Adam King (MI) 1 Report post Posted September 3, 2005 Rich,The "red light" thing isn't what I'm talking about. 2. Dual agent agreement with Realtor representing the seller and myself VERY illegal in Florida. It violates the fiduciary responsibilities you have with either of the parties. Totally LEGAL in MI for a Realtor to list a property AND bring the buyer but with total consent. And you're right; in FL they would have to act as a transaction broker to make anything nearly legit from the sense of what we're talking about. (Just read the FL laws. Ouch!) ALSO, (Back to an earlier subject) according to Florida law, it is ILLEGAL for a licensed broker or sales associate to pay an unlicensed person any sum of money for the referral of real estate business or for performing any real estate service unless specifically exempted. Couldn't agree more. Taking a referral fee from a Realtor could put them into the crosshairs. But controlling property and being paid for it is totally legal. I wouldn't take my "option or partnership" fee from the broker, I would take it from the seller or buyer. Regards,Adam Share this post Link to post Share on other sites
puls1234 0 Report post Posted September 4, 2005 Rich, I don't sign an agreement with my best friend the realtor. If he happens to sell the house before I do then after the closing he gives me money. After a closing he can do whatever the hell he wants to with his money. He could go to a bridge and throw it into the river if he is so inclined. Just wanted to clarify that! Pete Share this post Link to post Share on other sites
Gordon Holtner 0 Report post Posted September 4, 2005 Puls 1234 I suspected it is like that. If there were any restrictions on who a realtor could give their money too after closing it would kinda hard to buy groceries, clothes. Your best friend would be the naked realtor! Gordon Holtner Share this post Link to post Share on other sites
Sold ! 0 Report post Posted September 4, 2005 Totally LEGAL in MI for a Realtor to list a property AND bring the buyer but with total consent. And you're right; in FL they would have to act as a transaction broker to make anything nearly legit from the sense of what we're talking about. (Just read the FL laws. Ouch!)<{POST_SNAPBACK}> Well, it's legal to list and bring in a buyer here in FLA, too. And it is done as a "transaction brokerage" agreement (as opposed to a "single agent" agreement, for those of you listening in . "Single agent" has a fiduciary responsibility to only one of the parties and can't act as a "dual agent.") Full disclosure required up front. And, that's why 90% of ALL Real Estate activity in FLA is done as "transaction brokerage." Realtors are basically facilitating the transaction between the parties and not taking any sides. Regards, Share this post Link to post Share on other sites
Adam King (MI) 1 Report post Posted September 4, 2005 Cool stuff,I think this has been a good thread with some great points and some scary ones that probably need some attention. The moral of the story seems to be understanding your state laws and Realtor guidelines. It probably wouldn't hurt to understand your tax laws too while working with Realtors. This way you can get paid and take advantage of the process too. That makes me feel warm and fuzzy inside. I think the other point here is to also realize that we all probably could come up with a different take on this strategy. At least one that would fit our individual needs.Regards,AdamMan, I think I'm out of this discussion. My heads' spinning! Share this post Link to post Share on other sites
Sold ! 0 Report post Posted September 4, 2005 Well, it's legal to list and bring in a buyer here in FLA, too. And it is done as a "transaction brokerage" agreement (as opposed to a "single agent" agreement, for those of you listening in . "Single agent" has a fiduciary responsibility to only one of the parties and can't act as a "dual agent.") Full disclosure required up front. And, that's why 90% of ALL Real Estate activity in FLA is done as "transaction brokerage." Realtors are basically facilitating the transaction between the parties and not taking any sides.<{POST_SNAPBACK}> So, as I read this and think about it, how could a Realtor (broker or sales) Associate become an investor in Florida or eslewhere? Would he have to take himself completely out of the picture as a realtor to do the deal? Might he take an option himself and then try to sell it also on the MLS (with proper disclosure, of course)? MC, do you know anything about the rules in FLA concerning this? I dunno right now............. Share this post Link to post Share on other sites
