To all the real estate agents out there, I have a question.
I live in the state of New York and I have acquired five people who are interested in purchasing a house in the next three months. Knowing a few RE agents out there, I would like to send these buyers to them. But I would like a finder’s fee for sending these people to the re agent. Is this legal to do without having a re license? I don’t want to go through the hassle of obtaining a re license and having to work with the buyers just to obtain a commission. I already have a full time job that I enjoy.
Any help would be appreciated.
Mike Weller
I would send them to a RE agent who I trust will pay me if one of the buyers decide to buy a house.
I don’t know of any ‘legal’ ways of having this done… RE agents get paid through their broker, and the broker won’t cut a check to an outsider as a finder’s fee.
If you want to get paid you are going to have to get licensed. No intelligent person is going to risk their license to pay you for a lead that may or may not pan out.
Hello
The only “legal” way to be paid is when the payment is not based on the outcome… with that said the agent can pay you for “ALL” leads irrespective of whether they produce them results…
You then become a walking classified ad.
They also can Hire you as long as you do not talk values, price or commission with a prospect…
Good luck
Michael
Hi there.
You’re actually walking a very fine line with ‘brokering’ where you would need a license. Micheal is right, but you still need to be very careful.
the best thing to do is:
- Get your license and you won’t have to worry about finder’s fees
- this will produce much more income for you and will keep you on the right side of the law: learn to put properties under contract and wholesale them to these investors.
If you are able to find deals, this is a valuable commodity.
Capitalize on it as much as possible through wholesaling or even partnering up with investors who have cash/credit.
Dennis
Mapmakerny
Not familiar with New York laws so check with their department of real estate.
However some states like California allow finders fees for the introduction only of one party to another. In those states you still run into the problem of it being a possible respa violation.
What some agents do is just return the favor of you providing them business leads by providing you with commission rebates or reductions when you do any business with them as a reward for your loyalty. Or maybe they “participate” in one of your investments with you some how.
Brian…
I tell everyone one of my mentees to ask their agent to plug them in their advertising by putting their business card at the bottom right hand corner of the magazines the agent advertises in…
You must check with the New York State Realty Commissioner before starting your plan.
I was a real estate broker in California some years ago and it was perfectly legal to pay finder’s fees to unlicensed people.
I had a huge referral business precisely because I paid exactly 10% of my commission check earned out as a finder’s fee, mailed it out the day I got paid the commission. This grew my referrals exponentially. Even as a new agent, I never farmed, door-knocked, or did cold calls. I was too busy listing houses, showing properties and writing contracts. The finder’s fee was also tax deductible as a business expense.
It only takes 1 client to start this great referral business. One client who receives that phone call, “Thanks for referring your cousin, Joe to me! Joe bought a house, we closed today, and I just put your check for $420.60 in the mail. Just introduce me to anybody buying or selling and I will send you another check the minute we close escrow!”
A week or two later I would get another call–“Joe just bought a house through you and he insisted I shouldn’t use anyone else. When can I come in?”
Anybody working as a agent or broker needs to know their state law regarding referral/finder fees. Anybody unlicensed needs to know the law as well if they are planning on receiving fees.
These finder’s fees are also a goldmine for locating real estate to buy. (See fdjake’s postings on his finder’s fees successes.)
Furnishedowner