Finder's Fee

hi freeindeed,listen if you go to the forms and documents section,you will see a form for a assignment.finders fees are a lil different,so you get the RE under contract with assigns written in,with this 1 from dean`s site it`s there already.then you sell the contract to the buyer.if you live in a state the assigns are illegal,you may have to do a double close,just make sure your buyer is for real,at the closure you take. title and then sell it to the buyer,simple huh,and I have still yet to do a deal.but I have to knowhow.like that`s going to put money in my account,hahahaha,anyway sistreat has a really good link for a company that do double close,and never mind asking questions,the ppl on here are really helpful.
good luck and so get them,grandpa

As with most fees, it should be based on the value given. This means that you need to give an investor something of value, such as lots of information about the property that can be bought, that will save the investor time and effort. The price it can be bought for should also be a bargain price, for whatever reason: seller is under duress, doesn't know the property's real value, or any other reason. An exception is when an investor has a specific need for a certain type or location of property; then he may be willing to pay full value.

The best way to deal with earning a finder's fee is to find out what sort of properties various investors are interested in buying, and then search for the properties using various sources. You need to get familiar enough with real estate so you can recognize a good deal, so the investor has enough of a potential profit at purchase to pay you some of it. Part of determining a good deal is getting pertinent details about the property, even a report of a walk-through, so the investor (or you, later) can see that it is a good deal. Lots of listings are priced too high, and only a few may be bargains. You need to be able to recognize those. Foreclosures and FSBOs (For Sale By Owner) are good places to start.

Of course, some way of agreeing on a fee needs to be worked out in advance, whether it is a % or flat fee, or it could vary based on how good a deal it is. A written agreement should be entered into, and proof of what information is given to the investor, in order to make sure you get paid, usually at closing of the deal.

Good luck in your endeavors. Don't get discouraged, keep learning, and you can succeed.

cactusbob

Let's say I find a great house, negotiate with the owner and get it for a good deal. ( Simple scenario)Find investor.

Lock in house with owner?
How do I present info. to investor?
When do I present finder's fee?
Do I give him enough info. on house to get him interested, then mention finders fee for the rest of the deal (address, owner etc...)?

What should finder's fee contract say?

I know I have allot of questions. I just don't want to get ripped off my finder's fee after I do all of the research.

Would 1% of the price of the retail value of house be an acceptable finder's fee?

If you lock in the contract yourself, then YOU say what the finders' fee is. Provided it's reasonable of coure. Basically, it's the difference between what YOU agreed with the seller and the fair market value. Example: You got it under contract for $132,500, it's appraised @ $150,000 so your fee could be anywhere in between, depending on what kind of value you want to offer your buyer. Assigning and finder's fee are two seperate methods to making money. (You control the property and decide what you get paid on the Assignment and the investor decides what to pay you on the finder's fee.)
So if you just 'find' the house and then turn it onto an invester, then HE says what he'll pay you for bringing it to him. By the way, he will only pay you if he closes on it. I hope this clarifies it for you.

How can I find out if a finder's fee is illegal in New Jersey? I presently have no money to invest in properties of my own so I feel that finder's fees are one way for me to build capital. I cannot do a double closing because I have no money or credit so if I am going to do this I need to do it as a transfer and receive a Finder's fee. I first want to find out if it is legal before I continue.

Does anyone know how I could find that out?

NO, their NOT illegal, you just need to word everything right, ex. when your about to close @ the title company, instead of trying to get paid as a "finder fee"(which just looks fishy) you would list yourself as an expense to be paid.

As for a "double closing", you can still do a "double closing" with no money, it's all in the way you structure the deal, meaning, have the seller pay for closing costs(include in your offer) that way if your offer is accepted you know that a "double close" is an option.

How do I list myself as a expense to be paid? Ex. I have a signed agreement of sale that has been transferred to an investor through assignment of contract, where does expense to be paid come in at?

I am trying to absorb this whole concept of making money through finder's fee. I am not fully understanding the legal mumbo jumbo. Trying though

everything stays the same until, like i said, you go to close. The expense dosen't come in until your closing @ the TITLE COMPANY(when your getting paid)

It should be on the assignment contract what the amount you are making is, it's not an expense it's listed as an assignment fee or should be. I know this is a little late, but I hope things went well with your closing and you made a good chunk of cashola!

God bless,