Can a broker make an offer on her own listing?

QUESTION: One of my brokers has a listing that she personally wants to make an offer on.  She has also received an inquiry from an individual with no representation and it’s likely he will want to make an offer too. Please let me know how we should handle this situation so we don’t get in trouble.

ANSWER: First of all, Real Estate Commission Rule 58A.0104(p) applies to this situation.  According to the Rule, your agent cannot enter into a contract to purchase her seller’s property unless she does the following: (i) discloses in writing to the seller that she has a conflict of interest and that the seller may want to seek independent counsel of an attorney or another licensed broker, and (ii) the listing agreement is terminated or transferred to another broker affiliated with your firm.  She should also tell the seller about the inquiry that’s been made about the property if she hasn’t done so already.

Regardless whether the listing is terminated or transferred to another agent, we would advise against your agent working with the individual who has made inquiry about the property, given your agent’s interest in making an offer on the property herself.  If the listing is transferred to another agent with your firm, the individual who made inquiry should be advised to communicate directly with the agent to whom the listing has been transferred, and the new agent handling the listing should of course not disclose the terms of any offer that the individual may make to the former listing agent since she would be considered a competing party. See Commission Rule 58A.0115.