MichaelC 160 Report post Posted September 5, 2005 Rich, a Realtor doing a deal for his own personal portfolio and investment must always disclose to the seller that they are a licensed Agent or Broker. Once that is done, he is free to wheel and deal with a homeowner just as you or I might do. As far as the option scenario you describe, I would think he could turn around and list his sale price, as long as that part of the deal does not affect his deal with the homeowner. Huh? Got that? But, truthfully, I'm speculating on this and can't say with certainty that this is correct. Share this post Link to post Share on other sites
JerseyJeff 0 Report post Posted September 5, 2005 Man, I think I'm out of this discussion. My heads' spinning!I'm not even in this discussion and my head is spinning. You guys lost me back at Well I have just partnered up on Pure Options Jeff Share this post Link to post Share on other sites
Adam King (MI) 1 Report post Posted September 5, 2005 Man, I think I'm out of this discussion. My heads' spinning! I'm not even in this discussion and my head is spinning. You guys lost me back at Well I have just partnered up on Pure Options Jeff That was great! I'm still laughing over here! Share this post Link to post Share on other sites
West Coast Girl 1 Report post Posted September 5, 2005 West Coast Girl Holy Jeez woman!! I'd hate to be the one to piss you off Hey Gordon, EVERYONE says that one to me. That's why they try not to (he, he, he) people how know me that is. Have you thought of doing consulting? Then you wouldn't have to deal with the greedy people in Vancouver. <{POST_SNAPBACK}> Yup! Just spoke two days ago with an Asian lady. I explained how the L/O works. She then says, but I still HAVE TO sell in two years? I said yes. She said, well what if the market goes up still. I explained to her that I would build in her appreciation. I said if it goes up 10%, I would give her 6% or more. It would depend on the whole picture of the deal. I couldn't give her concrete numbers over the phone without doing my research or seeing her house. She was also pulling numbers out of a hat of what she wanted as well ($500,000). I asked her how she came to that number and she said that this is what houses are selling for around there. She said, well, I'll let you find a tenant for me. But, if I find a tenant first, is that OK too then? I said sure. no probs. Why? 'cause I aint going to obviously be wasting anymore of my time with this seller. She obviously is not MOTIVATED to sell. She justs wants a tenant and by September 15th. See what I mean? They want to have their cake and eat it to. I just can't seem to win. They just don't seem to get it. So, just that's exactly what I'm trying to do ... consulting. It still isn't going too well for me at the moment! By the way, she found me on Craigslist. Oh, yah, baby. By the way I do agree with you that Asians and East Indians do stick a bit to their own kind but in alot of cases it is just easier for them to speak in their first language then go with their second third or maybe fourth which is English. plus having the same background puts people at ease.<{POST_SNAPBACK}> Naw, they just like wasting people's time .... mine and my Realtor's who is also my Partner by the way folks. I just got off the phone with an East Indian who told me that he NEEDED to sell because he was moving back East to Toronto or Ottawa. He just retired and wants to be near his family. Well, he has several properties for sale. My Realtor was at the office and started doing the research on the computer. First Property: Bad area. Worst in Surrey, BC. Wants $400,000. Was tax assessed at $260,000. He bought it two years ago for $198,000. Second Property: Not a great area. IT IS LISTED WITH A REALTOR (he told me it wasn't). He said he bought it May 4, 2005 for $84,000. He actually bought it for $62,600 (this was a foreclosure). He wants $98,000 (exactly 4 months after he purchased it). Third Property: Didn't bother. He's already way off with his numbers as you can see. Anyway, what else can I say? Actually, more (this was just the tip of the iceburg with this guy) but, hey, I don't want to bore you nice folks here any further with my rants! Cheers, WCG Share this post Link to post Share on other sites
Gordon Holtner 0 Report post Posted September 5, 2005 West Coast Girl Why don't you do like Bev does get the seller to get the comps recommend your realtor or get them to use valuwiz or for Bc I think landcor.com to see have them see what it is worth first tell them that you'll supply the contracts and a suggested price and on how to fill the forms in. This eliminates the argument on price or should and if they don't get back to you sc** them they lost out on someone who wanted to help them get a good price. Bring them back to reality first but make it seem like they did it all themselves. Gordon Holtner Share this post Link to post Share on other sites
