Super strange situation. Please advise!

[Daniel Vaccaro]

Hey everyone,

After picking up my first door, I decided to go big and try and take down 8 more doors in a single portfolio acquisition. The deal looks right, but we are running into some frustrating road blocks. 

I found the deal through a wholesaler, who has been representing the seller and graciously agreed to seller finance 15% of the deal. Recently I have been trying to line up a time to send my property inspector in to assess the property as I am investing out of state. My Inspector was unable to get in touch with anyone to set up a time for his visit, wholesaler included. 
Come to find out that the current Property Manager is demanding 3% of the sale price as a fee, before he will allow our inspector in to the properties. Apparently the seller has a clause included in his contract that the PM must be the sellers agent in the event that the seller wants to sell the home. 
Has anyone encountered this before? And does anyone know if that is even legal? The properties are in Indiana. 

I don't want to go through the PM simply because I don't want to lose the 15% of the deal the wholesaler was willing to finance for us. He has also done a lot of work to get this deal done and I wouldn't feel right about cutting him out in the 11th hour. 

Worst case scenario, the seller would be the one to eat the 3% fee the PM is charging right? 

Looking forward to hearing from this wonderful community, thanks for the help!

[Greg Scott]

You are describing what is a very common clause in a property management agreement.  In most states property managers have real estate licenses.  Managing property is a fairly low margin business.  They augment their income by getting the sales commission should the owner want to sell.  I've sold many houses through my property management company.

Typically commission is paid by the seller, and in this case, since they have the contract with the property manger, they SHOULD be the ones paying for it. 

You may not even need to renegotiate any purchase agreements.  The seller should have known this before he signed the contract.  The seller should eat the 3% due to their error.  That said, it could get messy if the seller refuses to cut in the PM.