Cold Caller's Role in Closing Documents for Wholesaling Deals

Miami, Florida
Wholesaling
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Cold Caller's Role in Closing Documents for Wholesaling Deals

Samuel Santos Borges
Investor · Miami · Member since 2023 · 11 posts · 4 votes

Hi everyone,

I'm in the process of scaling my wholesaling business and am exploring the idea of hiring someone to not just make cold calls, but to also play a crucial role in finding properties and securing buyers. This person would essentially be instrumental in putting the entire deal together.

Given the significant role this individual would play, I'm curious about how their involvement is typically reflected in the closing documents, if at all. Specifically, I'm wondering:

Does the person responsible for finding the house and buyer need to be explicitly mentioned in any of the closing documents?

What legal considerations should I keep in mind when formalizing their role in the deal-making process?

Are there any standard practices for acknowledging their contribution in the transaction, or any recommended ways to structure this working relationship to ensure it's beneficial and compliant for all parties involved?

I would greatly appreciate hearing from anyone with experience in this area, whether it's legal advice, personal experiences, or any insights on how to navigate this aspect of wholesaling effectively.

Thanks in advance for your help!

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  • Bryant Brislin
    Title Representative · Irvine, CA · Member since 2017 · 874 posts · 519 votes
    2y

    This really confusing the way it's written, but typically you would have a commission agreement between you and the closer.  As far as the actual property, the contract would show your entity as the buyer and eventually you would assign the contract to whoever the ultimate buyer is.  People that work for you as a closer usually wouldn't have their name anywhere on the contract, etc, you are just paying them based upon your commission agreement with them.  

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  • David Ramirez
    Investor · Tampa, FL · Member since 2019 · 1k+ posts · 1k+ votes
    2y

    They won't need to appear in any paperwork because they would be working on behalf of your entity. As @Bryant Brislin said, the only name that should appear in the closing documents is your entity's name as the assignor. How they get paid depends on how you want to structure it. If you want them to be paid out of the transaction, they would have to be licensed to receive their commission. If they are not licensed, you could offer them a salary and then pay them commissions based on revenue.

    I recommend speaking with a real estate attorney in your state to clarify any uncertainties.

    1Reply
  • Samuel Santos Borges
    OP
    Investor · Miami · Member since 2023 · 11 posts · 4 votes
    2y
    Quote from @Bryant Brislin:

    This really confusing the way it's written, but typically you would have a commission agreement between you and the closer.  As far as the actual property, the contract would show your entity as the buyer and eventually you would assign the contract to whoever the ultimate buyer is.  People that work for you as a closer usually wouldn't have their name anywhere on the contract, etc, you are just paying them based upon your commission agreement with them.  

    Got it! Thank you for the response, trying to figure everything out as I go. 
    0Reply
  • Samuel Santos Borges
    OP
    Investor · Miami · Member since 2023 · 11 posts · 4 votes
    2y
    Quote from @David Ramirez:

    They won't need to appear in any paperwork because they would be working on behalf of your entity. As @Bryant Brislin said, the only name that should appear in the closing documents is your entity's name as the assignor. How they get paid depends on how you want to structure it. If you want them to be paid out of the transaction, they would have to be licensed to receive their commission. If they are not licensed, you could offer them a salary and then pay them commissions based on revenue.

    I recommend speaking with a real estate attorney in your state to clarify any uncertainties.


     Got it, thank you for the help! Will be reaching out to some real estate attorneys in my area. 

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