New licensee starting in short sales

I have a real estate salesperson license but am not practicing or affiliated with any broker. I am looking to get started in short sales and have a partner who will negotiate the shorts with the lenders. Basically, I will bring the short sales leads and they will do the negotiating. We will flip the house and split the profit. This arrangement is ok but I know that I have to disclose that I have a real estate license to everyone involved. I was just looking to get more information on this.

How exactly do I disclose that I have a license? Does the seller have to sign something or is there a form to fill out?

If I eventually do affiliate myself with a broker and am working with a Realtor to get the leads, can I collect a commission and split the profit from the flip?

Any licensed agents doing this sort of thing? I'm just looking to get some direction on what I can and can't do.

Like I said I'm not affiliated with a broker so I don't have someone I can ask. Any help is appreciated!

Edited: 06/26/2010 at 09:25AM

Lawrence Moss

Real Estate Investor · brighton, Michigan

56 posts
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Icon_minipost Aug 19 '09, 04:12 AM

Where are you located Mr. Wolfe?

Edited: 06/26/2010 at 09:25AM

Christopher W.

Residential Real Estate Agent · Orange County, California

290 posts
2780 Influence
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Icon_minipost Aug 19 '09, 04:14 AM

Originally posted by Lawrence Moss

Where are you located Mr. Wolfe?

Oh, I guess that is important, isn't it? I am in California. I just updated my profile so you can see that.

Edited: 06/26/2010 at 09:25AM by Christopher W.

Justin S.

Rehabber · Chandler, Arizona

1162 posts
12272 Influence
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Icon_minipost Aug 19 '09, 04:36 AM

What is your exit strategy? To buy and hold or do a quick flip? If its a quick flip, would you be representing the A-B Seller or the B-C seller?

Edited: 06/26/2010 at 09:25AM

Justin S., Wheelhouse Properties
E-Mail: wheelhouseproperties@gmail.com
Telephone: 4806780446
Website: http://www.wheelhouseproperties.com
Realtor, Re-modeler, Cash Buyer

Ralph S.

Real Estate Investor

566 posts
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Icon_minipost Aug 19 '09, 05:49 AM

Until you and a licensed broker create the broker-agent relationship, you can't act as an agent and don't have to disclose.

Updated: 01:25PM, 08/19/2009

Well, it seems CA has some unique laws. I defer to the CA Broker who responded to your other, identical post.

Edited: 06/26/2010 at 09:25AM

Christopher W.

Residential Real Estate Agent · Orange County, California

290 posts
2780 Influence
9 Awards

Icon_minipost Aug 19 '09, 05:50 AM

Originally posted by Justin S.

What is your exit strategy? To buy and hold or do a quick flip? If its a quick flip, would you be representing the A-B Seller or the B-C seller?

Quick flip. As the investors, my partner and I would be B in both transactions. Since most of our leads would be from Realtors, I wouldn't be representing any party.

But then what if we get leads that are not from Realtors? Can I represent the sellers as a listing agent and then collect both a commission and the profit from the flip?

Edited: 06/26/2010 at 09:25AM

Moe M.

Real Estate Investor · Murrieta, California

47 posts
448 Influence
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Icon_minipost Aug 20 '09, 04:06 AM

Since you haven't hung your license with a broker as Ralph suggested you probably can't represent as a listing agent. But what you can do if you're not going to use an agent is to put a Loss Mitigation fee in there for yourself, and put in seller's concession on the HUD-1. Since banks are accustomed to paying 5% commission, realistically they don't care if that 5% is going to an agent or non-agent, just make sure when you put in your offer that it's included on the HUD-1 properly -- because if you don't, then it will be a pain for escrow to pay it out the way you planned.

Moe

Edited: 06/26/2010 at 09:25AM by Moe M.

Justin S.

Rehabber · Chandler, Arizona

1162 posts
12272 Influence
14 Awards

Icon_minipost Aug 20 '09, 04:21 AM

Quick flip. As the investors, my partner and I would be B in both transactions. Since most of our leads would be from Realtors, I wouldn't be representing any party.

But then what if we get leads that are not from Realtors? Can I represent the sellers as a listing agent and then collect both a commission and the profit from the flip?

I'm not an agent or a broker or a lawyer but I'll give my opinion anyways.

If I were you, I would act either as the agent or the investor, not both. You will find you are a conflict of interest representing a distressed seller and knowing that you want your offer to be accepted which in most cases is the lowest offer. If I were an agent, I wouldn't touch that. But, if you act as an investor and disclose you are an agent and buying this property to make a profit then so be it. I'm be willing to bet CA has some pretty strict laws preventing "predatory" agents. Do a forum search, and you see a few discussion on it. Other option is tear up our license, if you can, and just be an investor. :mrgreen:

Edited: 06/26/2010 at 09:25AM

Justin S., Wheelhouse Properties
E-Mail: wheelhouseproperties@gmail.com
Telephone: 4806780446
Website: http://www.wheelhouseproperties.com
Realtor, Re-modeler, Cash Buyer

Christopher W.

Residential Real Estate Agent · Orange County, California

290 posts
2780 Influence
9 Awards

Icon_minipost Aug 20 '09, 05:00 AM

I figured it would be a conflict of interest if I were to be representing the seller and collecting the profits from an eventual resale. So I'll keep my investor hat on!

I also read on another post that most lending companies won't pay any commission if the agent is also the investor. I don't have any experience with that, but it seems to be more profitable to be an investor rather than an agent in short sales.

Edited: 06/26/2010 at 09:25AM