OfflineI'm using a realtor because she has a large list of cash investors she works with. When I assign a contract to one of her investors what do I do about her commission? Add it to my fee and pay her or add it to the sale price? The property seller has agreed on a price with me so they shouldn't have the cost,right?
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When you submit an offer P&S agreement use her as the buying realtor that way when you assign that contract she will get the comission for that transaction.
Realtor commission is always paid by the seller of the property. You and the party you assign to are the buyer. When the seller signed the contract with the realtor, they agreed to a commission % in writing.
Wait - I've reread your post - are you saying you are finding properties that are not listed to assign and you are just getting investor names from the realtor? If the realtor does not list the property, there is no commission. There are laws your realtor should be aware of about accepting fees. Be careful.
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You are correct. However I am finding deals on my own and contracting the properties with the seller not paying a commission. My question is: after locking up the property I call the realtor that has cash investors. If I assign the property to her investor is it the my responsibility to pay her commission because on paper I am the seller to the investor? If so should I just add it to the sales price or what?
The smart thing to do is to develop your own list of buyers and don't use a realtor's list of buyers. This is what we coach our clients to do from the beginning. Create your own buyers list.
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In your case, the realtor is most likely the buyer's realtor (the buyers from her list) and should be getting her commission from them. If she was smart she would have a contract stating that.
Bringing properties to the realtor's buyers requires no commission payment from you. DO NOT SIGN ANY CONTRACT saying they are your realtor. They represents them, not you.
You should research the realtor laws regarding commissions/payments and representation, or have a free consultation with a real estate attorney in your state. It's not wise to be in the situation where the realtor is representing both the seller and the buyer. That's double-dipping and they won't be looking out for your best interest, just theirs.
Generally, most realtors do follow the code of ethics and do abide integrity. However, do your homework (like your due diligence on a property), consult an unbiased expert and you should be well-informed on how to proceed and what to expect.
John
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