can a bird dog agreement be as simple as this?

Question

Consultant agrees to generate leads for Seller/Buyer. Compensation from Seller/Buyer to Consultant is a marketing fee of % of net profit.

Agreement can be cancelled by either parties any time.

Any other clauses that are needed?

Account Closed · Answer

A binding agreement can be made very simply. Three elements are necessary an offer, acceptance and consideration. The problem is that you want to insure that the agreement covers what is expected of both parties, defines what must be accomplished to be compensated, when compensation is paid, how it is paid and how much that pay is. The other party may want some protection as well. If there is a dispute how will it be handled. There more situations that are addressed in the agreement the less chance that arbitration or other challenges may occur later.

Kim Anderson · Answer

Also, why not start with the bird dog contract template Josh has provided for us here on BP. http://www.biggerpockets.com/forms/bird-dog-agreement.pdf This at least gives you somewhere to start and then you can tailor it to your own needs. And as J Scott stated, be sure to let your attorney look at it and give the thumbs up.

Bill Patterson · Answer

If it won't hold up in court, it is only an "understanding or job description" and is not worth too much. As Charles said, only three things are needed to have a legally binding agreement. The rest of it either spells out details or clarifies specifics, so that if it ever reaches court, there will be less to argue! We always provide our own bird dog agreements and Iâ€™m surprised that this responsibility is left up to you. If you don't want to spend the $$ for an attorney, at least post it or have some one you trust on BP look at it. We would at least make sure you have not set a trap for yourself! BTW, most of us are NOT ATTORNEYS!! Bill

Jason O. · Answer

Good idea. I don't think I'll go to a lawyer. I don't want to shell out the cash. At first, partner said he didn't want an agreement unless I wanted one, but Friday he insisted. It doesn't seem like he's expecting a highly detailed agreement that will hold up in court.

Jason O. · Answer

Net profit would be after all the closing costs. The only way a deal closes is when I get the paperwork signed with him along with seller. I'm providing my fee for finding the leads, mail outs, and phone contact with owners.

Bryan Hancock · Answer

Disclaimer: Not legal advice ;-) Here is something to get you started with the net profits sharing part of your agreement: Net Profits Sharing. All â€œNet Profitsâ€ arising at any time from any of â€œClient's Real Estate Transactionsâ€ shall be split between X and Y as follows: X Share_____________ % Y Share _____________ % As used herein, the following terms shall mean: "Gross Revenue" shall mean the total monies, fees, promissory notes, and all other forms of renumeration received by Client at any time from any of â€œClient's Real Estate Transactionsâ€determined on a cash rather than accural basis, from period to period. "Net Profits" shall mean all gross revenue received at any time (specifically including gross revenue received after the term of the Services Agreement), less reasonable expenses, all of which shall be determined on a cash rather than accrual basis, from period to period. "Clientâ€™s Real Estate Transactions" shall mean any transaction involving real property which was closed, consummated or first identified during the term of the Services Agreement, and shall include the purchase, sale, leasing, financing, management, or operation of real property, as well as any other entitlement or interest in any real property arising directly or by participation in any corporation, partnership or other entity. That comes straight from one of our engagement agreements that has already been "lawyered." Keep in mind that it will likely need to change a bit for your use, but this may be something to insert in the standard BP agreement if the language is soft...I am too lazy to review it.

Jackie Patterson · Answer

How and when are "marketing fees" paid? What responsibilities does each party have? How is the net profit determined? What constitutes a lead? Your suggestion is too basic for me, and I don't think provides the necessary protection for either party.

J Scott · Answer

What is the purpose of the agreement? Are you looking for something that will be enforceable in court? Are you looking for something that will clarify roles and responsibilities are both parties? Are you looking for just a basic description of what you'll be doing for him? Regardless of which it is, I'd think you'd still want more than this. For example, how do you define net profit? Or the fact that the agreement can be canceled at anytime -- does he still owe you money if he cancels before a deal closes? What exactly are you providing for your fee? And, of course, if this is something you expect to hold up in court, it is far short of what you probably want. I would recommend talking to an attorney.