Is Bird-Dogging Legal???

Tax, Legal Issues, Contracts, Self-Directed IRA 45.8K Posts 6.9K Discussions

Are you licensed as an agent in MA? It makes it easier (and legal) to pay a fee for finding a deal if one has a license. Hence the question.

Is it not legal to have someone pay you an assignment fee if they take over your contract?

Providing a finder's fee is perfectly legal. Being a buyer's representative in a RE deal doesn't require a license,but I haven't found that being licensed has ever hurt.

if you weren't able to work on someones behalf, there would be no power of attorneys aka attorney in fact to handle certain affairs.

Originally posted by "hcf":
Are you licensed as an agent in MA? It makes it easier (and legal) to pay a fee for finding a deal if one has a license. Hence the question.

Is it not legal to have someone pay you an assignment fee if they take over your contract?

Heather, the reason the above works is because you are not collecting a fee.

You have a legal right in the property. You are selling that right to someone else. You are not collecting a fee for brokering. You are being paid for something you own.

John Corey

Originally posted by "bmatthew":
Providing a finder's fee is perfectly legal. Being a buyer's representative in a RE deal doesn't require a license,but I haven't found that being licensed has ever hurt.

As you are licensed in one state maybe that is the rule in that state. It definitely is not in many other states.

You really need to know the state laws for where the property is located. In OR an agent is limited to $25 (buying lunch more or less).

Being a legal representative to another party where a RE transaction is taking place implies you are acting as an agent for the other party. A license, an attorney who is practicing law and a few other corner cases are covered.

As a general rule all states require a license before someone can act as an agent or representative in a RE deal. Maybe even if you do it for free. Maybe only if you get paid upon completion of the deal.

Learn the state laws. Just because people speed on the highway does not mean it is legal. Just because a guru or otherwise implied you can be a bird dog for a fee does not mean the judge will let you off with no fine or jail time.

John Corey

Originally posted by "REI":
Originally posted by "bmatthew":
Providing a finder's fee is perfectly legal. Being a buyer's representative in a RE deal doesn't require a license,but I haven't found that being licensed has ever hurt.

Just because a guru or otherwise implied you can be a bird dog for a fee does not mean the judge will let you off with no fine or jail time.

John Corey

i think thats being a little hasty. my understanding with the law whether its civil or penal, there has to be an injuried victim in a suit.

check with an attorney but i don't see how someone can be hurt by a bird dog alerts a buyer into buying a home, unless there is fraud involved.

you can't regulate common law which allows a man to earn a living as long as no is cheated in the deal.

now if someone is bird doggin with the intent to defraud, now you are looking for trouble.

like i said check with an attorney but good bird dogging to you and a prosperous year.

now if the bird dog is finding the deals, negotiating the deal, running numbers, won't let the seller and buyer talk, gets both parties to sign all the documents, create the deed, create the hud, file the deed, set up the title insurance, does the inspection, then you have a bad bird dog.
:superman:

maybe i want that bird dog, if i dont get cheated. :goofy:

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GetSmart,

Check the brokerage laws in the specific states you want to do business in.

The parties that are being hurt by the bird dogs are the folks who have a license. They are one of the main sources that turn bird dogs into the state authorities.

It has nothing to do with the intent to defraud. If that is how you think the law works you will definitely get a wake up call if you do not research further. Ignorance of the law is not a defense when you face the judge.

There was a story in another thread where the person had received legal advice and they were still later brought up on charges by the state. The lawyer was wrong with their advice. That was in OH.

John Corey

both of you are eluding around the core facts in my previous post.

so let me try to clear this up as simple as i can. if you are a bird dog, make sure that the person or company you are bird dogging for is not intending to defraud anyone, cheat them, or decieve them. you don't want to be tangled up dealing with scamsters.

now that is out the way, if you stay clear of fraud, deceit, as a bird dog, you will be ok. the only suit that will stick is one where someone is injuried. anybody can sue for anything nowadays.

a senator is suing GOD. so if the judicial system with let this happen they will allow you to be sued. but if no one is hurt as a result of your bird dogging, you will be just fine.

you guys are making bird dogging seem like its a white collar crime, and if it is why do you have a bird dogging forum?

i am getting confused as to the purpose of this forum community. is it to provide accurate information or trying ones best to prove another poster wrong.

it seems to me like instead of trying to prove me wrong, you would try to tell others how to proceed the right way to become successful as a bird dog from your experience.

again in my state North Carolina, you can bird dog for someone as long as no one is injured as a result. check with an attorney.

