I’m working with a seller that’s an investor that buys property and wants to partner with me to find him a end buyer for one of his own properties, but doesn’t want to do a purchase and
sell contract with me.
He wants to just do a marketing fee agreement but he wants me to find a end buyer first then do the agreement.
Does anyone know how to go about this type of deal. Should i get him to sign the agreement now or wait to see what my buyer that i find will pay. This investor is not another wholesaler, but i know I’m still giving up a buyer but he’s my buyer to I’m confused on how i should go about this.
I do not like the marketing agreement idea…because I would want the property tied up in a sales contract. The exception to that is if I already have a contract to buy a house from a party, I was attempting to wholesale it, and a 3rd party wholesaler was attempting to wholesale it to his own buyer…then I would not mind doing a marketing agreement between me (the wholesaler) and the 3rd party wholesaler. But that does not apply to you in this scenario.
I would offer him a very short term contract - e.g. in Texas I would do a contract with say a 1-2 week option period (you could give him $20 option fee) and 2 week time to closing, then explain to him if you cannot find a buyer in 1-2 weeks you’d terminate the contract by executing your option… which in Texas would be without recourse to him or you. If it’s a good deal you’ll assign it in 24-48 hours. If it’s not a good deal, just lose your $20 and move onto the next deal. =)
I believe the reason why the seller/investor doesn’t want to put it under contract with you is because, he may be marketing the property as well. So what he is doing, is using you as another viable option to bring a buyer to the table.
He doesn’t want to tie the property up with you, if he can bring in a buyer quicker than you can. If he does put it under contract with you, he is obligated to sell you the property and no one else. This is what he wants to avoid. It sounds like he wants to keep his options open. Even with that being said you should still get an marketing fee addendum signed between you and the seller. If the seller is not agreeing, then this may not be worth your time.
This is what you should do if you still would like to go along with his terms. If you happen to find an end buyer before he does, make the original sale and purchase contract assignable between you and the seller, so you can assign it to your end buyer and you walk away from the closing table with all net profits.
Try to get a option contract just so you have equitable interest to market the property. Wait till you find the buyer and go to closing and have him sign a marketing fee agreement and send to title co. Above all just be honest.