Wholesaler · Milwaukee, WI · Member since 2013 · 60 posts · 9 votes
Hi you guys. I'm a wholesaler out in the Milwaukee area. I was recently talking to a real estate agent about an REO property he had listed. I asked him if I found an investor that would be interested in buying it would he be able to pay me a small fee. He said no, because I'm not a real estate agent.
But I've blogs that said that I could get a fee from an investor friendly real estate agent.
What's real and what's fake you guys. Or am I missing something? I get leads and I have good contacts. Can wholesalers get paid for my referral services in a way that I don't know about?
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
12y
Find properties that are not listed on the MLS for the world to see, get them under contract, then assign the contract to an investor for a markup (but a list price that makes sense with the amount of repairs needed).
Investor · Boyd, TX · Member since 2014 · 688 posts · 467 votes
12y
I think in most states it is illegal. I know in Texas it is. Look up your states rules for activities requiring a real estate license. Many you have to have a full Brokers license not just a Sales license.
Rental Property Investor · Milwaukee, WI · Member since 2013 · 6k+ posts · 4k+ votes
12y
Find properties that are not listed on the MLS for the world to see, get them under contract, then assign the contract to an investor for a markup (but a list price that makes sense with the amount of repairs needed).
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
12y
Check with your state department of real estate. I know in California it is legal and the state acknowledges it however it does restrict the finder to basically introducing the parties and they can not participate in negotiations, etc.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
12y
In the context of your post, licensed agents generally can't compensate non-licensed "people" (humans or non-human entities). This is generally true throughout all 49 states... and California.
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
12y
@chris martin
What you don't know you don't know and I do know California. As an investor there since 1955, and a real estate broker since 1965 and paying finders fees that passed the occasional department of real estate audits during those years, you will need to amend your opinions regarding California and a few other states. Humans can be paid a finders fee in California.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
12y
@Brian P. Thanks for the clarification. Licensed brokers in NC can't pay finders fees for unlicensed people (e.g. bird dogs) in NC. So at least one state fits. Interesting that in CA brokers can pay bird dogs and other unlicensed people.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
12y
Florida specific, and aome other areas----Perhaps an over looked dinstinction: I, as an agent (or a non agent) can pay a referral fee for a Lead, but it can Not be dependent upon whether a sales transaction occurs. I can Not pay a fee dependent upon a property closing, nor can a non licensed agent receive such a fee from anyone. However, as discussed adnauseum before, it is not specifically illegal for a non licensed person to Pay such a fee, but it is illegal to Receive such a fee.
Broker, Investor, Property Restorer · Fox Point, WI · Member since 2012 · 288 posts · 120 votes
12y
As far as I remember, the answer at least here in WI is a solid NO! They even have very tight rules as to what our assistants can and can't do, such as if I were to hire a non-licensed secretary or whatever. I'm sure if you sent an email to the WRA (WI Realtors Association) they'd give you the run down!
452.19 Fee?splitting. No licensed broker may pay a fee or a commission or any part thereof for performing any act specified in this chapter or as compensation for a referral or as a finder’s fee to any person who is not licensed...
The statute in this great state even cites relevant case history.
Wholesaler · Milwaukee, WI · Member since 2013 · 60 posts · 9 votes
12y
Thank you guys all for your feedback especially @Robert Taylor. I feel solid in knowing that from another real estate agent. I guess I'll just let my dream of being paid for referring go as I'm not looking to be a real estate agent. *sigh* lol
Thanks you guys. & Please no fighting :) Everyone is just trying to help each other out.
Real Estate Coach · Venice Beach, CA · Member since 2012 · 6k+ posts · 3k+ votes
12y
It's a fine line and gray area about this, but with everything I've ever done, it is officially illegal to pay a referral fee to an unlicensed person. Some people make attempts at getting around this buy calling them "marketing fees" or some other obvious attempt at skating the law, but even if there is some loophole or potential way around it, anyone who is willing to pay that fee to an unlicensed person isn't the smartest person in my book because it's very risky, and no upside to the risk of it. Getting a license is easy, I'd get it so you never have to worry about it.
