Are FINDERS FEE's a Turnoff?

Hi Renae:
I went through the same thing so here's a couple of suggestions:
When discussing numbers with your buyers, include your fee in the grand total you tell them. (ie: you have a prop for 60K and you want to make 3K for your fee, tell the buyer the prop is 63K) If they like the number, they won't mind your fee. (Hint#1- Don't be a pig with your fee. A little bit of something is better than a whole lot of nothing. You have to base your fee by what the market allows.)

Option #2 is to do an assignment of contract so that the buyer knows they are getting a prop you have under contract but it will cost them $xxx.xx ASSIGNMENT fee (not a finder's fee.)

Option #3- Discuss a bird dog fee with your buyers prior to giving them any property info. They might think you're asking too much for your fee which is why they're running for the hills.

Hope this helps

Andy Sager
DG's AndyS

I can try doing those options, but my question for Option 1 would be.... what If I state my asking price (which includes my fee), and I give them the address.... can't they still go around me, since I don't have this deal on contract?

And for Option #3 - after I get a hit on my "lead" I've been putting it out there to see if they are willing to pay a Bird Dog (or FINDERS FEE) and that is when they disapper. I'm basically asking THEM for what they would be willing to pay - not being greedy, and open for suggestions.

I'm not looking to get rich or ask for too much on any deal - heck, I'd be happy with $500.... LOL

I guess maybe I'm just not approaching it right, or needing to step out on Faith that I will not get worked OUT of the deal.

In your experience, have you been able to work something out with the "Seller" that if you give them the name of your lead, that they make sure to address my FINDERS FEE in the deal?

Hi:
Before I explain how I would do this, I just need to say that I am not an attorney and this should not be taken as legal advice. (a.k.a. The fine print. Thanks Bill Pohl )

Now, let's break this down:
If your buyer is okay with your price that includes your fee, get a contract with the seller where you sign your name "Me( your name) and/ or assigns." This enables you to assign your rights to the contract. (Make sure your title company/attorney prepares a contract that applies to your state for you to use.)It is best to let the seller know that you PLAN on fulfilling the contract but have backups just in case you can't (this is the reason for and or assigns). This should reassure the seller that somebody is going to be buying their property for the price you agreed upon. You should also inform the seller that should you assign your rights, the BUYER will be paying you your fee so the seller doesn't lose anything by you doing this.( Make sure that the seller doesn't have a problem with this action. If you have explained to the seller that you are an investor and not an agent, they shouldn't have a problem with you doing this. If they don't like you making any money on the deal, explain that this is what you do so you won't be able to help them. Before you kill the deal, remind them that they would be paying a realtor a commission as the seller anyway. Your fee (that the buyer is paying not them)would be less than an agent's commission.) Once you have the house under contract, it doesn't matter if you give your buyer the address because you have the house under contract and they can't do anything while your contract is valid. You could also try get your buyers to sign a blanket "Non- Circumvent" contract stated that they agree to pay you a fee of at least $xxx for any properties you give them information on. (While this is possible, I don't know of many investors who have signed this kind of "Blanket" agreement.)

Now, I'm sure you're asking "How do I get the buyer without giving the address?" I suggest you deal with the seller and just tell the potential buyer the numbers only: ie. "I have a house in this area (one that your buyer said they wanted houses in) that is XX sq ft, XBeds, X baths , needs $x repairs, etc. and has a FMV of $XXX. I can get you this house for $XXX ( your agreed amount with the seller + your fee.)" You can try to do this before you get the house under contract but I would wait and get the contract first. Your escape clause gets you out of the contract if it falls apart. If the buyer pushes you for the address and you don't have the blanket "Non- Circumvent" agreement, tell the buyer you will be sending over a Non-Circumvent agreement and you will give them the address once he/she signs and returns it.

For option#3- if you don't have a blanket "Non-Circumvent" agreement with your buyers, you do one for each address that you give them before you give out any info. Make sure you keep good records of what you give to who so should your buyer try to screw you, you have records with their (your buyer's) signature regarding that property. It then becomes a legal matter. Keep in mind that if your buyer tries to screw you, they are not buyer's you really want to be working with in the future. The good money men know this so they don't try to screw you.

I hope this explains everything. If you have more questions, you can PM me your phone number and we can talk more.

Andy Sager
DG's AndyS

Hi,

I ran into the same issue when trying to market properties for a finder's fee and bird dogging as well. I tried to have that good will faith that the investors will not screw you, but it did not work for me. It sent me a message that when you go that route, the investor thinks, "newbie and I have a freebie". When you go that route you have nothing to fall back on, so I would advise anyone against it. This is a business and you must have a business mentally or it will take you longer to fulfill your goals. I should know, because I am still working on it... You must have some type of supporting documentation with the investor's signature stating your agreement and at least that will make those less true investors think twice before trying to be greedy. You also must keep your faith there are good investors out there and you will run across several bad ones before you find the good ones. That is one of the things that keeps me going through it all and I have faith that I am meant to have a better life. Please believe me, I've been out of work for going on 2 years now and still am chipping away at making a better life for myself and my family.

Hang in there and keep moving forward.

I was wondering this same thing today, but I see it has already been posted. Good information. Can anyone who is a birddog tell me if the more seasoned buyers that hire birddogs usually have their own agreement, or should I present them with one?

Always try to be ahead of the game. You'll look more professional if you come equipped with your own paperwork. This puts you in control.

Hope this helps...

Andy Sager
DG's AndyS

my partner and i are newbies also and have looked at numerous properties in our area and have found a few that are good prospects but most are already under contract or in bad locations. i am working hard at trying to find cash buyers. just checked with re agent and she is going to send me a list of cash sales that have closed in the last two months so hopefully ther will be some leads from this list. i am going to purchase some signs and put up these bandit signs in some high traffic areas hopping to generate leads from these.

Andy, Thank you for the advice. I was planning to have my paperwork with me, but wondered about seasoned buyers wishing to or insisting on using their paperwork. What if it has a lot of legalese? Not wanting to pay for an attorney right now. I guess that is inevitable, so how to go about getting an affordable Real estate attorney.

You don't want a real affordable attorney. You want a good/ great attorney on your team because they are going to keep you out of trouble.
The best thing I can suggest is to call RE attorneys and tell the receptionist you are looking for a RE attorney to add to your team. Ask what the attorney's fees are and if they charge for a first time consultation visit as you have some questions you need to ask to see if the attorney is a good fit for your team. (Refer to Greg Murphy's mentoring videos on what questions to ask the attorney/ title company.) Once again, be in control of the conversation.

As for if the buyer has too much legaleze that you don't understand in their agreement, tell them (politely) that if they prefer to use their own agreement,you have no problem with it but you'll have to show their paperwork to your attorney first just to make sure you are both on the same page. Don't be surprised if they want to do the same thing with yours which should be fine with you. They could be bluffing or just trying to give you a hard time. I always try to make light of things like that saying something funny and telling them not to take it personally. One story I've told was how my lawyer friend played a joke on me and had me sign an agreement that turned out had made me legally responsible to pay for a fishing trip I had half jokingly promised him. Good thing he's my "FRIEND" LOL Since I held up my end of that deal, now I always make him read anything legal before I sign it. PAYBACK!!! LOL The good buyers will understand. The questionable buyers will be annoyed and they are probably the ones who were gonna screw you anyway so who cares if they walk. Always protect your ass...ets

Once again, I am not a lawyer and nothing I say should be taken as legal advice but this is how I would handle both these situations.

Andy Sager
DG's AndyS

Very Good advice above AndyS! Thanks, I appreciate it!

Renae