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Old 03-27-2009, 11:57 AM
 
2 posts, read 11,473 times
Reputation: 13

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I have brought in a real estate agent to a development group for the purpose of locating and presenting properties for potential purchase and subsequent development and ultimate sales for profit of finished residential properties/homes. I have known this agent for quite some time and feel there exists a mutual trust between us. I might realize some financial benefits as a result of the potential development as I am a sub contractor with a good relationship with the primary contractor for the development group and stand a good chance of performing much of the construction work. I have however learned through life that all is not as it appears in most cases and at my age, I will not have many more opportunities to benefit enough financially from business ventures to ensure future security. I have been instrumental in making this agent almost the exclusive agent for the group for purposes of the raw property purchases in the beginning as well as the exclusive agent for future sales of these extremely high end properties once completed. Understandably, this agent stands to make a very considerable amount of money on the purchases as well as the ultimate sales. I have proposed that for any purchases that are completed through them, I will receive a 1 % referral fee to be paid once the escrows are completed and close. This fee was based upon the 5% to 6% amount of total real estate commissions payed out on these transactions. I have now found that some listing yield as much as 10% commissions which has prompted me to possibly renegotiate the referral to a 20% of commission figure but no less than 1%. My concern is if a written contract could be drawn up that is legal and binding between the realtor and myself that would/could protect me. The realtor has agreed to a 1 % figure to be paid at close of escrow but I do need to have it put into writing in an enforceable format . Can this be done? Is there a boiler plated agreement that I should consider? Any and all help would be more than appreciated. Our hopes and prayers are high that these purchase transactions happen and the development also happens and of course is successful for all. We feel that we are simply sharing in the profits from the purchases with the realtors involved at no additional cost to the purchasers/developers whatsoever. In return, I will do everything possible to include my realtor in as much of the purchase/sales transactions as possible.
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Old 03-28-2009, 10:09 AM
 
1,319 posts, read 3,954,632 times
Reputation: 1140
Consult an attorney. I did not think it is legal for a real estate agent to provide a finders fee(or whatever you want to call it) to someone who is not an attorney or does not have a real estate license.
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Old 03-28-2009, 11:44 AM
 
Location: Pomona
1,955 posts, read 10,347,006 times
Reputation: 1555
Such referral fees can be legally structured, but definitely consult an attorney. Done improperly, it could mean both you and your agent getting nothing except headaches and lawsuits.
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Old 03-30-2009, 09:52 PM
 
2 posts, read 11,473 times
Reputation: 13
Hopefully there is a way to do it legally. It would be a real shame if the only way to do it legally is if I was an attorney or a real estate agent. Why on earth would being an attorney make it legal? If a real estate agent decides to share his/her commissions with an outside entity that was responsible for his/her involvement in the transaction, why would it be illegal? I dont even see why it could be considered unethical let alone illegal. At 2 1/2 percent of sales and at 100 million dollars total sales, 2.5 million dollars is a whole lot of money to have earned without sharing with someone that was solely instrumental in bringing them into the transactions. Looks like seeking legal advice to draw up the agreement is the only way to do it and I will certainly do that to keep it in line...................But to hear that being an attorney alone might make it legal is quite disappointing! Could it be that some laws are written to make the rich richer and the poor poorer??????........................I say off with their heads
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Old 03-30-2009, 11:54 PM
 
Location: Living on the Coast in Oxnard CA
16,290 posts, read 29,722,836 times
Reputation: 21809
I have known agents that offer a finders fee. If the party buys from the agent the person that sent them would recieve part of the deal. Not sure why it would be illegal. Your providing a service to the agent and this is work that the agent does not have to do. Kind of like paying you to do his work. Not sure why any of those people buying would even care one way or the other. They are not paying any more than they would if their were 1 agent, 20 agents, or an agent and you. As far as the referal fee, that is between you and them. I would get it in writing. You don't have a license to sell real estate I am assuming. You can always ask for more. Is the fee higher because the Realtor has more work to make the transaction happen? Who determined what the fee is? You need to make sure that your request compares similar events. If the Realtor is completing additional work or offering additional services to make the deal happen, then I would stick with the agreed upon number.
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