When to pay a bird dog

i have found somebody to Bird Dog for me. I have offered $500 for every deal she brings to me that I close on.
She wants $500 when I get a property under contract. My reservation is that things beyond my control can cause closing to fall through.
Her stance is once I get the property under contract she has done her job. I can see her point but I don’t like it.
Your thoughts please.

Hello BMP,

The referral fee should be paid after the closing is complete; we all know a deal is not a deal until all of the paperwork is complete. If you have a contract with your bird dog this should be spelled out. As you build a relationship with this person, and she learns the types of properties you are looking for, and constantly brings you good deals, then you may want to consider some type of full or partial “pre-close” payment. Good luck.

I was going to post the exact same answer last night during the Houston ball game but got to excited and did not. Hope getting the same answer twice helps you decide what you already knew was the right way to do it. She does have a point but you can not afford to pay for every deal that could fall apart. Kary just told me of a deal wher she thought the title company was OK and ready to close. She found out the day of the closing that one of the spouses to the owner had died previously and they needed their signature to close the deal. Too many things like this can and do go wrong all the time. Give her some examples like this and she will hopefully understand. It has to be a win win for all parties. Maybe take her to a nice place to eat for a fat steak or me if not her.


Glad to meet you.

As an investor and as a person who wrote the book on Bird Dogging, here are my thoughts.

First let’s put the shoe on the other foot. An investor gets a great lead and blows it because of something the investor did. This was no fault of the bird dog, the Bird Dog just lost $500, yes it can happen. So we must look at the situation from two different points of view.

When I get a lead from a Bird Dog, I first do my due diligence before I put the property under contract. If I missed something before I put it under contract then I did it, not the Bird Dog. Once I put this property under contract then it becomes my responsibilty, the Bird Dog has done their job, I just have to make sure I have done mine.

I will agree as time goes by and you are working with your Bird Dog or vice versa then you both become comfortable with one another. The Bird Dog knows if you are a investor who gets the job done and you the investor know if the leads you are receiving are worth paying for.

If I as a Bird Dog had to wait until the deal closed then my price would go up for having to wait and it would be a percentage of the overall deal not just $500. I know we as investors have a lot more at stake responsibility wise, but I can assure you Bird Dogs are worth their weight in gold, when the fat lady finishes singing or in our case when the deal is done and we head for the bank with alot more than $500.

John $Cash$ Locke

A bird-dog is no different than anyone else in the industry.
A Realtor may spend their whole first year developing a client farm which results in 1 or 2 regular closings a month.
As an investor, we have it even worse. How would you like to float 150k through the first purchase close, re-hab, marketing and the re-sale close. You may be talking 60-150 days or more before realizing any profit.
Until it closes, it’s a potential deal, not a done one.
Even if the deal does not close with YOU, the bird-dog is not out any money as it only takes one piece of paper and a little ink to re-assign it right back to them. They can then address what prevented closing or drop the contract through their own backdoor clause they put in the contract. They will still have the original contract which they spent some time, gas and talking to get. That’s really a minimum vested interest.
A good bird-dog will develope his business network much like a Realtor does. If they can’t wait a measly 30-45 days to close, (often considerably less on pre-foreclocure deals), they should consider a different field.
I don’t pay painters until it’s painted, or builders until it’s built etc…

Take a bit of advice from a former bird dog and now a project manager for contractors, bird dogs need dog houses too! Just a suggestion - pay your bird dogs a seperate reward for getting potential deals under contract with all the info required and then another reward at closing. Why? You as an investor would have to spend time, gas, phone bills etc. anyway right! Well, this is why you give them a home and let them earn the reward. Grant it though, just starting out money may be an issue, believe me I know but your only giving them money you would have spent anyway. Now your time is spent on finding deals elsewhere while the bird dog is on the street. Send him or her to investigate your findings as well with a list of information that you want them to gather and you will actually be saving money! That’s how a dog becomes mans’ best friend. Feed him and give them a home get it. ;D

I personally have thought about that myself that is why I just find my own properties but I think you should make sure that you have your seller under contract and protect yourself from any wrong doing on the sellers part and make sure you have a buyer that is approved to close the deal and then you should pay her. Or wait til the deal is about to close. Right before closing or dont tell birddog details until u close.

I have to agree. Pay the bird dog for accomplishing the first step, bringing you a qualified lead.

How much is up to you but pay for what you get. If the lead pans out and a sale results then pay a bonus!

I agree. You need to pay your bird dog for every lead they generate whether they end up making money or not. They need to get you all the info you require and pay them per lead…$30 or something like that. This way you know you get quality up front because if the lead does not come with complete info they don’t get paid. You don’t have to keep track of what ends up closing for them and they have cash up front reward and will turn around and keep generating more leads.

I have never pd until close, nor have I ever Been pd until close, not a smart thing to do.

have fun,

I have mixed emotions about the time to pay. Depending upon the fee I’d pay partial or all up front to get a deal. In your case, you are only offering $500, no big deal. I’d pay if she were bringing me deals.

I pay $10,000 for leads, but I’ll typically pay a little up front and the rest when the property closes.



Cash and Cook have a good point!

And both have been insanely successful!

Life is never black and white!

have fun,

You have to feed the bird-dogs well in order for them to bring you a steady flow of deals. If you are talking only $500.00 why not pay them and explain to them that if for some reason you cannot close due to circumstances beyond you control, then they will have to reimburse you… You could take it one step further and tell them that as soon as you get a clear pre-lim from the title company which should only take 2-3 days, then you will pay them their fee.

You need to really think outside of the box on this one… If you don’t pay them until closing, then they will eventually find some other investor who will. Now if you are talking big money, then some compensation on the front end and some
on the back-end would be appropriate.

Best Riches,
Jeff Adam

:stuck_out_tongue: Thank you!! One for our side!
Trust is the word for it. They are paying for great info they can not get. Many investors think they are the only one we work with. My best investors I give the info lead to first, if they do not act on it, I pass it on to my other investors. Many are looking for the same type of thing, the really great deals go fast! I work hard for all sides, and I will get paid fairly, or there is no next time.
Many times there are commisions and extra selling agent Bonuses in the deal, if your a Realtor like I am, I have even shared them with my investors, for a fast sale. It goes both ways. I know Texas markets, and inside track info that out of state investors may not know about what going on here. I work all over the state for my investors, so if you find a good “fat lady” keep her happy!
Linda Tx this fat lady sings on the way to the bank!

In response to Terryall’s post saying, “You need to pay your bird dog for every lead they generate whether they end up making money or not. They need to get you all the info you require and pay them per lead…$30 or something like that. This way you know you get quality up front because if the lead does not come with complete info they don’t get paid. You don’t have to keep track of what ends up closing for them and they have cash up front reward and will turn around and keep generating more leads.”

When speaking of info provided by your bird dog what type of info do you require him/her to provide you with that you would consider quality info?

Aloha & Happy Holidays

I’m just getting started. This sounds like a good fee plan. I’m going to use it.

Hi all,
I posed this question on a different topic, but its still relevant…

When is this discussed? Does the bird dog state their desired fee for each lead or assignment during initial conversation with an investor who has stated that they are always looking for bird dogs? Is there an average?
Do investors usually try to set their fees for leads or contract assignments?

As you can tell by my name, i am new to this and starting in the new year I’ll be hitting the ground running with this and I just want to be sure of how this part works…

SD Newbie