Attorney Finders Fee Illegal?

Question

Rick H. · Answer

My model is based on attorney referrals (for over 25 years). Nearly 2,000 probate deals and counting. I've never paid an attorney a referral fee and never will. It's a conflict.

I've had perhaps 3 or 4 attorneys ask for a referral. It's an insult. They are flakes!

My response: 'I agree to never provide legal advice and you agree not to lend money. It's my money that permits you to get paid from your client's equity. I don't pay you to solve your problem.'

It also shows that you add little real value to a deal besides money. If you did, the money would never come up.

Best strategy: be so good they can't ignore you! Your skills and expertise should be the attraction.

Wayne Brooks · Answer

@Barrett Applegate I'm saying the idea is bad, for most probate attorneys.  They want their clients to find a real buyer, for full market price which usually means listing it, not letting some wholesaler tie it up that may not close and just drag out the prices.

Chris Mason · Answer

Instead of saying "I will pay you $1000 if I close on one of your clients' houses," I'd just throw a disclaimer in there: "Assuming you feel it is lawful as an expert on the law, and appropriate, I'd be willing to pay you $1000 if I close on one of your clients' houses to the extent that such payment may be lawful."

And, yeah, get that apostrophe right too while you're at it.

I'm not a lawyer or judge, but I think it's fairly safe to assume that a judge looking at that is going to be giving the Evil Eye to the lawyer in the above mentioned transaction far more than they will be looking at you. You pretty directly said "Hey Mr. Lawyer, I only want to do this if you as the expert say it's legal to do."

Rick H. · Answer

My budiness model has been based on being the go-to guy who's more knowledgable and the one the attorneys call. That does not happen overnight.

Way too many people have (access to) money, so that's not scarce. It's a commodity.

In order to offer expertise, you need to be an expert at something. Attorneys don't waste their time with people who are still trying to find their way and insist on working with the best that they can find in the service they need.

Also, they can be very difficult if you don't know his to handle their clients right.

My suggestion: go downtown and spend a day at your probate courthouse, sit in some open hearings. Wear a nice sport coat and dress up do you don't look like a homeless person or a guy from a real estate club.

Mark Pedroza · Answer

Maybe consider getting your real estate license. As a professional this will give you credibility to assist attorney's with their probate practice.

Mark (N-CA)

Sac/Placer counties..

Barrett Applegate · Answer

@John P. That cleared things up a lot, thank you!

It sounds like you are educated in probate strategy but you prefer a different lead generation method. May I ask what works best for you over in Vacaville? (I live in Vegas, but hopefully there are some market parallels).

John P. · Answer

@Barrett Applegate - I have seen investors write generic letters on every probate filed. They are obviously going through the court records or subscribing to a service that consolidates court records. In any event the letter might say: "Dear Attorney: I am writing in regards to the real estate owned by probate case # 2014-123jjkl. I am a cash buyer and can close quickly."

If I am a busy probate attorney with 50-100 active cases do I have time to figure out which case this is? Probably not. A better letter might be:

"Dear Attorney: I am writing in regards to the real estate owned by the estate of ________, which is ____________ county, probate case # 2014-123jjkl.  [You could even include the address if it's listed in the probate petition.] I am a cash buyer and can close quickly.  Also, if you need copies of court documents I am there every week and can get a copy for you."

Just an idea. Good luck.

Barrett Applegate · Answer

@Rick H. Wow, that is 2,000 more probate deals than I've done!

Thank you for helping me think differently about this... I'll try to make it more of a mutually beneficial relationship, rather than trying to add value with a measly referral fee.

This question is for @John P. and Rick:

From what I am hearing, you guys are adding a lot more value to the conversation than just "Hey I have money and I'll buy your clients' house if they want."

For example, John P. mentions knowing the case names, numbers, county, etc. Are you basically combing the obituaries and determining the houses before the beneficiary even gets to the lawyer's office? What I'm trying to understand is, how do you know which houses and case numbers you're looking for, before the probate attorney tells you they have a client in need?

As you can see, I am a beginner with probate law and appreciate your patience with these sophomoric questions.

John P. · Answer

You hit it in your conclusion.  Find ways to add value to the probate attorney.  Get them vesting deeds. Offer to get them copies of filed documents at the courthouse. Do something to add value and then be fair and honest.

Also, if you write letters to probate attorneys tell them exactly which house, which case name and number, which county, etc....  Busy probate attorneys will not take the time to figure out which property you are writing about if you don't make it easy for them.

John P. · Answer

I don't think any reputable probate attorneys would go for the referral fee. I think they are more likely to go for you offering a fair price and a quick and easy close.

Attorney Finders Fee Illegal?

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