REO Commission to Realtor

Do you guys pay any commission to Realtors for assisting on REO wholesale deals, if so, how much?


Do you mean the listing agent for the REO?


The agents get paid a commission by the seller when the property is sold.

You, as the buyer, don’t pay them anything.


HUD REO agents in Michigan get $2500 and the broker gets a $500 bonus. Herbster

Commissions are paid by the seller. If the Realtor is charging any other additional fees, the buyer would be the one to pay.

“REO Wholesale deals”? In our state, and probably across the country, most lenders don’t allow an assignment of contract on a property – the buyer must take title in their name.

Now, there might be some ways to work around that if you set up a SPE just for this transaction, then sell the shares in the SPE at anytime during the transaction (but keeping the original stockholder on as manager, until the transaction closes), but I’m not aware of any other way around this. Event this is pure speculation.

So are you asking whether you can, as an individual, non-licensed investor, pay a commission or finder’s fee, to a licensed agent for finding you a buyer; and doing so prior to the close, so that you can close the B-C transaction on the same day as the A-B, or very close?

Flesh this out a bit more so that I can follow your train of thought. I’m kinda dense at times.

You do not pay a commission or fee to the Realtor the seller (the bank in this case) does that. Now that does not mean that you can not be nice and give a “gift” (dinner, tickets to a show, etc) if they are helping you move a lot of properties… But that would be a marketing fee not a commission.

If the Realtor is charging you additional fees, then you need to weigh whether or not the service of this Realtor justifies what they are asking… If you are closing one or two deals a month through them… they should not be charging you upsell fees…

To respond to obiwan1250, yes in most cases most lenders do not allow you to “assign” a contract, but that does not mean that you can not wholesale a REO… One option is to form an LLC and then sell the shares, however I would think that would be one of the more difficult ways to do a wholesale flip.

Personally I would consider a double close (if you do not have the upfront cash, then use transactional funding to cover your share – just make sure that you add enough on the spread to cover the expense of the borrowed money)

Or you could add the end buyer to the contract via an addendum and then give a quit claim deed to the buyer once he pays you…

I am sure there are other