Assuming there was full disclosure upfront, would the following scenario be viewed as a conflict on interest?
VP of Acquisitions (husband) married to a broker (wife) who specializes in similar asset types that VP's firm is looking to purchase. Wife locates deal off market, shows it to her husband, asks for buyer to pay a commission. Obviously, this commission would be something the husband would "share" considering he is married to the broker. Would company view this as a conflict, and if so, is there a work around? Provided that everything was disclosed upfront, although I am wondering if the company may philosophically have an issue here.
Feel like if you're honest with all parties up front, this shouldn't be an issue.
That said, personally, I would avoid anything that could even begin to be perceived as improper. Don't shit where you eat isn't just a catchy phrase.
Agree with Count_Chocula that I wouldn't even want to deal with this. A couple of other things to consider that would be 'perceived' conflict of interest:
Since the deal is off-market, and the broker represents the buyer in this situation, you'd have to be really careful to disclose this to the seller, and also make sure that the seller has their own representative. If you were representing both in this case, I think it would definitely be shady at best, and probably COI at worst. If it was widely marketed, you could more easily prove that there was no price-colluding going on here for the buyer's benefit.
I would try to ensure that the commission is a flat rate, as otherwise it could come off poorly if a higher price meant higher $ for the broker since the husband works at the buying firm and could theoretically influence a higher price being paid for no other reason than to inflate the wife's commission.
Interested to hear what comes of this if you don't mind.
Good points. Would it make any difference if the off-market deal had the SELLER agreeing to pay the broker's commissions. Such that the buyer wasn't being required to pay any fees, but the wife of the acquisition VP was still involved as the broker of record being paid by seller?
In most of these off-market scenarios I am seeing, there really isn't much "brokering" going on, per se. Often times, it's simply a broker finding a deal and requiring either buyer or seller to pay a commission/finder's fee/etc if a sale ultimately happens. Most brokers are simply forwarding emails, passing paper between seller and buyer, they aren't helping negotiate the deal or providing a service, they are just middle men.
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