:beer:

Originally posted by "REI":
GetSmart,

Check the brokerage laws in the specific states you want to do business in.

The parties that are being hurt by the bird dogs are the folks who have a license. They are one of the main sources that turn bird dogs into the state authorities.

John Corey


again you are getting in the way of common law. a bird dog is in no way hurting someone with a license, that has to be one of the sickest excuses i have ever heard, as a desperate attempt to throw someone off.

tell me how a bird dog is hurting a licensee. they aren't listing a property, they aren't negotiating the property, in most cases they aren't even communicating with the seller.

heres the NC Real Estate license law definition.

A real estate broker within the meaning of this Chapter is any person, partnership, corporation, limited liability company, association, or other business entity who for a compensation or valuable consideration or promise thereof lists or offers to list, sells or offers to sell, buys or offers to buy, auctions or offers to auction (specifically not including a mere crier of sales), or negotiates the purchase or sale or exchange of real estate, or who leases or offers to lease, or who sells or offers to sell leases of whatever character, or rents or offers to rent any real estate or the improvement thereon, for others.

now do you need it interpreted as well?

A real estate broker within the meaning of this Chapter is any person, partnership, corporation, limited liability company, association, or other business entity who for a compensation or valuable consideration or promise thereof lists or offers to list, sells or offers to sell, buys or offers to buy, auctions or offers to auction (specifically not including a mere crier of sales), or negotiates the purchase or sale or exchange of real estate, or who leases or offers to lease, or who sells or offers to sell leases of whatever character, or rents or offers to rent any real estate or the improvement thereon, for others.

this time read and follow the bold print. this is something we learned how to decipher in grade school all the commas. and do you see the last part of that statement? it says for others. a bird dog isn't making such a promise to the seller, since they may or may not have spoken. if they have spoken then maybe the bird dog is offering to buy the property their self.

the bird dog isn't offering anything to the buyer but a lead most of the time and in rare cases a contract, which is perfectly legal to sell.

do you honestly think the AG will pursue an honest working citizen, helping folks out of foreclosure and not even charging the homeowners a fee or one red cent?

you have got to be kidding, and if you are that scared to be a bird dog, i am sure investing creatively you are completely against. Because bird doggin is the first form of creative investing.

one thing you have to realize a broker is paid by the seller. in that case the bird dog would be representing the seller.

the bird dog is simply telling an investor about a lead. people get paid all the time for leads. what do you call those on line companies that sell leads for $45? How many of them are being attacked by the real estate commission? i can bet you its not worth their time.

common law is still in full force as long as it doesn't violate the current statues.

i can't believe this, honestly.

:beer: :goofy: :beer:

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Originally posted by "**********":

CA Civil Code sections 1695 ( a) through 1695.17 (b) 7 type written pages of legal jargon alone define foreclosure and purchase law.

1695 (a) The legislature finds and declares that homeowners whose residences are in foreclosure have been subjected to fraud, deception, and un fair dealing by home equity purchasers.............................

CC sec. 2945-2945.11 about 12 type written pages talks about "foreclosure consultants" in depth. In laymens terms, these statutes view a "bird dog" as involved with equity purchase.

They are required to hold a valid a CA licensed Real Estate License, and be bonded by a admitted surety insurer, for at least twice the fair market value of the real property that is subject of the contract.

Also see CC sec. 2985 as to how law relates to "creative contracts" and "creative transactions and finance"....

OUCH!


i hear ya, and seriously doubt a bird dog is considered an agent. not likely.

how about making it easy for me to look at all of those pages and provide a link you are telling me about so i can see for myself.

until then i am not buying it. prove your case, i have already broken down the definition for my area. I brought it to you, now bring me yours with your interpretation.

