Intermediary / Locator Fees

[Dennis K Tacason]

First of all, thank you for taking the time to read this.

I would like to know what I am getting into regarding considerations. I am not an RE Agent, Broker or do I say/imply that I am. I currently have deals pending with substancial amounts to be received.

I introduce the parties and step back to let it take its course. I do sometimes write up consideration agreements and thats the extent. I do not write up purchase agreements or negotiate terms.

I do have a registered C Corp in which payment would be received. Any enlightenment is greatly appreciated.

[Jim FL]

First of all, thank you for taking the time to read this.

I would like to know what I am getting into regarding considerations. I am not an RE Agent, Broker or do I say/imply that I am. I currently have deals pending with substancial amounts to be received.

I introduce the parties and step back to let it take its course. I do sometimes write up consideration agreements and thats the extent. I do not write up purchase agreements or negotiate terms.

I do have a registered C Corp in which payment would be received. Any enlightenment is greatly appreciated.


Dennis,
To act as a broker, without having a brokers license, or that of an agent who works for a broker, is illegal.
To act as a broker, you would need to bring two parties together, for the purpose of conducting a transaction, for a fee.
Based on what you posted here, it seems this is the case.

So, I'd suggest changing what you are doing, and changing fast.
If you want to simply be a locator for investors, then locate properties, gather seller info, and pass it on to the investor.
AFTER the investor makes a deal, they throw you a fee, as a gift for the research.
this can also be considered brokering by the way, but its somewhat cleaner.
The obvious key there, is to work with investors you trust.

Now, the BEST way to work this, would be to simply find GREAT deals, tie them up in a contract, or option, then assign that agreement to an end buyer.
This way, you are a principal to the transaction, and are selling your interest, not brokering.

Be careful, and do it right.
There are plenty of ways to make money in RE, legally,..........to mess with anything else, is just silly........IMHO.

HTH,
Jim FL

[Dennis K Tacason]

Thanks Jim,

I do understand the concept of putting them under contract. 6-8 figures is a large emd in which I am not able to do. Once these deals go through, I wouldn't have an issue with that.

"AFTER the investor makes a deal, they throw you a fee, as a gift for the research. This can also be considered brokering by the way, but its somewhat cleaner".

Now will everything coming out of escrow be a red flagged? I understand what you are saying. I understand I am walking the thin line also. When lawyers and others are structuring the transaction, to where I am no longer involved, am I still considered part of the transaction regardless what my position is? I take it that a every State will have their own ramifications.

I thank you once again for your input.

[joe]

you're a consultant

[Jim FL]

Thanks Jim,

I do understand the concept of putting them under contract. 6-8 figures is a large emd in which I am not able to do. Once these deals go through, I wouldn't have an issue with that.

"AFTER the investor makes a deal, they throw you a fee, as a gift for the research. This can also be considered brokering by the way, but its somewhat cleaner".

Now will everything coming out of escrow be a red flagged? I understand what you are saying. I understand I am walking the thin line also. When lawyers and others are structuring the transaction, to where I am no longer involved, am I still considered part of the transaction regardless what my position is? I take it that a every State will have their own ramifications.

I thank you once again for your input.

Dennis,
Like Joe said, in this case, you are a consultant, and therefore, should get some sort of compensation agreement in writing, with your investor (the buyer).
Whether or not this is included in the closing statement, and escrow disbursement, would be up to the attny who sets up the close.
I rather doubt frankly, that it would be.
More likely, your agreement from the investor, would need to be honored outside of close, but contingent on the deal closing.

Just my thoughts,
Jim FL