Buyers premium

[Golflover 0]

I was thinking while working with a friend thats a realtor/auctioner. He did a regular auction where he sold a property because the owners died and the family wanted it sold quickly. My friend charges a 10% premium up front, then they can either go out and finance it or he helps them find financing.

 

However, i was thinking...i've been in touch with two builders that are interested in the L/P concept, however, the one is new and he would like to get some cash under his belt, plus he wants to show his lenders that he has one sold, this way they will give him a loan to proceed with the next project.

 

If i were to do the 5 day auction or say two week auction, could i charge a 10% premium and get out of the deal?

[MichaelC 160]

Golflover, I'm not sure what you mean by an upfront "premium". Who pays it to you, and why? Are you suggesting you would find a property, and then charge the homeowner a 10% fee to market it and attempt to auction it? I don't know for sure, but I have to think you would need some kind of license to do this. Sounds to me like you are brokering real estate. Or am I off base here?

[Golflover 0]

Thats what i was wondering, if it was brokering or not. What i was thinking of is, i post 10% buyer premium signs all over the house, have buyers come in and check the place out, then start the auction.

 

For example, say the end of the auction a house has a price of $100k. Before they leave they cut a check for $10k (10%) and then they find the financing within 30 days. So, i get paid and im out of the deal, the home owner gets a quick sale...so its a win/win situation. Im just not sure if thats considered brokering or if i needed a license?

[MichaelC 160]

Seems to me you are walking a fine line, and one I wouldn't recommend you cross. Why not play if safe and lock in your price with a Pure Option? Now, you're a principal in the deal and can move and shake as you see fit.