rrk 0 Report post Posted June 20, 2006 Totally LEGAL in MI for a Realtor to list a property AND bring the buyer but with total consent. And you're right; in FL they would have to act as a transaction broker to make anything nearly legit from the sense of what we're talking about. (Just read the FL laws. Ouch!)<{POST_SNAPBACK}> Well, it's legal to list and bring in a buyer here in FLA, too. And it is done as a "transaction brokerage" agreement (as opposed to a "single agent" agreement, for those of you listening in . "Single agent" has a fiduciary responsibility to only one of the parties and can't act as a "dual agent.") Full disclosure required up front. And, that's why 90% of ALL Real Estate activity in FLA is done as "transaction brokerage." Realtors are basically facilitating the transaction between the parties and not taking any sides. Regards, This is very true in Florida. But the AdamKing's idea of utilizing realtor/associate/broker to list the property faster is fantastic. Just a thought after reading this far, if you originally (first) entered an option to purchase @ $150K, you record a Memorandum to put a cloud over title (this secures your interest in option agreement), then let your friend realtor list the property. When the realtor brings in buyer with Purchase Contract @ $200K, at closing realtor get his/her commission (6%) and the optionee's fee to cancel memorandum option which can be called as a consulting fee (being the difference between $188K and $150K). You do not need to have a "partnership" or any agreement with realtor friend. When you have no agreement with your realtor, you are not jeopardizing realtor's license. You are helping realtor to get paid and he/she is helping get paid. In addition, the property got sold faster which makes the seller happy. A WIN-WIN-WIN situation. CAVEAT: pay attention to the spread when letting the realtors list the property. ALso, make sure the listing agreement (I have not read one yet, but will do tomorrow) does not stipulate that the seller has current agreements (executed prior to listing agreement). This thread is indeed great and informative. Thanks Share this post Link to post Share on other sites
realestateremedies 0 Report post Posted June 22, 2006 Just for some clarification. Dual agency, here .... is legal and although I wouldnt say the norm, common never the less. Yes state to state law can differ but in the majority of the U.S. a LICENSED RE agent can NOT give anything of monetary value to an UNLICENSED individual for a REFFERRAL. Not the other way around, its perfectly fine for you to pay an agent anything you want, for what ever you want. Its the trasaction involving monetary value for a refferral from the agent TO the unlicensed person that is illegal .. again, for a refferral. I am an agent (Nebraska) and my primary focus is investing. Some of the tools being an agent offers me are fantastic, but crap(Pardon me) like the refferral fee stipulation really just, well .... lol - blows .... to put it bluntly Now, as far as the idea in this thread. WHAT A GREAT IDEA! Definately do-able I would think and Im sure youll get the green light from the higher "powers" that be when you discuss it with them. As long as you explain where the moneies are coming from. Explaining that the agent gets the commision off of the sale price upfront, the seller gets the agreed on option amount, and the remaining "consultation fee" is given to the investor to clear the cloud produced from the memo of option. Sounds good to me, but then again many that are licensed dont really have a clue what is ok and what is not. The majority will tell you its not ok if it even sounds fishy, rather than finding out what can and cant be done. Pushing the limits is something they arent comfortable with so if it sounds foreign they simply disregard it as illegal. Today I was calling FRBO's and ran across this gentleman that had a few rentals. I gave him my speal, early on asking if he had any interest in selling, and if so if he was familiar with lease options and so on .... After listening to everything he carefully asks if Im a realtor (many people do ask me that) and then my name ..... at which point a bell goes off in my head .... then he asks what broker I work for ... lol ... at this point I know what hes thinking. I tell him and he says Im an agent with CBS, "nice talking to you" and hangs up! LOL ... we will see what comes of