Know that a jury will favor the client.
Court cases have time and again made the point that the licensed real estate agent or broker possesses a higher level of knowledge about real estate and valuation than the general public. After all, if we didn't believe that, it would be harder to sell our services.Whenever you purchase from a client or potential client, you are presumed to have an advantage. If you just have to do it, know that you're taking on a high level of risk for that potential good deal.
Disclose early that you have an interest.
The best practice would be to make this offer to purchase before you ever take the listing, preferably before you even begin to discuss the seller's information.If you do take the listing, have some written disclosure in it that you have an interest and you might even reserve the right to purchase the property as part of the listing.
At least it's now on record that the seller knew of your interest and won't be telling the court that you didn't try hard enough to sell the listing, keeping it a secret that you wanted to buy it later.
Have the seller get an excellent attorney and appraiser.
Happy sellers are less likely to see you in court later. Bend over backward to help the seller to hire an excellent attorney and appraiser, and you might even help with the extra costs. The attorney may put a stake in the heart of your deal, but better that than no attorney involvement.Advise them to get an appraiser approved by major lenders and stay at arms length in the appraisal process. One real estate risk instructor has purchased for his own account and said that if the appraisal was in the range he liked, he paid full price without hesitation.
