I learned this but I forgot the exact technique. Say a realtor is listing the house, and I want to market it and when I find my buyer buy and sell it, and then pay the appx amount the realtor would get for commission. I think it was John Burley who was talking about the realtor giving you a spare key or the lock box code.
How exactly do I go about doing this? Do I get the property under contract with the seller using a purchase and sales agreement but create another contract with the sell and realtor saying something along the lines of:
A) if realtor finds buyer for property will be out of the picture and his/her contact with seller void
B) in the event that investor shows and sells the property will release from contract for a price of <$1000>
I just can’t remember! I don’t have the books or PDF files anymore either, so I can’t just search for it. :help
If the property is already listed with a realtor, then the seller has agreed to pay a real estate sales commission to the listing agency regardless of who finds a buyer during the term of the listing agreement.
If you run into a seller who is planning to list his property with a real estate agent, you can always ask the seller to make you an “excepted party” to the listing agreement he signs with the real estate agent. Then, if you do buy the property, the seller owed nothing to the real estate agent because the agent was not the procuring cause.
I did this once with a rental property I wanted to sell. I asked my tenant if she wanted to buy and told her that I was planning to put the property on the market. I made my tenant an “excepted party” to the listing agreement. After the real estate agent started showing the property, my tenant did make an offer.
Hey that’s a good idea! Little different situation, though. The guy already has it listed with an agent. I’m new and don’t really know what to do so I met the agent and looked and the house and explained to her how I want to take over his payments and since it a) isn’t in his name anyway (it’s in his dead brother’s) and b) I’ll be giving him a small deposit in case if I don’t perform, she said that she would take a pay off and release him from the contract. She has to legally act in his best interest, but she trusts me and if I have given him a deposit it WILL be in his best interest so she’ll allow it.
There’s a better way but I just can’t find it! I don’t remember where it is!
I’m planning to call the seller and get some kind of contract saying that if I find a buyer that he must sell it to me UNLESS if the real estate agent finds a buyer first. If I find the buyer first we pay her off $xxx.00, he signs the remaining papers, and I put my occupant in immediately.
(I don’t want to pay off the realtor immediately because that’d be more money I’m not getting back if I CAN’T sell it. And, I guess if she sells it during that time she sells it. No biggie. And, I want him to sign the contract so that he doesn’t change his mind, but if he does, I’m not going to go after him. You might see it as a waste of time but for me it’s time well-spent on education. What I really need is the first deal done to gain confidence! If my first deal is done with these minor…setbacks…then all other ones will be easy!)
I went to a lawyer to have my forms reviewed Friday but she was totally incompetent and had no idea what I was trying to do (the forms are some I bought from Jim FL, so I know they’re legit). But, I’ll be talking to two more lawyers Monday so they can help me out. This chick was around 30 and had never seen a subject to deal. I felt kind of cool walking out of though, knowing more than a lawyer and all!
“I’m planning to call the seller and get some kind of contract saying that if I find a buyer that he must sell it to me UNLESS if the real estate agent finds a buyer first. If I find the buyer first we pay her off $xxx.00, he signs the remaining papers, and I put my occupant in immediately.”
Your problem is that the seller has already listed the property with a real estate agent, who also showed you the property. Even if you get a separate agreement with the seller, the seller’s listing agreement probably says that the seller owes the agent a commission regardless of whoever finds a buyer. You have even given the agent more ammunition to support her case because she showed you the property. What makes it worse for you is that because the agent showed you the property, the seller will still owe a sales commision even if you purchase the property as much as 90 days after the listing agreement expires.
Just to be clear, even if you buy the property subject to, you don’t pay the listing agent a fee – the seller does. If the seller does not have enough money to pay the commission out of the proceeds of the sale, then the saller pays it out of pocket.
I am guessing that any provision of your agreement that offers the seller’s agent less than a full commission will be voided in court, should the agent take you to court for tortious interference with a contract.
I am thinking that your proposed strategy is nothing more than a non-exclusive option. The seller gives you a non-exclusive option to purchase, but retains the right to sell to someone else if he should find a buyer before you exercise your option to purchase. This technique is usually structured with a buyer who is trying to sell without a realtor (FSBO). If the seller lists the property with a real estate agent at the same time you hold an option to purchase, you still need to be listed on the real estate listing agreement as an excepted party for the seller to avoid any issues over a sales commission.
Consult your attorney for specific details before you implement this plan.