Good Evening Awesome Team,
I have a question. I am a new Wholesaler here in Charleston SC and have a deal I'm about to soon close on. The Agent already has her client on a realtor contract for $100k. How should I negotiate the Realtor's compensation and the contract that should be used? Should it be my contract (With the assignment clause) in addition to the Realtor's? Or just one contract?
@Kevin Duncan I suggest you talk to the closing attorney about this. From your post, it's not clear how the transaction is structured. Are you assigning the contract or closing on the house and re-selling it? What $100k contract does the Realtor's client have? With whom?
@John Semanchuk ... my plan is to reassign...
@Kevin Duncan I'm not a wholesaler but it seems to me that you should have a contract with the seller that you would reassign to the end buyer. The buyer or you would pay the agent any commission agreed upon. I don't know what you mean by "The Agent already has her client on a realtor contract for $100k" as that doesn't seem to fit into the above scenario. However, I really don't want to give any kind of legal advice so again, I suggest you talk to your lawyer about the best way to proceed.
@John Semanchuk Will do and thank you...
@Kevin Duncan If the seller's agent is sharp, he will likely either decline your offer altogether or accept it with a kickout clause - meaning that he continues to market the property until you or your assignee closes - and has the right to accept and close on a different offer up to the time you execute.
However, if wholesaling is illegal in your state as it is here, he will probably tell you to kick rocks as he is at risk of license suspension or revocation for participating in an illegal real estate activity.
If he has an "exclusive right to sell" listing contract, which he almost certainly does, the seller is obligated to pay the full commission regardless of who buys it or how it is sold.
Thanks @Danny Randazzo ... I will...
Thanks for the info and perspective from an Agent's point of view @Charlie MacPherson
@Kevin Duncan I am not an attorney, but I have assigned dozens of contracts and have purchased houses via assignment of contract (4 in the past year alone). I believe that having participated in assignments from both sides gives me a clearer view of the process and its pitfalls. Some of my assignment transactions have agents involved and some don't. BE VERY CAREFUL! It takes many years to build a reputation and only a few minutes to ruin it. You can ruin your reputation and/or break the law pretty easily if you don't know what you are doing. I am an open book and ready and willing to help you. Give me a call M-F during business hours. my phone number is in my signature line. Thank you @Danny Randazzo for the shout out.
Thanks so much @Russ Scheider ... I will be reaching out to you this week for sure.