Posted by Mark-Chi on December 20, 2002 at 12:20:56:
It shouldn’t be a double-closing situation. The money to be paid after your sale should be written up as a mortgage (or land contract, depending on your state). Upon the closing of your sale, the title company will use the funds to pay off all liens, including that mortgage, then give you the remainder.
Collecting fee for locating real estate – legal? - Posted by Rich
Posted by Rich on July 30, 2001 at 15:34:08:
Hello,
I’m wondering if it is okay to collect a set fee for locating real estate for potential buyers (land, houses, etc.,)?
Do I need a realtor’s license for this?
Seems to me that I wouldn’t since I would not be undercutting a realtor’s ability to collect commisions – I would actually be sending potential buyers to the realtors, and collecting a profit for finding a given property. A win/win situation for both.
What do you all think of this? Is it legal?
Thanks! -Rich
Affilliate Advertiser vs. Finder - Posted by J. Clifton
Posted by J. Clifton on July 30, 2001 at 23:23:24:
As has been stated, the law in most states (and the attitude of brokers in all states) opposes anyone without a real estate license practicing acting as a finder of property for another. Technically, merely acting as a matchmaker between two parties is not the same thing as brokering, if you are neither assisting in negotiating an agreement, nor acting on behalf of one party in the transaction. But good luck trying to get the NAR or your state to understand that. Thus even if you were performing the service without being noticed, any contractual agreements you made with the contacts you were matching would not be protected by the government.
One workable alternative is to operate as an “advertiser” for an investor (or network of investors), by distributing his literature to targeted populations, and getting paid on an accrual or per-inquiry basis. When the investor gets paid upon fulfillment (closing), you get paid. Structurally legal, normal advertising practice, protectable, and accomplishes the same thing. Instead of “matching” an investor to a contact and making an offer, the advertiser would advertise the investors’ requirements for buying, including a “request for offers,” so the SELLER could submit an offer to HIM, consistent with the investor’s specifications. So you’re not being paid for locating a seller, but for advertising an investor’s proposal. One of the only courses on finding, by Jim Straw, suggests something like this affilliate approach to address the legal issue with regards to real estate.
Collecting fee for locating real estate – legal? - Posted by JohnBoy
Posted by JohnBoy on July 30, 2001 at 16:01:46:
Has nothing to do with undercutting realtors from their fee. It has to do with what the law says. Collecting finders fees by finding and locating properties for another would require you to have a license. To get around the license you would need to find the property, you get under contract as being the buyer and then sell your contract by assigning it to your buyers. That way you would be acting as a principle, not an agent.
There are people that collect finders fees without being licensed, but if you get caught you could get into trouble. Also, if someone stiffs you on paying you your fee you couldn’t enforce it by going to court since you don’t have a license.
Re: - Posted by Bud and Norma
Posted by Bud and Norma on July 30, 2001 at 16:00:59:
I just researched New Mexico law on this, and my reading of it says you would need a license to charge a fee for locating real estate. Check your own state laws. In New Mexico you don’t need to be licensed if you are the owner or lessor of a property. Any other relationship does require a license. Just my reading of it…
Is that a bird dog? - Posted by Charity
Posted by Charity on July 30, 2001 at 16:40:24:
Is this not bird dogging? Is that illegal? I had not heard that, so I was just curious!
Re: Owner Contract Question - Posted by Jay
Posted by Jay on December 19, 2002 at 16:24:15:
Steve,
Thanks for the response…Of course the contract will be in writing, the purchase price is agreed upon, and I have no doubt that the house will sell, as it is in a very desirable area of Seattle. My main concern is how it will go down when I have a buyer. Will it be a “double-closing” situation? Where the buyer cashes me out and I cash my seller out?
Thanks,
Jay
Re: Is that a bird dog? - Posted by JohnBoy
Posted by JohnBoy on July 30, 2001 at 17:23:18:
As far as know it is. That would be doing something for another, which requires a license. A lot of people do it, but it’s not enforceable if someone stiffs paying you your fee if you don’t have a license.
Besides, if you’re going to go through the trouble of finding the properties for someone, why settle for small finder fees when you can just tie the thing up under contract yourself and make a whole lot more flipping your contract???