Posting for birddogs
Well the mls in my area is getting too hot. If I go on Craigslist there are a few I'll buy your house cash ads up. If i posted finders fee offered. I'll give you $××× I was thinking $500, if you can get me in contact with a seller that is not currently on the mls. Gee paid when the deal closes. Then say I'm a cash buyer, can close quickly etc. Is this legal?
I'm wondering this myself. I know it is illegal to "broker" without a license but what if the person is just telling me about a neighbor looking to sell as-is/cash? I would be more than willing to pay someone a "finder's fee" for that information if I end up buying the house!
yeah. I know it is a common practice. Just don't know if we can actually advertise it.
Jeffery Waicak Question is if you're a broker/agent or not? If you are licensed as a broker/agent there are many rules and ethical behaviors you have to abide by. They're pretty standard across most states. The WAY you pay people that bring you deals while you're a licensed broker/agent does have restrictions and rules (legally speaking) especially when compensation is involved. This is to protect the sellers and buyers that you would be representing as their agent. The transaction has to be at arms-length so there is no conflict of interest.
If you're not a licensed broker/agent and you are not representing a buyer or seller - assuming you are just an investor looking for deals - there are legal ways to pay a bird dog.
Best way is to do an assignment of contract if possible. Have an assignment agreement signed between you and the bird dog that spells out the details. Refer to a local real estate attorney to check the legality of marketing and compensating bird dogs.
*Some investors pay a consultation fee or a referral fee to bird dogs which are shown as a line item on the settlement statement. Be wary and careful of laws within your state when or if you do this. Line items on the settlement statement and what they're named as, how and to who they're paid and for what services have to be for legitimate services rendered.
If you market to bird dogs for paying them for their leg work and bringing you deals then have a definite and legal way to pay them. Ask an attorney if how you plan on paying the bird dog is 100% legal.
As for marketing to bird dogs- having those bird dogs bring you deals- then paying them for that service is not illegal but there are restrictions and laws that you have to abide by when you are marketing to and compensating them. You may not know who you're gonna meet on Craigslist and you don't have a strong gauge on their ethical standards, It's always better to work with a licensed agent and a real estate attorney that you can rely on. Good luck in your real estate ventures!
Careful finding bird dogs on Craigslist because most of them are just want to waste your time. If someone is very interested, don't hire him/her immediately. Do some screen interview and background check if he/she is truly qualified for the job.