Hi everyone,
I found my first deal and it looks like it will go thru. I have a motivated seller and a HML Buyer. We have discussed the PP of the house that my seller has with everyone and it looks we are within a few thousand dollars to close the deal. My question is should I protect myself with a contract with both parties for my fee? What type of contract should be used and what is the best way to get it done? Has anyone else used a contract when Bird Doggin? What’s the norm. Help!!!
For birddogging there is rarely any contract needed. You refer the deal to the investor. if they get it done the investor owes you the agreed upon fee (normally $200-$2000) You really don’t need anything else. Yes it is true the Buyer could stiff you, but that is actually very rare. The buyer knows you brought them a money-making deal - hopefully with the possibility of even more deals in the future. It is in their best interests in keeping you happy.
The only time you really need something in writing is A) You think the buyer is slimy and you don’t trust them - but then, why do business with them? B) For whatever reason, the buyer wants you on the HUD-1 (normally because the referral fee is coming out of his HML and he needs to document it). then just a litlle infomral letter of “Buyer agrees to pay Birddog $XXX as a finders fee.” That’s it.
The other way is to do it as a wholesale, where you actually do the purchase contract with the seller, then either assigns your rights to the deal to the buyer, or do a double close so both deals (Seller to You/You to Buyer) closses at the same time.