BiggerPockets

I've a sense for what people expect as far as referral fees go. I'm just wondering what other people's thoughts are.

Lease Option - I pay 20% of down payment up to $1,000 for a tenant buyer

If I have a lead I send on that doesn't fit my plan... I like to get at least $1,000 if they can make something out of it.

If someone brings me a retail buyer... I'll pay $1000 min to $5,000 depending on my profit.

A rental lead, I'll usually pay up to $500 for a tenant.

Just curious

I was way off.

I'm talking about referral fees, not so much a percentage for brokering a deal.

Would sending a buyer to someone and asking for a referral fee, be considered 'asking for their services'? I have some agent friends and they've never been real clear where that line goes.

Ok, sounds like we had the same thoughts in mind just from different perspectives.

As far as the asking for referral fees and agents, I had one agent who tried to train me to do it and another who told me I'd get sued....lol. Yeah, that was clear as mud.

HEY, what's the etiquette for correcting an adults spelling or language? lol

I was a teacher (with poor spelling)... I had a habit of letting people know they felt well, not good... :)

clear as mud is right... as a REI one thing you really have to learn is the answer to almost every REI question.... " it depends" .

On home buyers and sellers we seek 25% of listing or selling side commisssion

Is there any particular paperwork or contract that I should use when collecting a referral fee for a tenant/buyer that I referred? How much do you think is adequate for the fee? 25% of the option premium or a flat $1000?
Thanks,
Mike

Hi, this is interesting, finding a way to legitimize, justify and bring an aspect of fairness to an activity that is usually promoted in an unlawful manner. I'm not going to hammer on the legality of it here, but I feel that the problems that arise form such activities are a product of the unstructured manner inwhich they are conducted. It seems that when someone suggests that they will simply hand a birddog some cash outside of closing, that presents several problems and is illegal in every state.It's for the birddog to control, find an equitable compensation as well as to secure payment for services. It seems that if those who need such services or who want to provide them could avoid all the problems if they would simply formalize their relationships. For example, an investment company (LLC) that buys in its own name can simply admit other partners to perform company activities, admisntrative, marketing or other jobs. These members do not have to share in the same manner as other memebers. They don't even have to make a contribution to any capital account or execute any obligation, nor do all memebrs have voting rights. It's pretty simple to have a different class of members who do actual work and who are compensated from capital (or profits). A member that finds a buyer or a seller for his company is not in violation of law. His compensation is earned from the duties performed in the company. It's not that hard to put this together and avoid the problems mentioned. The same thing can work with any option arrangement and sell or buy an option. To answer the original post, would these questions even be posed if a uniform or commonly used Operating Agreement were adopted in a new or existing LLC? I don't think so. If there were a somewhat common "fee" that could be agreed to between the parties, they would both be "protected" and in such a manner that was enforceable. There was one question where a birddog promoter said something like, "so you don't have to go to court to get your fee" not a quote, but similar. Fact is you can't enforce an illegal activity in court! And, I could tell the young man had to be inexperienced simply from his picture, I've been doing this longer than he was old.
Any thoughts on bringing birddogs inside if they are house broken? If they are instructed how to conduct biusiness for you or on your behalf, why wouldn't you want their services? I don't have a problem with someone making money, but can't there be a standard so that birddogs can operate lawfully and equitably? There are other ways as well to formalize these arrangements, any thoughts? Bill