How can I determine a legitimate 3rd party to a fake one?

Question

Greetings BP Brothers and Sisters,

I am having a hell of a time working with a 3rd party who is representing a pair of investors, who in turn both have different real estate interests. It's really getting to the point where I think he is absolutely full of you know what... but then again he also sounds really young, so I don't want to discourage him from doing what he's doing. But he has zero tact, no social graces and is flippantly going back and forth with what is a priority or not.

First and foremost, is it popular for investors to use 3rd parties off the bat? I suppose this would be most common, since investors are out doing whatever and don't have the time or inclinations to be talking with a Realtor, property managers, builders, etc.just give them the figures, the return percentage and be done with it.

However, The 3rd party I'm speaking with is doing zero follow up or looking into the details of what I'm sending him. As a Realtor I can only get out so much information with the rest being left up to him to crunch the finer numbers and so forth. I really feel as if he's just using us for our MLS access to spot a potential deal and then in turn without signing any agreements to work with us can find a discounter or a buddy with a license to write up any deals. As a 3rd party he is collecting the money from the investors and so in turn he's the only one party to the contract and will have to pay any ROI dividends out of his own pocket. If you're a third party doing this I'm assuming you would be out and about talking to people, finding that to be more valuable to barking out orders.

This guy I'm working with is in a completely different MLS system than us, we're out of town. why use us to find property via public domain in lieu of getting a Realtor in that same MLS to give you the specifics? I'm thinking he's already burned the bridges locally, or he really doesn't know what the hell he's doing... any feedback or help would be greatly appreciated! thank you!

Account Closed · Answer

The "3rd party buyer" thing seems to be getting out of hand. I get people calling me on my direct and print advertising now, assuming I'm not the buyer (or the seller). They refer to my investors (I don't have any) and my clients (again, I don't have any).

Putting the 3rd party thing aside, why put up with someone with zero tact and no social graces. That kind of patience is for the customers who close deals. :)

Michael D'Egidio · Answer

I've tried getting to who he was representing, he's not budging, which only makes me think it's a crock all the more. but there's no other way he'd be looking at being on the line for these properties he's looking for without someone backing him up with coin. I'm giving him one last search on possible fix and flip deals and see where he spins next. But I believe the game is going to be ended soon.

James Wise · Answer

@Michael D'Egidio this guy sounds like a time waster to me. I'd drop him

Michael D'Egidio · Answer

Hi Ned!

This third party is representing buyers for sure, he is not an agent, no credentials of any sorts. The only thing he has on himself is an LLC. He says his buying contracts are through the investors and they have the agreements written up between them about fees, payments, etc. New Mexico is very lax on contract law so anything written on paper can count in court. Ever since I brought this up to him this morning, the tune has changed now. Apparently the investor went and moved on something else and now he wants to do a fix and flip deal and wants to close on a subject by the end of the month. we'll see what happens. at least now I'm not needed to waste time or money on travel, and he's in my neck of woods where he wants to purchase the properties, but eventually the cards are going to have to be out on the table, and when they do I'm going to expose this piece of work to the world.

Ned Carey · Answer

@Michael D'Egidio this third party are they representing sellers or buyers? It sounds like they are representing buyers.

Well are they agents? If not they are, they are not legitimate. It sounds like they are acting as brokers without a license, and that is illegal in most if not all states.

There is nothing wrong with a middleman who knows enough about the business to sign his own name on the deal. But someone who doesn't know exactly what he or his ultimate end buyers wants, and is hoping to have everything locked down so he has no risk, is a waste of everyones time.

Michael D'Egidio · Answer

I got you. yea, that's exactly what it sounds like. he's sending the guy contractual numbers with a ton of figures in the air. Based off the properties I'm sending him, the investor wants a medical or commercial building with tenants paying rent. how ideal and quaint. however he's getting upset now because everything I'm sending him is vacant. the spaces are lovely, but when leases are over, and the owner doesn't feel like chasing another lease, or the property value has increased enough to turn it over to another, then so be it. but don't get upset with me because we're stuck using public domain for "hot deals" you're right, I might as well be throwing him junk from craigslist.

Wayne Brooks · Answer

I'm guessing your instincts are good. Most investors don't "use" 3rd parties/bird dogs, etc., it's more of a "if you send me something I like, I'll look at it". I'd give the guy a choice: Make whatever fee agreement you want with your investors, but I either deal direct with them, or hit the bricks. He may just be peddling it anyway, to his "buyers list" he generated off CL.

How can I determine a legitimate 3rd party to a fake one?

How can I determine a legitimate 3rd party to a fake one?

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