How do we pay people who help us close the deal?

Question

Hello, My partner and I need help figuring out how much to pay this person. Here's what happened, she answered the call, negotiated the deal, we bought the property @ $160,000, we'll be keeping it as a rental. How much do we pay her for picking up the call and negotiating the deal?

Matthew Paul · Answer

Its your Mother , stroke her a check for $ 25,000 she wiped your butt , put on your band aids and made your meals .

Owen Dashner · Answer

Was your mom expecting anything out of it in the first place? Is this going to be a regular activity for her, or just a one off thing? How much equity did you capture with the purchase? The answers to those questions might paint a better picture on what is the correct amount... My first thought was $5K based on the limited information.

Gary Lucido · Answer

I agree with @Justin. Maybe $125/ hour.

Christopher Phillips · Answer

@Ashley Victor

Who was this person? A wholesaler? A broker? A transaction broker? A third-party that just put you two together?

Account Closed · Answer

I think you should base your decision based on the amount of hours she put negotiating the deal and perhaps how satisfied you are with the amount of equity your getting from the deal. If just making a few calls, I would say she was more of a "deal finder". But if she put in a decent amount of hours, followed up consistently with the seller and got you a better deal than you had anticipated, then she probably deserve a decent commission. Keep in mind, I'm using the commission term loosely. In most states it would be illegal to receive money for brokering services without having a license.

Ashley Victor · Answer

After all costs equity in the property is 105k, I can make it an ongoing thing. I really would like to establish a flat rate. If I were to consider hourly pay then I would also have to pay for the endless hours of tire kickers. Seems like 5k per closed deal should be it, at the end of the day the job remains the same whether we purchase a 30k property or a 300k property so percentages wouldn't work all the time. Thanks everyone I really appreciate the input. Continued success to all!

Harrison Smith · Answer

@Ashley Victor I would pay her like a buyer's agent since she basically represented you, negotiated the deal, and got you to closing on a property. Most buyer's agents are making 2-3% of the acquisition price, so pay her $3,200 - $4,800 and move on to the next deal.

Sam C. · Answer

A percentage of the rent each year rented and same percentage as in the past when sold.

How do we pay people who help us close the deal?

How do we pay people who help us close the deal?

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