Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Real Estate Agent
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated 8 months ago, 04/25/2024

User Stats

6
Posts
0
Votes
Jade Smith
0
Votes |
6
Posts

Unlicensed “property finder” charging tenants one month’s rent?

Jade Smith
Posted

Is it allowable for an unlicensed “property finder” (unconnected to any brokerage) to charge tenants large commissions to find them luxury homes to rent? 

Here’s the detail:

Last year, we were tenants looking for a very specific luxury property (we needed an owner that would permit us to sublease when we were away travelling). Impossible to find, and no luck through our broker.

We were approached by an unlicensed “property finder” (not connected to any brokerage) who convinced us to let her search for our home.

She found us a home that hit our specs (including a wonderful landlord allowing us to sublease) and charged us a finder’s fee of an entire month’s rent (18k). At the time, it was worth it. But we now know that many of these unlicensed finders are not following the rules.

Is it even allowable for an unlicensed “property finder” to charge tenants like this?

I know the rules for how licensed brokers can pay “unlicensed finders” is clear, but what about when tenants are the ones paying? 

We were under the impression she would just find the property for us and let us take it from there. But she inserted herself heavily in the negotiation, even after we asked her not to. We had no agreement with her that she could negotiate on our behalf. Isn’t this a licensed activity?

We learned later that she was asking for a commission on both sides, asking an additional 18k from the landlord’s broker! She had no interest in getting the rent down for us, and was playing both sides. Of course they didn’t pay her.

She made us sign an MOU where payment was contingent on the lease being signed. Doesn’t that go beyond what a finder can do, which is simply to connect two parties? 

We pay her in chunks over the course of the 3 year lease. If what she was doing was offside, I don’t want to be doing this.

Finally, please don’t judge - we know we were too naive at the time, and we would only ever work through licensed brokers now. She was a master convincer, saying her role and fee was completely permissible, and we trusted it.

Loading replies...