A buddy of Mine knows that I have flipped and rented homes so he and his wife asked me if I could help sale there's and they would give me a little bit for my troubles. I'd really like to help my friends but don't know if even legally I can do that. My thought was simply do a for Sale by owner and I'd help show the house and get all the contracts in order. Does anyone have any experience doing this? ANy tips would help
You need to have an interest in the property to be able to sell it. You could attain an equitable interest by getting an option to buy their property. Once you have that interest you can sell it.
Do you have an agent you've been happy with when selling your flips? I'd pass them along to that agent.
Jon Holdman, Flying Phoenix LLC
If you are Not collecting a fee, in most states you can help in any way you like. Some might suggest if you Are looking for a fee, maybe your friend gives you a new lawn mower(that he suddenly doesn't like 1 day after he bought it) or some such. But don't be filling out contracts for him, that borders on practicing law.
Jon, I think there just trying to save the 6% cost for an agent. Bill that is an interesting concept, Have you set an option to buy contract before? my friends are a bit uneducated about options such as these. I speak with them concerning your tip and see where I could go from there. I may be in touch for more advice
haha wayne no just leading him to the right contracts. Not filling them out for him
Originally posted by @Derrick Mehal :
Jon, I think there just trying to save the 6% cost for an agent.
50% of that cost generally goes to the buyer's agent. So, you'd really only be saving them 3%, unless you were planning to find a buyer who didn't have an agent...which is much, much tougher to do...
@Derrick Mehal - Technically, this sounds like you are doing real estate brokerage without a license. And it sounds like your friends have also not been educated about the value that a good Realtor brings for that 6% that they are trying to save. I recently save my clients a big chunk of money in the negotiation process and also saved them a good chunk by getting it sold quickly. That's what they're getting for that 6% (plus a lot of other valuable services).
Your acting as a licensed real estate broker without a license. That is a no no.
It's my opinion that we educated and savvy sellers can save themselves a portion of the listing fees (~3%) by going DIY without selling for less, taking more time or loosing out in negotiations. Based you what you said, your friends don't fit that bill. As long as the deal goes well, you would probably be ok helping them out. If things don't go well, you've lost a friend and maybe gotten yourself in hot water with the state, potentially the bar association and the real estate licensing board.
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