He wants me finding houses for a flat fee. What changes on paper?

I've done six assignments. The way it works for me now is I get a house under contract, I market it, whoever pays the most gets the assignment, I collect the fee at closing. Simple enough that I understood it in a week.

One of my repeat buyers, out of state, owns nine rentals here, called and said he wants to stop competing with my other buyers. His offer was $6,000 a house, he tells me what he wants, I go find it and negotiate it and he closes on it directly with the seller. He said he'd do six to eight this year.

The money is similar to what I make now, and it's steadier. What I don't understand is what actually changes. If I'm not the one on the contract, who is negotiating? Am I signing anything? He said I'd "represent his interest" and that phrase made me nervous because I don't have a license.

I've got the six months of contracts I've done and a decent mail list. What I don't have is any idea what document sits between us in this new version, or whether I'm allowed to do it at all. Deciding whether to say yes on a call Thursday.

8 replies

2stephen_ok9CO2CPRO6

There's a middle version people use. You keep contracting in your own name as principal, exactly like now, and you assign to him at your cost plus a flat $6,000 instead of marketing to the highest bidder. Same paperwork you already understand, same position on the contract, and he gets what he actually wants, which is to stop bidding against strangers.

He may not care about the distinction. It's a real one though.

1devon_pierce Get yoursPRO5

@meridian that's clean and it answers his whole question in four sentences.

1gregpowell66AG4BPRO8

The thing that changes practically, if you go the true service route, is who eats a bad house. Right now if you contract something and it's rotten, you let the contract die and you're out your time. If you're finding for him and he closes and the foundation is shot, he's going to feel like he paid you $6,000 to bring him that. Get in writing that you're not warranting condition and that he runs his own inspection every time, no exceptions, even on the ones he says look fine from the photos.

1kevin_lombardPG1BPRO5

Had to go through this a couple of times. In the current setup, @keystone owns the right to buy the house and sells that right. In the new way he never owns anything and just gets paid for the work. Is that right?

2tylerbrooks9PassivePRO5

@juniper that's it, yes. And that's why the licensing question comes up in the second version and not really in the first. In the first he's dealing with his own contract. In the second he's acting for someone else.

1brandonlee36Passive

Steadier is worth something but check what steady means here. Six to eight this year is his estimate, not a commitment. Ask for a minimum, or a monthly amount against the per-house fee, or accept that you're doing exclusive work for a number he can revise in March.

0tashaford30PB2APRO7

Also ask what happens to the houses that don't fit his box. If he wants exclusivity you're giving up your other buyers, and $6,000 times whatever he actually does has to beat everything you were making before, not just the per-deal number. Six houses at $6,000 is $36,000. What did your six assignments pay?

He wants me finding houses for a flat fee. What changes on paper?

8 replies