this. So I call back and say "Hi Mr. uninformed, this is Ji again. From our previous conversation it seems to me you might have some questions or concerns about what Im doing here.", Mr. Uniformed: "No your fine" I respond "OK well I just thought Ild call back because Ild be happy to explain everything to you" He hangs up .... LOL Im betting 50/50 I get a call from my broker tomorrow. Which is not a problem, as I know Im well within my rights. All my paperwork clearly states that I am licensed and acting as principal, for my own benefit, in this transaction. Seller acknowledges that I am not representing him or any other parties, ect, ect. Plus, if I want to buy an investment property from a FSBO, and I want to buy that property on a lease purchase ... theres not any thing wrong with that, and if I want to sublet MY interest in the property ... thats ok too. This is what I will explain to my broker that is, assuming anything comes of this anyway Share this post Link to post Share on other sites
rrk 0 Report post Posted June 22, 2006 Sounds good to me, but then again many that are licensed dont really have a clue what is ok and what is not. The majority will tell you its not ok if it even sounds fishy, rather than finding out what can and cant be done. Pushing the limits is something they arent comfortable with so if it sounds foreign they simply disregard it as illegal. Just out of curiosity, are the RE agents/brokers supposed to know what is illegal and legal in handling real estate transactions. I am sure that when you took the State (License) Exam, there had to be some questions in this aspect. In addition, I am sure there are also "continuing education" courses that should include discussion of "illegal transactions". Having said that, the RE agent/broker should "know" the answer to the above quote by Ji Woslager. If not, consult with a RE attorney to confirm. I know there is a statute (law) in Florida (for sure) and in most states that specifically covers what a RE agent/broker can do and cannot do. I have already looked up for FLorida since I reside in FLorida. I am not an licensed attorney, so I cannot give advice or legal opinion. Sorry. Share this post Link to post Share on other sites
realestateremedies 0 Report post Posted June 22, 2006 Sounds good to me, but then again many that are licensed dont really have a clue what is ok and what is not. The majority will tell you its not ok if it even sounds fishy, rather than finding out what can and cant be done. Pushing the limits is something they arent comfortable with so if it sounds foreign they simply disregard it as illegal. Just out of curiosity, are the RE agents/brokers supposed to know what is illegal and legal in handling real estate transactions. I am sure that when you took the State (License) Exam, there had to be some questions in this aspect. In addition, I am sure there are also "continuing education" courses that should include discussion of "illegal transactions". Having said that, the RE agent/broker should "know" the answer to the above quote by Ji Woslager. If not, consult with a RE attorney to confirm. I know there is a statute (law) in Florida (for sure) and in most states that specifically covers what a RE agent/broker can do and cannot do. I have already looked up for FLorida since I reside in FLorida. I am not an licensed attorney, so I cannot give advice or legal opinion. Sorry. Well, to answer, sure they are. Anyone who is licensed SHOULD know what is and what isnt againts the real estate commisions regulations. Dont get me wrong, I have to consult with brokers or reffer to the RE commision myself at different times. Situations like Creative real estate transactions are not encountered very often during the workweek of most agents. Therefore what is and isnt OK can get a bit hazzy. During the state exam, there is a national portion of the test and a license law portion that covers everything. However, it may have been a long time ago when they took the exam. Continuing ed doesnt necessarily give agents the exposure they should get, especially with the multitude of possibilities that a person can encounter while working with CREI. People are constantly trying to come up with creative and new ways of doing things. Many agents are simply not aware that these things are legal. Maybe they read an article that had the words loan fraud, illegal, and flipping in the context so when they encounter a situation that resembles what they think they remember reading they get spooked and either outwardly label it as illegal, or just shy away from it in general as the penalties can be steep! Share this post Link to post Share on other sites