GetSmart,

Ring the state office that regulates RE agents. Ask them about enforcement actions concerning unlicensed agents. Let them define what an agent is and why anyone receiving compensation if and only if a deal closes is an agent or middleman.

Ultimately it has nothing to do with how you think the law works. It is all about the folks in your state who enforce the license laws for RE agents.

Like people speeding on the highway or feeling that income taxes are illegal. Many choose to ignore the laws and how they are applied in the belief that common sense rules. It is a free country so they are free to hold this view and pay the price if it works out things are not as they mistakenly believed.

John Corey

Originally posted by "GetSmart":

the bird dog is simply telling an investor about a lead. people get paid all the time for leads. what do you call those on line companies that sell leads for $45? How many of them are being attacked by the real estate commission? i can bet you its not worth their time.

No believing something changes nothing about the situation.

1. You can sell information. You can sell lists. The sale is not contingent on the deal closing between the buyer and seller. The bird dog in this case is an information broker or a list broker. They will be paid $X dollars for a list and the amount will be tiny.

2. Most RE newbies that want to be bird dogs want to get paid for deals that close. They want a chunk of money that is way past a few dollars for a name, address, phone number. Hundreds of dollars is what people normally expect and they are fine with waiting until the deal closes. It is because the payment is contingent based on the deal closing that the fee crosses the line.

John Corey

well the reason why i know instead of think how you stated it is in north carolina, we are in a contract state. if you sign an agreement you have to pay.

there is nothing the real estate commission here can do but try to sue for a few hundred dollars which they won't do because its not worth the hassle because when it comes down to it, the judge has the final say so.

there was a case like what you are talking about where an individual made a referral to the agent and collected a fee from the seller of the property. the bird dog won the case because in north carolina if you sign an agreement you have to honor that agreement.

the judge interpreted the law as the contract was written. so to go back to your bird dog theory, its bogus.

no matter how you flip it, attempt to tangle or wiggle your way out of it, i want to see proof. i brought the definition for a broker in north carolina, bring me all this proof you keep rambling about. show me a statute, act like we are in missouri, its the "show me state" in fact show me the definition of the state you invest in law or defintion pertaining to brokerage.

it all sounds good what you are saying in theory, but in court theory isn't going to get it. imagine you are the DA, now let me have every law, smack me with every fact you can bring, so you can attempt to prove what youre saying.

now is the time to stop all lip service, like friday said "its about the facts ma'am". so me the facts.

until then i demand this case be dismissed on grounds of no evidence.

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Originally posted by "GetSmart":

there was a case like what you are talking about where an individual made a referral to the agent and collected a fee from the seller of the property. the bird dog won the case because in north carolina if you sign an agreement you have to honor that agreement.

the judge interpreted the law as the contract was written. so to go back to your bird dog theory, its bogus.

I am making no claims about contracts. I am talking about a regulated activities. James cites the NC statues above.

The contract might be valid. Or it might be considered unenforceable if the contract covers an illegal activity.

Refer to the NC regs above. That defines what is legal. If something is legal then you can contract to do it. If it is not legal you can still contract to do it but you can not depend on the courts to enforce the contact.

Frankly I do not care if you operate legally or illegally. What I do care about is the other readers who are not sure about the laws and think you are correct. If they check their state law and realize that many forms of being a birddog is illegal yet still want to do so, all the power to them. If they did not realize that it was illegal because they believed what you said rather than checked that is bad for the community here.

John Corey

since i am wrong, interpret those regs, since you know em.

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so are you just giving your opinion or are you stating facts? just wondering because no where in those codes you mentioned, have an affect on a bird dog.

those statues are clearly pointing out the limitation of a licensed person. no where does it mention a non license person collecting a fee. so now i am confused. i need your help to bring me on your page.

i went to law school but i am not a law student, however i did take up a course or two. so i need your help to clear this whole mess up.

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i am going to make this quick, because from your tone you are really trying to help. You might be 100% correct from a california stand point. i haven't really checked into the law since i have no interest there.

I will again try to explain to you what these codes mean. you are right a person should know the codes. Here goes.

