I totally hijacked some poor guys post, so I want to get some fresh opinions on this.
So I have a HUD deal I'm wholesaling, an agent brings her client to the deal wanting 5k that the buyer has agreed to pay ( her commission at 3% would have been $4500).
What is best legal, most ethical way to structure this. What documents or wording in the contract should be included?
I answered this on the original thread, but I think this is the way it would usually work:
There are two transactions, right? HUD to you, you to the end buyer.
On the first transaction, HUD listing agent gets 3% and your agent gets 3%.
On the second, your agent gets 3% and the buyers agent gets 3%.
Unless you come to a different arrangement with your agent, since I gather he never actually listed the house?
You should also be aware that in my state, that sale is two transfers, and therefore transfer tax is due twice. I don't know about your state obviously.
If her buyer agreed to pay the $5k, then let him pay it, to your agent's broker, on the HUD. This assumes she's collecting her fee "as an agent". If she wants it direct, then she'd be a "partner" with you, and you'd raise your price $5k, pay her $5k for her "split". She could be running into some legal issues that way, but that's her problem, if she's trying to side step her broker.
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