Well, I'm still new, and I hear what you are saying. I'll change my title to a Note Finder, which I looked up to be a more common industry title.
Now, here is where I disagree about your classification of my job. True, what I do is similar to that of a note broker, I handle notes between a note buyer and seller to receive compensation, but let me explain why this "straight arrow" definition doesn't really stand.
Many people are used to the connotation of â€œbrokerâ€� (as one who represents another) as it applies to real estate broker, mortgage broker, insurance broker, or perhaps even stock broker. But those occupations all require training classes, licensing, and employment agreements with established institutions in order to get started.
Now, maybe itâ€™s just because many donâ€™t understand that the word â€œbrokerâ€� has several common definitions. It would seem so; given that so many instinctively dive into the Note Finder position with the notion of â€œacting as an agentâ€� for another, or â€œrepresenting clientsâ€�. But why would they even think about doing so, without having gone through the complicated procedures of learning all about the art and science (and in many cases, legal requirements) of â€œrepresenting othersâ€�â€¦ i.e. â€œacting as an agent for others?â€�) I donâ€™t know, but as a note finder, I'am not bound by the same rules and regulations as agents or note brokers
The term â€œbrokerâ€� has created a false impression on many sides of the table with new note finders, state regulators, and even in the courtroom. The law of agency doctrine puts another layer of legal obligations (i.e. â€œduty of careâ€�) on those who act on behalf of another. This is particularly so if we are acting on behalf of another, for a fee. Such â€œthird-partyâ€� â€˜clientâ€™ representation attaches with it, various requirements for disclosure of material facts; indirectly limits the amount and type of compensation we receive; imposes minimum standards of trust and competence in both our due diligence and negotiating skills â€“ and frequently, creates liability for any advice we might offer to the â€œclientâ€�. In many states, licensing issues even come into play, if you intend to represent clients, for a fee.
A finder is described as one who finds, interests, introduces, and brings parties together for a transaction â€“ The principals themselves subsequently negotiate and consummate. In other words, a finder is a middleman who is not involved in the negotiating of any of the terms of the transaction between the buyer and the seller. Acting only as an introducing party allows me more latitude to act in our own best interests. Essentially, as a finder, we are passing along information that we gathered ourselves â€“ this information, along with our access to buyers, is our stock in trade.
Now, legally speaking, Many states have upheld a finderâ€™s exception to licensing requirements related to real estate, mortgages and loans, business opportunities, and even securities transactions â€“ in states where such issues have gone to court. California in particular, has a well-settled history of supporting the finder exception to licensing laws in all of these professional areas!
California courts have consistently held that such an intermediary, or middleman, is protected by the finderâ€™s exception to the real estate licensing laws, an exception first established by Californiaâ€™s Supreme Court in 1923, in Shaffer v. Beinhorn (190 Cal. 569, 573-574; 213 P. 960 ). In that case, the Court held that a person who contracted to introduce a seller to a prospective buyer acted as a finder; and that one who simply finds and introduces two parties to a real estate transaction need not be licensed as a real estate broker; and in such cases, finders are entitled to be paid the finder fee agreed upon by the Parties to the Agreement.
That is a proven and legal way to start in the "cash flow business" without money of your own. I'm a living example of that, since I have closed 4 deals. It's a small accomplishment but it is a note worthy experience to go off from.