I’ve been told, in my area of Boise Idaho, that BirdDogging Real Estate for other investors is illegal if I’m not an agent, etc.
I was told that if I am making money from the deal as a “finder’s fee”, then I am basically practicing real estate without a license.
Can anyone give me some general clarification as to whether or not this is true?
And also, how can I BirdDog and learn the ropes (and get paid) … and STILL protect myself?
Thank you in advance for your time!
Casey
Casey,
Others will chime in also I’m sure but, to my knowledge, it is not illegal anywhere to provide information that leads to someone else buying a property and receiving a fee for it. You are not selling real estate, you are selling knowledge.
Keith
Casey,
Glad to meet you.
Every once in while I post this on how I fell about Bird Dogging.
The local Real Estate Boards impose regulation relevant to the distribution or aid in distribution of a homestead with the intent to protect the consumer (and in some rare cases monopolize the marketplace).
Whether or not this legislation is put into place in a criminal or a civil context, it does appear fairly evident that the enforcement of this legislation would be limited to that of:
a) When a consumer is being blind-sided (ie: you are acting on his or her behalf without proper licensing and steering him/her wrong)
b) You are continuously taking a “fee” for selling real estate.
If you are working with an investor, and you are paid by the investor, who has experience in real estate transactions, and you are not party to that transaction (ie: a consultant) you should, (this is not to be construed as legal advice) be ok, for the following reasons:
You are taking a fee for selling information, not real estate (nobody can prevent you from charging $5.00 to tell him or her were the nearest gas station is, or where the nearest “deal” is)
Even if legislation was in place to protect the consumer, you have conducted no harm to the consumer…so in a semi-perfect world, you can indeed pay for a lead on a house!
I think it is important to know, most investors are opposed to the local Real Estate Boards attempting to corner the market on Buying/Selling properties, I am certainly of the opinion that the local Boards would like to see no investors/creative RE at all so that they can continue to take a small chunk out of every property sold and have the properties sold according to their “rules & regulations”.
There is also such a thing as a simple Partnership Agreement, thereby making you and the investor principals in the transaction. The Bird Dog is bought out of the Partnership by the investor, thereby violating no State Statute should they even exist.
John $Cash$ Locke
It is a little gray but I’ve never heard of any problems for birddogs. Agents may try to scare you but not to worry.
Now, if you are actually buying the properties then most states have a limit on the number of transactions you can do before you need to get a license. But it’s more than a few and enforcement is rare. Basically someone would have to complain which rarely happens if all is being done ethically.
But you are just selling information so you’ll be fine. No license needed.
Jim
The House Buyer
Bend, OR
Thank you for posting this information. I was told the exact same thing by a realtor in NC which made me apprehensive to ‘bird dog’ in NC now I know he was just trying to protect himself
The RE agents are referring to RESPA , section 8- Antikickback .
Its illegal depending on how you do the deal.
Under CO law you have to represent yourself not 3rd party for any commissions received. That’s why to make transaction legal an Assignment of Contract is usually done. You co-buy with partner and when you re-sell you split profits or whatever you negotiated with partner
Look at your States statutes
In Colorado its under 12.61-101
CEREN,
You understand that “bird dogs” find the deals and point them out to their investors, right? And it is not illegal to charge someone a fee for information.
In the truest sense, it has nothing to do with getting the property on contact and assigning it…that is flipping or wholesaling…
Keith
Keith,
After talking with a Lawyer and Real Estate Commission, they both say that if it has anything to do with being a 3rd party, its illegal. I’m not saying i’m right or wrong, its just how i deciphered the information I gathered.
I was wanting to get started in REI by birdogging a bit first to get my feet wet. I found a semi-local REI group and made an introductory post informing them of what I was wanting to do. I received a personal email from one of the members letting me know that birdogging is illegal in South Carolina. When I replied that my understanding was I was just selling information and there should be no problems, this is what I got back:
In South Carolina law it is referred to as facilitating. Even a licensed agent has to have a signed listing agreement or a signed buyers agency agreement before they are allowed to accept a fee. If they do not they are acting illegally.I hear the buying and selling information argument all of the time. The
truth to the matter is if you are involved in a real estate transaction
where you are not the buyer or the seller you cannot accept a fee.That is the law here. In many other areas of the country birdogging is
totally legal. REALTOR’s have a big lobby here. You can always go at it the
old fashioned way and get out there and find you some owner financed
properties that you can do minor cosmetics on and sell at a good profit. To
make a good living in real estate you will work harder that all the
commercials say you will but it will be more fun than you can imagine.
I’m not trying to start anything, and I’m not trying to claim that this guy doesn’t know what he’s talking about because he’s certainly been in it much longer than I. I just wondered if there was anyone around here that dealt with properties in SC that might be able to offer some insight on the subject. Is it possible that he misunderstood what my intentions were, or is he absolutely correct?
Thanks for any help
If I came to you and said hey I know where there is a great deal where you can make 30k in a month and all you have to do is buy this piece of gum from me for $1,000.00 and the deal is yours how long would it take you to buy that piece of gum? You would be blowing bubbles in less then 10 minutes I live and wholesell in Colorado. Want to buy some GUM I have a whole pack of it sitting right here!! LOL have a great day! Robb