| Author | Postings |
|
Greg-Rehablist
Real Estate Investor
|
Refferral Fees
Saturday, July 08 2006 03:23 PM
How can non-agents collect for connecting a buyer to the seller. What type of contract is needed to be binding. I suppose the fee will be collected at the closing. What fee will be fair or how much to charge, a % or a flat fee or tack on price above the asking price?
Greg S.
Buy / Sell Wholesale Properties at http://Rehablist.com
REPLY
|
|
Randy Hughes
Master Advisor-39 years of experience
|
Re:Refferral Fees
Sunday, July 09 2006 12:22 PM
Greg
You have to be careful in doing this or you could be accused of selling real estate without a license. As long as you are selling your own property you will not have a problem. However, if you are selling someone else's property to could open yourself up for litigation. For example, if you enter into a contract to buy a piece of property (or, you could enter an option contract) and then sell YOUR interest in the contract for a "spread," this is OK. We call this technique "contract assignment." Or, you could buy a property and then re-sell the property immediately by closing on the purchase in the morning and the sale in the afternoon. You CANNOT make a fee, spread (or whatever you want to call it) for representing sellers to buyers without being licensed.
Hope this helps
Randy Hughes
REPLY
|
|
Randy Hughes
Master Advisor-39 years of experience
|
Re:Re:Refferral Fees
Sunday, July 09 2006 12:29 PM
Greg,
Regarding how much to charge, my answer is, AS MUCH AS YOU CAN. The advantage of not being licensed is you are not restricted to convential commission structures (i.e. 6-7% of the selling price). So, buy low and sell (or assign your contracts) high. This is the great thing about the house business. If you can learn how to negotiate (buy low) and re-market the property on a cash sale, lease-option, contract assignment or retail deal, you can make LARGE amounts of money in short periods of time. I just did a deal in June where i bought below market and looked for a contract buyer. Finding none quickly, i closed on the house and then found a buyer. I would have made 10,000 clear if i could have found someone to buy my contract, but i ended up re-selling all within a 3 week period. I netted 8,500.00 after legal and closing costs. Oh well, life is tough!
Randy Hughes
REPLY
|
|
Greg-Rehablist
Real Estate Investor
|
Re:Re:Re:Referral Fees
Sunday, July 09 2006 02:47 PM
Randy,
Is a finder fee the same. All I want to do is to connect a buyer to a seller for a fee. I have buyers for your properties too.
Greg S.
Buy / Sell Wholesale Properties at http://Rehablist.com
REPLY
|
|
Randy Hughes
Master Advisor-39 years of experience
|
Re:Re:Re:Re:Referral Fees
Sunday, July 09 2006 04:15 PM
Greg,
Sorry, but no can do. You would be acting as a real estate agent and you cannot do that if you are not licensed. You need to do it within the context of which i have already addressed. This should not be hard to do, just a little more paperwork and hassle, but for big pay checks it is worth it, right?
Randy Hughes
REPLY
|
|
kocol
telemarketer
|
Re:Re:Refferral Fees
Thursday, October 12 2006 07:19 AM
Randy
Where can I get these contracts to buy with the option of selling the contract to someone else??
Henry Kocol
REPLY
|
|
Randy Hughes
Master Advisor-39 years of experience
|
Re:Re:Re:Refferral Fees
Thursday, October 12 2006 10:27 AM
Henry,
Any contract to purchase will work. Just make sure that the contract says that you are the buyer "or assigns." For example, Buyer is Randy Hughes, or his assigns. This allows you to assign the contract to anyone else prior to closing. I believe that in Illinois that if a contract does not specifically say that you CANNOT assign it ...then you can. But, by putting this language in your contract there will be no question as to its assignability.
Randy Hughes
REPLY
|
|
Randy Hughes
Master Advisor-39 years of experience
|
Re:Re:Re:Re:Refferral Fees
Friday, October 13 2006 11:07 AM
Randy
As a bird dog do I need to have the house under contract before showing it to other investors? Or can I just worry about that when I find an investor who wants the property and then explain to the seller why I need to have the option to sell the contract and just do so right in front of them?
Henry
Henry,
I would get the property under contract FIRST. Other wise you may lose the deal to another investor before you are able to secure a contract/agreement with the seller. Also, i would not broadcast to the seller that you might assign your contract with him. It should not matter to him one way or the other as long as he gets the price and terms you agreed to.
Randy Hughes
REPLY
|
|
kocol
telemarketer
|
Re:Re:Re:Re:Re:Refferral Fees
Saturday, October 14 2006 03:16 AM
If I don't let him know I may be selling the contract how do I explain other investors coming over to look at the house? Besides isn't honesty the best policey?
Henry Kocol
REPLY
|
|
Randy Hughes
Master Advisor-39 years of experience
|
Re:Re:Re:Re:Re:Re:Refferral Fees
Saturday, October 14 2006 02:02 PM
Henry,
Yes, honesty is the best policy. However, when you are negotiating a deal with a seller you will confuse him/her if you discuss the topic of assignment early on in the negotiations. Wait untill you have a signed contract (with the right to assign) and then let the seller know that you MAY be bringing someone by to look at the house before closing. This way you would be covered for showing the house to prospective buyers OR renters OR rent-to-own prospects. Keep the process as simple as possible.
Randy Hughes
REPLY
|
|
MLavaty
Real Estate Investor
|
Re:Re:Re:Re:Re:Re:Re:Refferral Fees
Monday, March 19 2007 05:27 PM
This discussion has gotten me to thinking. My partners and I are considering offering a Finder's Fee to those who are able to provide us with information that leads to us purchasing an abandoned/vacant property. Is this technically illegal, and if so, how do you use Bird Dogs to bring deals in?
Michael T. Lavaty
Dream Team Solutions
lavaty@gmail.com
www.DreamTMSolutions.com
REPLY
|
|
Randy Hughes
Master Advisor-39 years of experience
|
Re:Re:Re:Re:Re:Re:Re:Re:Refferral Fees
Monday, March 19 2007 07:19 PM
Michael,
The issue relates to whether you are a licensed real estate agent or broker. If you are not licensed, you have nothing to worry about. You can pay finders fees to whomever you want. However, if you are licensed, you cannot pay fees to anyone other than a real estate broker (who then may share it with his agent).
Randy Hughes
REPLY
|
|
Marty Couch
Investor
|
Re:Re:Re:Re:Re:Re:Re:Re:Re:Refferral Fees
Wednesday, March 21 2007 09:11 AM
Hey Michael,
The only thing to watch for in paying a referal fee is that you are not violating RESPA law. In other words, all fees paid in connection with the closing are SUPPOSED to be disclosed on the settlement statement.
Another way to do this is if the bird dog get's an equitable interest in the property (for example, puts the property under contract). You could then do a double close.
To avoid the double close if this seems like it could create a problem, you could use a land trust to pass the property and isnure everyone is paid. If you would like more information on how to do this, I wrote a report for the Hughes Brother on Profits without Flips. I'm sure of you contact Jim or Randy they can give you the details on optaining a copy.
The report is not written as a stand alone item. It is very much meant to supplement the Hughes Brothers "Land Trusts Made Simple" class. If you haven't taken the class, I would highly recomend getting the home study course. The information is incredibly valuable and there are alot of things Land Trusts can be used for that most people don't even think about.
Hope this information helps.
Marty Couch
http://www.PPLChicago.com
REPLY
|
