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Old 01-06-2009, 06:01 AM
 
Location: caribbean island
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I do not hold a real estate lic. in NC, or in any state for that matter.I am looking for a very particular type house in CLT and am not interested in MLS listings. So, I would like to pay(consulting fee, commission) to that somebody that leads me to the purchase of this property. If I report this transaction to IRS with a 1099 at the end of the year are there other state laws that I might be in violation off?
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Old 01-06-2009, 06:42 AM
 
Location: Cary, NC
19,701 posts, read 31,516,722 times
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Quote:
Originally Posted by johne482 View Post
I do not hold a real estate lic. in NC, or in any state for that matter.I am looking for a very particular type house in CLT and am not interested in MLS listings. So, I would like to pay(consulting fee, commission) to that somebody that leads me to the purchase of this property. If I report this transaction to IRS with a 1099 at the end of the year are there other state laws that I might be in violation off?
You are looking for a RE Bird Dog.

RE law in North Carolina doesn't care where you find the home, but says that you cannot pay a commission to an unlicensed party.
MLS entry is not relevant to that law.

But there are folks, mainly property investors and flippers, using bird dogs in North Carolina. You might ask your intended closing attorney how to work within the bounds of the law.

RESPA comes to mind immediately. If you are a cash buyer and no bank is involved, you will not face loan fraud allegations for paying a fee to a third party, I think it is safe to say.
But I repeat the suggestion to talk to your closing attorney for counsel to keep your nose clean.
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Old 01-06-2009, 01:45 PM
 
Location: Martinsville, NJ
5,930 posts, read 6,961,617 times
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Quote:
Originally Posted by johne482 View Post
I do not hold a real estate lic. in NC, or in any state for that matter.I am looking for a very particular type house in CLT and am not interested in MLS listings. So, I would like to pay(consulting fee, commission) to that somebody that leads me to the purchase of this property. If I report this transaction to IRS with a 1099 at the end of the year are there other state laws that I might be in violation off?
Yes, you can do this quite easily. You are looking for a buyers agent. Before you sign any agreement, interview a few agents. Let them know you want them to go out & FIND a property for you, even if it's not listed. In fact, you expect that it will not be listed. Work out whatever compensation agreement the two of you agree is fair. You will be paying that agents brokerage, which will in turn pay him according to whatever schedule & contract they have in place. No issues, no problems, no violations to worry about.
The bigger issue, of course, is finding a real estate agent who knows how to do this. Most don't, so be careful to be sure they know what you are looking for, and that it may take more work than most agents do to find a house for most of their clients. Which may (or may not, I guess) mean that you will need to either pay some sort of retainer or guaranteed fee, or perhaps a higher fee if it's a commission earned only when you close.
Yes, I have worked this way for a client in NJ. And ever since, I adddress the possibility with every buyer.
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Old 01-06-2009, 02:39 PM
 
Location: caribbean island
5,437 posts, read 5,177,968 times
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Quote:
Originally Posted by Bill Keegan View Post
Yes, you can do this quite easily. You are looking for a buyers agent. Before you sign any agreement, interview a few agents. Let them know you want them to go out & FIND a property for you, even if it's not listed. In fact, you expect that it will not be listed. Work out whatever compensation agreement the two of you agree is fair. You will be paying that agents brokerage, which will in turn pay him according to whatever schedule & contract they have in place. No issues, no problems, no violations to worry about.
The bigger issue, of course, is finding a real estate agent who knows how to do this. Most don't, so be careful to be sure they know what you are looking for, and that it may take more work than most agents do to find a house for most of their clients. Which may (or may not, I guess) mean that you will need to either pay some sort of retainer or guaranteed fee, or perhaps a higher fee if it's a commission earned only when you close.
Yes, I have worked this way for a client in NJ. And ever since, I adddress the possibility with every buyer.
Thank you for this information which makes sense. The real question is: Can I pay someone who does NOT hold a real estate lic?
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Old 01-06-2009, 02:45 PM
 
