illegal or legal?

I started taking the course to get the RE salesperson license here in New York. I just learned that if i’m not a salesperson or broker, and I know a seller and a buyer, and I introduce them to each other and they do a transaction, it is illegal for me to get payed a fee for that. Is this true?
I know a lot of investors in new york that do just that. They find a property, they find a buyer to purchase it, and they make big money. Is this illegal?
If the investor puts the property under contract and then assigns the contract for a free, is that legal?
If the house is not under contract, and he just gets a finders fee, is that legal?

You are not allowed to represent the seller or the buyer. To do this transaction you come in as the buyer and get the property under contract. When you get it under contract you also want Power of Attorney so that you can sell with-out having to track the down the seller, get them in to the title company. With POA in place you have control and the ability to sell.

By following these steps, you are buying and selling, not representing. And you are not taking a commission (which would be illegal)

You can buy and sell your own houses all day long.

You will either Assign the contract for a fee or do a Double Closing. On the closing statement will show a breakdown of who gets what money.

thanks for the thorough explanation.

what if the house is not under contract, and the buyer pays me a large finders fee, is that legal?

once i become a salesperson, and i put a house under contract, i have to disclose that i’m an agent, right?

and welcome to the forum :slight_smile:

If somebody gives you money, you want to make sure that the seller is not going to back out of the deal. You may also end up with a bad rap. if your selling someone a house and all of a sudden, you can’t sell them the house.

I would not want to hold that money unless I have full control.

The license is something that you can do without. If something happens the Attorney General can put a hold on things and prevent you from selling. In most states the same rules apply to Building Contractors and Salesperson’s. With Contractors, if they have a claim filed against them. The case will go in front of the board, they will determine if wether or not they are going to suspend the license until things are resolved. If things are not resolved the case will then move on up to the attorney general, where your license can be revoked.

Now, I would find out how your state governs the licenses before deciding to follow thru, and get the license.

Either way you just need to know where the boundries are, and do not cross them.

If you submit an offer in New York and the seller agrees to you signing it with your name and or assigns you can assign the contract for a fee. The new purchaser is buying the contract from you and it is not considered a commission. If you are licensed in New York and probably most states you have to disclose the fact that your a salesperson/broker per license law.

Just to clarify, I have heard that in New York a buy offer can not be made directly to the owner, it MUST go through the owner’s attorney. Is this correct and what do you do if the owner has no attorney?

New York is a litigious state so you have to use a lawyer to close. You can add a contingency on the contract for lawyer review but, an offer does not need to go to the attorney to make it valid. It will go right to the owner unless the owner has given a POA to the attorney for that purpose.

Attorney’s have a lock on them being involved in real estate transactions in New York unfortunately. I think there are about 15 states that are the same. We all know they are not needed but, the bar in New York has it locked down that way. It should be an option not mandatory.