Originally posted by "**********":

§ 93A‑6. Disciplinary action by Commission.

the Commission may investigate the actions of any person or entity licensed under this Chapter, or any other person or entity who shall assume to act in such capacity.


when the code says "actions of any person or entity licensed under this chapter."

I understanding the confusion there, but what you have to realize is the two terms person and entity are one in the same. an agent working under a broker isn't an entity, that agent is considered a person.

The entity is the broker or shall i say broker in charge. so when the code says any person or entity licensed they mean both are licensed, because if you take away entity you still have licensed so it would state any person licensed. so they are one in the same. got it. check with an attorney and notice they will say the same thing.

so this code is only pertaining to anyone licensed.

its also funny how you highlighted just person the first time instead of person and entity licensed, but you highlighted both the second time. whats the reason behind that?

Originally posted by "**********":

If the Commission finds probable cause that a licensee has violated any of the provisions of this Chapter, the Commission may hold a hearing on the allegations of misconduct.

again this chapter is above all more proof of what the limitations are of the commission. they can only hear licensee since they took an oath under the commission. a bird dog in most cases never taken this oath, which they are not to be bound to this chapter.

Originally posted by "**********":

In simple terms, any business or action related to or leading to a real estate transaction on any level. The party doing the action or conducting the business will be governed the same as a licensed Realtor, and be held accountable to the same laws, terms and conditions that would govern a broker or realtor.

is this your interpretation or a part of the code? if it is your opinion that i want to see where it says any business or person without the word licensed immediately follow such a list.

Originally posted by "**********":

I don't want to argue with you, and did not think I was doing that. My intent is to be helpful. I want to make it clear that one must know their local laws, and be prepared to make good decisions based upon the laws and regs. It is clear by your complaint to Admin about me, and buy your birddog business, that we won't be on the same page. Leave it alone and move forward please, and I say that from a moderator position directly to you, without the intention of further conflict. I hope I was of some help to the original poster on this subject.

are you suggesting i don't know the local law? anyway if you are it doesn't matter.

to clear things up i never made a complaint about you. i was contacted by administration and i simply explained what i thought was going on. i thought you or john put them on me.

i want you to know, i don't take my problems i am having to someone else. whether legally or personally, i not that type of person, i try to work out my differences directly.

first of all i don't know you and i don't take yours or anyone elses opinion personally on this type of venue.

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Originally posted by "**********":

The above quoted is North Carolina Code, not CA. I looked it up just for you and you are welcome for the time I put into it.

There are several other statutes, that clearly define an individual providing services related to the sale of real property.

what are the other chapters you mentioned?

Originally posted by "**********":

so this code is only pertaining to anyone licensed.

Absolutly NOT the case! Again:
""or any other person or entity who shall assume to act in such capacity""

now you have to go back to the definition to define what such capacity is.

Originally posted by "**********":

An oath as a realtor or broker is not needed for "any other person" to be held accountable under the statutes, its Law and applies to ANYONE!
accountable to what statutes? if not pertaining to real estate license laws then what? because the code you keep referring to comes from the real estate license law.

Originally posted by "**********":

Just like the Contractors License Law. One does not have to be licensed in order to be held accountable for Law designed for Licensed contractors! The laws apply to anyone acting in that capacity, licensed or not. It's the Un licensed contractor who really gets dinged by the infractions!!! The same applies to the above.
what would cause a non licensed contractor but a law would have to be broken, and someone injuried. You have brought up a good point. thanks. now in the example you brought, the real estate investor is the contractor. in order to get more done he subs out a certain amount of labor to the sub contractor/bird dog.

now the contract in north carolina can handle any job without being licensed up to $30,000. Any amount above that number would require a license. so the sub isn't accountable for what the contractor/investor does.

Originally posted by "**********":

BOTTOM LINE:

Just talk to an experienced Attorney before anyone get's involved in the business! Once your comfortable with the Attorney answers, go for it!

also to add in north carolina you can buy and sale three houses a year before you can even be considered as acting as an agent. to add during a conversation with the commission, they informed me that as long as someone contracts to buy the home, they can legally buy and sale that contract without needing a license.

so it might be better to wholesale than bird dog, but in north carolina you can bird dog three times a year and be in the clear. check with your attorney.