Question About Lead & Realtor Finder's Fee?

Question

Hi, question: And this is probably dependent on the state, but if a wholesaler has a warm lead that they've found for a homeowner who wants to sell but doesn't want to deal with a wholesaler, is it possible for that wholesaler to receive a finder's fee or somehow be compensated if they pass that lead onto a local real estate agent? I know realtors are bound by state regulations and parameters. Also, the wholesaler is fine with passing this directly to an end buyer too.
Any feedback or input would be appreciated.

Jonathan Greene · Answer

In almost all states, if not all, you can not get a referral or finder's fee from a realtor if you are not licensed. Why are you bringing in a realtor if you are a wholesaler? Bring in an investor, that's your job, and have the end buyer pay you for giving access, but you have to be the middle person.

Caleb Brown · Answer

Here in MO we can't pay a finders fee to a unlicensed person.

Lue Blackwell · Answer

@Tchaka Owen--thanks for the input. The contract fell through but I didn't find out why because as soon as he found out that I was also a wholesaler, he was effectively, done. lol..but I will take your advice and continue to follow up with him. Certainly, cannot hurt.

Lue Blackwell · Answer

@Yoann Dorat--Thanks so much for your input!

Tchaka Owen · Answer

First thing I'd do is find out what their hesitation is, ie, what is the reason they don't want to sell to a wholesaler. You haven't shared that, is it because you do not know?

Ultimately, if the seller doesn't want to sell via a wholesaler, you thank them for their time and ask that they keep you in mind in the event that their other route does not work. Then leave.

Yoann Dorat · Answer

@Lue Blackwell the best and safest way to be compensated is to be licensed. You can play in the grey area but at your own risk.

In my opinion it's not really worth the risk as it's fairly easy and cheap to get licensed

Lue Blackwell · Answer

@Jonathan Greene I am a newbie and just asking. But thanks for the info.

Lue Blackwell · Answer

Hi, thanks for both of your input. So does anyone have any suggestions on what I could do with this lead? The person is definitely interested in selling. He just doesn't want to sell to a wholesaler or maybe I'm too green?

Lue Blackwell · Answer

Thanks for the input. So what about passing on the lead to an end buyer?

Dustin Allen · Answer

@Lue Blackwell

In CA, this is only legal if it is incidental. For example, your relative or friend wants to sell and you let an agent know. They could pay you a finders fee. If your business is generating these leads and selling them to agents, you are required to be licensed.  I’m sure there’s a lot of gray area in there but that’s the way I understand California’s “finders fee” rules.

Question About Lead & Realtor Finder's Fee?

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