Location: Cary, NC
19,701 posts, read 31,516,722 times
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Quote:
Originally Posted by Bill Keegan View Post
Yes, you can do this quite easily. You are looking for a buyers agent. Before you sign any agreement, interview a few agents. Let them know you want them to go out & FIND a property for you, even if it's not listed. In fact, you expect that it will not be listed. Work out whatever compensation agreement the two of you agree is fair. You will be paying that agents brokerage, which will in turn pay him according to whatever schedule & contract they have in place. No issues, no problems, no violations to worry about.
The bigger issue, of course, is finding a real estate agent who knows how to do this. Most don't, so be careful to be sure they know what you are looking for, and that it may take more work than most agents do to find a house for most of their clients. Which may (or may not, I guess) mean that you will need to either pay some sort of retainer or guaranteed fee, or perhaps a higher fee if it's a commission earned only when you close.
Yes, I have worked this way for a client in NJ. And ever since, I adddress the possibility with every buyer.
Quote:
Originally Posted by johne482 View Post
Thank you for this information which makes sense. The real question is: Can I pay someone who does NOT hold a real estate lic?
I liked Bill's answer as much as, or more than mine, but I figured this is where you were headed with the Original Post.
I reiterate my advice.
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Old 01-06-2009, 03:07 PM
 
Location: Martinsville, NJ
5,930 posts, read 6,961,617 times
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Quote:
Originally Posted by johne482 View Post
Thank you for this information which makes sense. The real question is: Can I pay someone who does NOT hold a real estate lic?
Yeah, I have to go with Mike on this one. I believe it's illegal for anyone in any state to accept payment for real estate services if they are unlicensed.
HOWEVER...
I heard about, but cannot recall the details of at the moment, a case in NYC involving a guy who was promised a finders fee for introducing a buyer to the owner of a property. The seller & their agent later said they weren't going to pay the finders fee, as the recipient was unlicensed. The judge ordered the fee be paid.
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Old 01-13-2009, 05:07 PM
 
Location: Burlington VT
1,405 posts, read 3,322,483 times
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I believe you (the purchaser) can pay an unlicensed person a fee. But I'd simply take the good advice above and ask the REAL ESTATE Attorney you'll be using for the closing.

Finding somebody who's good at this, does it for a living, and has no license though...that's just a bit odd, ...but wdik...
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Old 01-14-2009, 02:42 PM
 
1,097 posts, read 2,492,385 times
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Quote:
Originally Posted by Bill Keegan View Post
Yeah, I have to go with Mike on this one. I believe it's illegal for anyone in any state to accept payment for real estate services if they are unlicensed.
HOWEVER...
I heard about, but cannot recall the details of at the moment, a case in NYC involving a guy who was promised a finders fee for introducing a buyer to the owner of a property. The seller & their agent later said they weren't going to pay the finders fee, as the recipient was unlicensed. The judge ordered the fee be paid.
In Indiana, last time I checked, you could pay a nonlicensed person to find a property or a buyer. That person cannot, however, act as an agent for either party or otherwise assist in the transaction, meaning that all the finder or bird dog can do is bring potential buyer and seller together, as opposed to a broker or agent who would represent one or both and assist them with the transaction itself. There's still a lot of gray area in what constitutes "real estate services," so there is some wiggle room here.
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Old 09-09-2009, 08:52 PM
 
4 posts, read 8,183 times
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Quote:
Originally Posted by Bill Keegan View Post
Yeah, I have to go with Mike on this one. I believe it's illegal for anyone in any state to accept payment for real estate services if they are unlicensed.
HOWEVER...
I heard about, but cannot recall the details of at the moment, a case in NYC involving a guy who was promised a finders fee for introducing a buyer to the owner of a property. The seller & their agent later said they weren't going to pay the finders fee, as the recipient was unlicensed. The judge ordered the fee be paid.
Any idea on the details of this case?
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Old 09-09-2009, 09:27 PM
 
Location: Hermoso y tranquilo Panamá
11,856 posts, read 5,665,201 times
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Quote:
Originally Posted by anonusr View Post
Any idea on the details of this case?
Why don't you just discuss with an attorney - you're on shaky ground my friend and better to be safe than sorry. Unless things have really changed since I practiced in the states, it was illegal to pay anyone a referral fee in conjunction with a real estate transaction unless they were licensed.

Spend a couple of dollars, get legal advice then you know whether or not what you want to do breaks any laws. Better to pay a small amount of money for a consultation, than a lot of money for a defense attorney and boy oh boy, do they love those billable hours. Take it from not only a former realtor in the states, but a paralegal for criminal and civil litagators.
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