BirdDogs - Paid by who?

Question

Discussion question:

My partner and I have a short sale signed over to us (all the information and homeowner info needed) . We then introduced the deal to a few people. One of them was a birddog. This birddog said that he gets paid $10,000 for deals. We took that to mean that the investor will pay him $10,000 for him bringing us to the investor. Now that the deal is being worked out and his investor (who said that he will take care of him) wants to close on everything; the birddog now says that we also owe him $10,000.

Now I've been involved with RE for 10+ and have not as much experience with short sales, but somehow this doesn't sound right?

I have reached a conclusion because I've already asked 2 investors and 2 birddogs that are familiar with short sales and they both said that a birddog (them in the case of the birddogs I asked) usually gets paid from the investor he is bringing the deal to. This payment is either by percentage or fee.

I wanted to ask people on this forum what their take on this is?

Chaim F. · Answer

@Ianthe H.

@Nathan W. is right, you don't owe him anything, his job is working with investors. If you want to keep a relationship with him in the future, I would suggest you try to work out some sort of finders fee that both should be happy with.

Good luck!

Nathan W. · Answer

You should pay him $10k (letting him take home $20k for acting as an unlicensed agent)....

You know, if you hate money....

If you are like me and like money, and what you said is accurate (That there was a verbal agreement that the birddog is being taken care of by the investor, which is how birddogs are typically paid) then I would not think twice about completing the deal and letting him be paid his $10k by the investor, as agreed.  He is trying to take advantage of you and work you over for whatever reason.

I am frankly surprised that someone would think otherwise....

Darrell Shepherd · Answer

Yeah, he's definitely acting as an unlicensed agent first of all.  Second of all, traditionally a bird dog works for the investor BUYING the property and is paid by him.  Third, what kind of purchase price warrants a $10k bird dog fee?  That's a lot for a bird dog in my opinion.

Ianthe H. · Answer

@Curt In the real estate agent world you are right both parties would have to pay, except he is not an agent. At the meeting with both the birddog and the investor, before the investor made the offer; my partner asked who will take care of the birddog and the investor said "don't worry about him, I'll take care of him". The birddog is saying that the investor meant that what the birddog gets paid is irrelevant to us. After speaking with the investor, he edified that he is paying him $10,000 because this is what he normally pays him to bring him short sales. If the birddog said upfront (or even at the table) that we would have to pay him. We wouldn't have even considered this deal. As you know a short sale in Brooklyn is like finding gold. There was more than one person jumping at this deal. To also make it even more unconventional, the birddog waited a day before the final paper work, after we spoke more than a couple of times that btw you will owe me $10,000; others charge $50k per side, this is how it's done, etc...

We have no problem even paying a finders fee but $10,000 let's be real. No paperwork was signed so we are even thinking about not doing the deal with the investor and taking our short sale elsewhere. But with that idea, we would not only be losing a relationship with a unconventional birddog but losing a relationship with an investor.

Curt Davis · Answer

You are in a situation here bc what you should have done on the front end was clarify who he is being paid by.  You cant blame a guy for trying to double dip and get paid by both sides.

So to understand, the bird dog brought a buyer to purchase a short sale from you correct?  If that is the case I would think that you own him the fee as in my experience, whenever affiliates have brought us a buyer we have to pay the affiliate.

Since the bird dog is not a licensed agent and if you have no written agreement then I guess technically you dont have to pay them a fee but that would be the wrong thing to do. Tough call.

Good luck

BirdDogs - Paid by who?

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