Knock on the door or just hand over the address? The fee seems to depend on it.

Question

Coming into this with no portfolio and no license, so all I have to sell is the finding. Two people I have talked to run it completely differently and both are getting paid.

The first sends addresses and nothing else. Photo, parcel number, whatever the assessor site shows, condition note from the street. She never contacts the owner. Her argument is that the moment you talk to a seller about selling you are edging toward activity that some states treat as needing a license, and she does not want to find out where that line sits in a deposition. Her clients do their own outreach and pay her per address.

The second knocks, gets the owner talking, and delivers a lead with a name, a phone number, a reason for selling and a rough price the owner mentioned. He charges maybe four times per lead what she does, and says his clients keep him because a contacted lead saves them three weeks of skip tracing.

The gap in price is real. So is the gap in risk, and I cannot size the second one from the outside. Cold addresses look safer and pay worse. Contacted leads pay well and put me in a conversation I may not be allowed to have where I live.

What I want to know from people actually doing this is whether there is a defensible middle, something like confirming the owner is alive and reachable without ever discussing price or terms.

aaron_fitz10 · Accepted Answer

There is a middle and it is narrower than most people describe it.

What I do is confirm facts that already exist somewhere public or observable. Is the owner of record still living at the property, is the mailing address different from the situs address, is the roof failing, is there a lockbox on the door. I will call to confirm I have reached the right owner and that they are the decision maker. I stop before anything that touches price, terms, timing, or whether they would consider an offer. Once I say the words would you consider selling, I am in a conversation about a transaction and I am not equipped to be in it.

The important caveat is that where the line sits is set by state law and it moves a lot from state to state. Some states define brokerage around negotiating or soliciting on behalf of another for compensation, others hang it on whether you are paid contingent on a closing. I had a real estate attorney in my state read my script and my fee structure before I sent a single lead, and it cost me about two hours of her time. Anyone doing this should get that same review from an attorney licensed where they operate rather than borrowing my answer.

On pricing, the verified contact tier gets me roughly double the cold address tier, not four times. The person quoting four times is being paid for the seller conversation itself, which is a different job with a different exposure. I would not build a service around a premium I could not defend if a client's own compliance person asked me how I got the number.

luis_carrera · Answer

I have been stuck on this same fork for two months and the thing that finally moved me was writing down what my clients actually do with a lead. Both of mine have a person on staff who calls lists all day. For them, a name and a phone number saves an afternoon, not three weeks, so the premium I could charge for contact was maybe 30 percent, nowhere near four times. A smaller client with no acquisitions person would value it completely differently. Ask yours what the contact is worth to them before you take on the risk of getting it.

samantha_ruiz · Answer

I buy from both kinds and pay both kinds. The cold address people are useful when they know my box cold and send me eight a week I have never seen. The contacted lead people are useful maybe twice a year, and honestly half of what they hand me as motivation turns out to be an owner being polite to someone on their porch. A seller saying yeah I would sell for the right number is worth almost nothing. What I pay up for is a documented reason, a probate filing, a tax delinquency, a landlord with a vacancy he has carried for eight months.

Ember, if you go the contact route, the thing to capture is the fact behind the motivation, not the owner's mood that afternoon.

renee_dubois · Answer

Every unit I own taught me something and the one that applies here is that owners lie to strangers about their plans. Keystone is right that documented reasons hold up and porch conversations do not.

Knock on the door or just hand over the address? The fee seems to depend on it.

4 replies