ethics nor licensing laws. Additionally, you could mutually terminate the listing agreement and the Seller could be represented by a different real estate agent.
If you have any questions about limited agency, feel free to call the UAR’s Legal Hotline at 801-676-5211 on Monday, Wednesday, or Friday from 8:30 a.m. to 4:00 p.m.