Help! Getting compensated for finding tax deeds for buyers.

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Help! Getting compensated for finding tax deeds for buyers.

Tasha Pams
Flipper/Rehabber · Birmingham, AL · Member since 2018 · 12 posts · 4 votes

Hello everyone. I have found some really nice vacant tax deed properties in Birmingham and need some recommendations on how to get, I guess, a finders fee. I don't have the money to purchase them so how do I make sure that if I show them the properties they don't go around me and purchase them? 

Thanks in advance!!

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Denise Evans
JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
8y

@Tasha Pams, You cannot charge a finder's fee for finding properties unless you have an active Alabama real estate license.  You can probably fly under the radar, but some people do get turned in and prosecuted. Other people find themselves doing a lot of work for someone, only to get stiffed on the finder's fee. When the person in your position threatens to sue because they have a written contract for the finder's fee, the other person says, "You can't sue me. You don't have a real estate license. The contract is not enforceable because it is illegal, and you will be thrown out of court." That person would be absolutely correct.

You can, of course, put properties under contract and then flip the contract, but that's all.  If you get a price quote from the State of Alabama, that is considered a unilateral contract to sell you a piece of real estate at a particular price. You can basically flip that contract, but the State requires that their tax certificate be issued to whoever asked for the price quote.  So, you will have to pay to get the property in your name, and then flip it to your ultimate buyer.

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  • Greg ParkerBusiness Member
    Realtor, Contractor, Property Manager · Montgomery AL and Kowaliga, AL · Member since 2017 · 669 posts · 536 votes
    8y

    Have potential buyers sign a buyers contract.

    [email protected]
    MGM Property Pros LLC
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    1Reply
  • Brian Green
    Springville, AL · Member since 2018 · 4 posts · 2 votes
    8y

    i have been looking at tax deeds myself and i am new to this and just did not no how it works 

    0Reply
  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    8y

    @Tasha Pams, You cannot charge a finder's fee for finding properties unless you have an active Alabama real estate license.  You can probably fly under the radar, but some people do get turned in and prosecuted. Other people find themselves doing a lot of work for someone, only to get stiffed on the finder's fee. When the person in your position threatens to sue because they have a written contract for the finder's fee, the other person says, "You can't sue me. You don't have a real estate license. The contract is not enforceable because it is illegal, and you will be thrown out of court." That person would be absolutely correct.

    You can, of course, put properties under contract and then flip the contract, but that's all.  If you get a price quote from the State of Alabama, that is considered a unilateral contract to sell you a piece of real estate at a particular price. You can basically flip that contract, but the State requires that their tax certificate be issued to whoever asked for the price quote.  So, you will have to pay to get the property in your name, and then flip it to your ultimate buyer.

    3Reply
  • Tasha Pams
    OP
    Flipper/Rehabber · Birmingham, AL · Member since 2018 · 12 posts · 4 votes
    8y

    Thanks guys!

    0Reply
  • Robert Kennedy
    Indn Spgs Vlg, AL · Member since 2017 · 11 posts · 5 votes
    8y
    Originally posted by @Tasha Pams:

    Hello everyone. I have found some really nice vacant tax deed properties in Birmingham and need some recommendations on how to get, I guess, a finders fee. I don't have the money to purchase them so how do I make sure that if I show them the properties they don't go around me and purchase them? 

    Thanks in advance!!

    There is an attorney in Birmingham that gets the quote from the state then tries to find a buyer. He then negotiates a price for the deed/lien, signs a contract with them and takes a down payment that will cover the price of the lien/deed from the state. Once deed/lien is in hand they close on the deal and he reassigns the deed/lien to the buyer. None of your money is used.  

    1Reply
  • Jason Carter
    Rental Property Investor · Culver City, CA · Member since 2012 · 403 posts · 246 votes
    8y

    @Tasha Pams I'm actively buying in Birmingham so please hit me up with any properties you're looking to sell. 

    0Reply
  • Johnathan Williams
    Specialist · Birmingham, AL · Member since 2017 · 88 posts · 34 votes
    8y

    @Denise Evans, what @Robert Kennedy described in this thread sounds like "wholesaling" or assigning a price quote received from the state for a tax certificate/deed. Do you know of folks doing what Robert has described?

    Thanks!

    Johnathan

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  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    8y

    @Johnathan Williams, technically wholesaling is flipping contracts.  You can't flip a price quote from the state because the entity that requests the quote must be the entity that pays the money and that receives the tax deed or certificate. It sounds like he is getting a price quote, then only buying the property if he has a firm buyer with earnest money.  He still has to front the money to pay for the state property, and afterwards flip it to his buyer. There is sometimes a delay of 4-6 weeks between sending your money to the state and getting the tax deed or certificate afterwards.

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  • Johnathan Williams
    Specialist · Birmingham, AL · Member since 2017 · 88 posts · 34 votes
    8y

    Great info, Denise!

    0Reply
  • Robert Kennedy
    Indn Spgs Vlg, AL · Member since 2017 · 11 posts · 5 votes
    8y

    @Johnathan Williams

    Jonathon if you have a Facebook account search for "ElitEstate Realty Group." When you find the page use the Videos link. You can also search using GOOGLE to find the video. Make sure you include the parentheses in the search. 

    I will say I requested a quote from the state on a property in the middle of May 2018. I have not received a reply from the state. I am assuming they are still busy from the County Tax Auctions. 

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  • Doug Phillips
    Realtor · Cincinnati, OH · Member since 2018 · 140 posts · 53 votes
    8y

    @Denise Evans is absolutely spot on about sending in payment and receiving the Deed to the property and how long it can take; I think that should be a factor in your decision making as well.

    0Reply
  • Denise Evans
    JD, CCIM , Real Estate Broker · Tuscaloosa, AL · Member since 2014 · 1k+ posts · 1k+ votes
    8y

    @Robert Kennedy, sometimes the delay is caused by there being people ahead of you in line, who previously requested a price quote.  Each person given a price quote is provided 20 days within which to accept the quote and send in their payment. If that person makes a best price offer (BPO), that process might take another several days.  If the BPO is turned down, or if the prior investor simply declines to answer the price quote and lets it expire, the whole process will take about 30 days. As a result, every investor ahead of you in line will add another 30 days to the time that must pass before you will receive your price quote.

    0Reply
  • Robert Kennedy
    Indn Spgs Vlg, AL · Member since 2017 · 11 posts · 5 votes
    8y
    Originally posted by @Denise Evans:

    @Robert Kennedy, sometimes the delay is caused by there being people ahead of you in line, who previously requested a price quote. 

    The reason I did not take that into account because the property was sold to state for taxes over ten years ago. It is possible though.  

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