How to deal with a realtor/skip tracer relationship?
Real Estate Agent · Atlanta, GA · Member since 2021 · 1 post · 0 votes
I am new in the real estate world. I became a licensed realtor a month ago. I work out of Georgia. Atlanta area specifically. When being mentored the first thing that is on the to-do list of building your database is to let your friends and family know you are getting into the game. I'm learning that there are people in my circle that are either in wholesaling or who Skip Trace. A friend of mine wants to skip trace and find listings for me. And for every closed deal wants to make 15%. Someone enlighten me please. Is this something that is legal? Also let's say we do find a good deal and 15% is totally worth it. Do I have to write in the contract that I'm giving 15% of my commission to this skip tracer for finding the listing?
All advice is welcome. TY!
Hi Hoshi!
First of all, congrats on getting your license = ) As far as the contract portion goes, that can be State by State in terms of what's legally required. I am assuming that it's likely you wouldn't need to as this person isn't affiliated with your managing brokerage and it would be more of a personal payment from you directly- but again, need to verify with managing broker on that one.
As to the worth it portion, I would personally say "no". No. one what good is it going to do you to have these skip tracing leads really? Yes, you may get listings from them but this is where it gets muddy. You've got to have the listing under contract, the exclusive right to sell. This means you won't be using an assignable contract that the person doing the skip tracing established. These won't be 'off market' deals if GA is like IN, and you need to get all listing on the MLS in 24-48 hours after contract- so it will be under your name as the listing agent.
So what's the problem? Well this comes from the general spamming involved with getting these from leads to contracts. On average I would say these homeowners are getting spammed by wholesalers at least 5 times a day, and it's why wholesaling is becoming illegal in various areas. Doesn't seem to suit your reputation to be known as the 'spamming agent' to me.
That's issue number one. No. 2 paying this person may not be ideal in other ways as you could possibly get into issues with them having an assignable contract and not informing you, the seller not realizing they can't have an exclusive right to list contract with you and then you end up with the skip tracer coming back to you for more $ as the 'procuring cause' of the sale.
I personally see this as not going so well, but maybe that's just me. It seems like a better plan of action would be to get involved in local REIAs where you, yourself are making investor connections. My advice would be to skip the skip tracer and try your own on the legal side of things with C-SPAM laws in mind marketing to generate leads.
Hope that helps some! If any of this seems much more Indy specific than GA, I would for sure reach out to managing broker. One more thing here, I guess No.3 being there's only so much spread on a deal. If you're paying fees to your brokerage, fees to your local board, and paying into your cap- that 15% is going to really take another chunk out of things for you it seems.