It's a fine line and gray area about this, but with everything I've ever done, it is officially illegal to pay a referral fee to an unlicensed person. Some people make attempts at getting around this buy calling them "marketing fees" or some other obvious attempt at skating the law, but even if there is some loophole or potential way around it, anyone who is willing to pay that fee to an unlicensed person isn't the smartest person in my book because it's very risky, and no upside to the risk of it. Getting a license is easy, I'd get it so you never have to worry about it.
Please read the above post (dated Aug. 22) by @Brian P. (damn @!) and the reference link I updated in response to his post. The link is http://www.dre.ca.gov/files/pdf/reb/rebspring_12.pdf and talks about licensed brokers legally paying finders and legally compensating unlicensed people... in CA, in other states, and how to pay people (indirectly) in other countries.
Wholesaler · Salt Lake City, UT · Member since 2009 · 1k+ posts · 401 votes
12y
What we are talking about here is finders fees regarding real estate and how the state reacts to them. I know when I was a kid some rich people I knew talked about doing something and getting a finders fee. It could have been a multitude of areas, and I know the amount quoted was generally 10%. I know of many people that made money that way and it was perfectly legal. I'm sure the people that felt they were losing chances at money started crying, real estate brokers, stock brokers, business brokers, lawyers and they had their lobbyist go to work at various capitols passing laws to steer the money back to them.
I remember one guy in the S.F.Bay area that found a site for a new Pepsi plant when Pepsi was unable to find one and made a very large finders fee, his mistake he got involved in the deal to far instead of stopping at the introduction phase and the Pepsi lawyers used that to not pay his finders fee, but only waiting until it was almost time to pay him and the deal was basically done. Nice people, Pepsi. I'm sure if he was asked even The Donald earned a few finders fees in his life time.
While I realize this does not apply directly to the topic at hand (Wisconsin), I and other BP members in other states should find it very informative and educational. Upshot to readers: Know your state laws and real estate commission rules and how your state handles similar cases.
Clarksville, IN · Member since 2014 · 8 posts · 0 votes
12y
I need to know if in INDIANA its legal to receive a finders fee....I got caught up in a webinar full of hot buttons on the ease of making these fees (Phil Grove from Texas is Guru behind this but someone else presented the webinar. Russ [email protected]
Los Angeles, CA · Member since 2014 · 1 post · 0 votes
11y
hey, if you find Investors who are willing to work with you or brokers whos willing to work with you they be happy not to have to find borrowers and or people who need funding or investors who want to invest, go I just had a lot of people tell me yes, on the first try. I told them I don't have a license, and that I am not interested in going pass introducing potiential clients and they emailed me asking me to find them clients.
Broker / Investor · Tewksbury, MA · Member since 2008 · 1k+ posts · 351 votes
6y
I have a follow up question about this. Suppose you have a wholesaler with a purchase contract ready to sell to another buyer. That buyer and wholesaler were brought together via a 4th party. If the buyer is an investor and or company, and no fiduciary relationship has been expressed or implied, could they pay the 4th party a finders fee without any legal implications?
I understand that you can obtain a fee for introducing buyer or investor to an owner of a property. Your contract is with the owner , not the agent. That you state in your finder's fee contract with the owner that your sole function is Only introducing the buyer or investor to him/her. No more , no less. You are not negotiating the procedure of the transaction. That is the function of the agent, broker, and property owner. If the owner has an exclusive right to sell contract with the, but you have found RWA buyer/investor, the owner by law has to pay them, too. That's why realtors have these contracts. Of course they tell you it's illegal- that's work ! However, if you Only introduce them to the owner and Not get involved with any of the process.you get your finder's fee.
Real Brokers and agents are just mediaries. There are companies that invest in properties - they may pay you a finder's fee for just obtaining the contact.
If they say no, look for someone else. You have an owner that wants or needs to sell his/ her investment.