I'm new to the US market but have a hypothetical question. Let's say I come across a promising lead for a property on sale. Being unable for whatever reason at the time to contact the seller directly myself, I pass the lead onto my local realtor to follow up and do the negotiations for me, and gets a Property Agreement under contract to me. I subsequently assign the property to a cash buyer and the property title eventually goes across to the buyer and I collect my assignment fee. How does the realtor get paid? Commission from the seller? Do I pay the realtor fees? Cheers, Russ Swan
Why are you passing the lead to your Realtor to follow up and do negotiations on your behalf? This is stuff that you should be doing yourself. The more people you involve the more less profit there is to be made.
To answer your question most Realtors aren't going to take on that kind of work for you unless you've signed an agreement for them to represent you. At the end of the day whatever they get paid will ultimately come out of any potential profits you would make doing it yourself.
That should be in a contract or agreed on before the transaction starts. If you are a frequent buyer you should be able to develop a relationship with a realtor and do it for free or a flat fee as long as you give them profitable business... If its not in writing you dont owe them anything.
Thank you gentlemen. That's answered it nicely. Chris - Am just checking options. I live in Australia and because of the time zone difference I will need to become a night-owl to take calls and talk to sellers.
Not so bad if I choose a property that my agent presents to me, but I had wondered if I'd found a promising lead, what alternate arrangements could I make to contact and negotiate with the seller. Obviously the realtor will have to be paid - it's only fair. But if I'm bringing in a lot of leads to him/her there may be room to negotiate an agreement I should think.
Thank you again for your input.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing