Bird dog question

In my state it is illegal to pay a bird dog to find leads unless you pay them for every lead that they bring to you, not just the ones that you close on. I haven’t actually read the law, but everyone in my reia group has told me this is how it is.
My question is this could I somehow make them a partener to the deal to make this legal? Has anyone had to deal with this before?

who is going to report you to the commission?

Pay him a dollar for lead, and a bonus for one you close on.


Glad to meet you.

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:

  1. 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)

  2. 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.

John $Cash$ Locke

PS: I think someone in your reia group is having a little fun with the being paid for every lead or it is illegal, just think about that one for a moment. Of course I would be very interested to see the State Statute that say this, so ask them under what Statute this is written.

NH Bird Dog Bill 101 maybe.

Thank you for the lenghty response, but what I have heard of was people that were advertising for bird dogs getting calls from the state stating that what they were doing is illegal although I forget the specifics. I will further research this. To see what the specfics are.

I did a little more digging and this is directly from the RE commision website.

331-A:34 Penalty.

Any person acting as a real estate broker or real estate salesperson, without a license, shall be guilty of a class A misdemeanor if a natural person, or guilty of a felony if any other person.

Im not sure how the people at the reia group decided that it is OK to pay a bird dog for every transaction, but not single transactions by reading this.
I know that wholesaling is legal because you have an interest in the transaction and you are not acting as a broker or an agent. My thought is that if you consider your birdog a partner in the transaction how can that be acting as a broker or agent?


[b]"331-A:34 Penalty.

Any person acting as a real estate broker or real estate salesperson, without a license, shall be guilty of a class A misdemeanor if a natural person, or guilty of a felony if any other person."
If you take this statement out of context and this is all that is quoted then the following would apply to my next statement.

How many people in New Hampshire have been locked up for selling their own property as a principal in the deal? Or how many people have been locked up for buying a house as a principal in the deal?

Are FSBO’s considered acting as a real estate broker or salesperson for selling their own property or buying someone else’s, because they do not have license to do so?

The reason they are not is because in America people are allowed to buy or sell properties without being licensed as long as they are the principals in the deal.

If you are my Bird Dog and bring me a property and are really concerned about the law even though you are not buying or selling the property. then we form a simple partnership, which makes us both principals in the deal and there is a provision to buy you out of the deal at some period in time, we have violated no law that I know of, currently in the State Statutes anywhere.

Who runs this reia group where you are, because I heard this and heard that does not cut it concerning the law, just show me the State Statues where the laws are defined and therein lies the true and correct answer.

John $Cash$ Locke