A sourcing agreement clause lets the sourcer shop the deal to other buyers after 24 hours

Question

A sourcing agreement worth studying closely is one where the sourcer presents properties to the client first, and if the client has not responded within 24 hours, the property can be offered to other buyers on the list. No retainer, fee at close, standard enough otherwise. There are two ways to read a clause like that. The generous read is that this is how a wholesaler stays alive. Sellers on contract have a clock running, and nobody can sit on a house for three days waiting for one buyer to respond, and the wide buyer list is exactly why deals reach that sourcer in the first place. Paying for access to the pipeline means accepting a spot as one of several. The less generous read is that the buyer is not really a client at all, just a name on a mailing list with an invoice attached. If the same house goes to eight people, the fee is not buying anything the other seven aren't getting. Exclusivity, meaning the sourcer works only that buyer's box, is what would make it a service rather than a broadcast. Exclusive terms cost more, usually as a retainer, and carry the risk of a slow quarter for the buyer. There is a real case for either version, and the choice usually comes down to how much a buyer values certainty of allocation over price.

renee_dubois · Answer

24 hours is not unreasonable on a real distressed deal, it's unreasonable if the notice arrives at 9pm on a Friday. Worth asking what present means in practice: full address, photos, seller situation, numbers, or a teaser with the street name blanked out. Both versions exist, and only one of them is answerable in a day.

luis_carrera · Answer

The non-exclusive version is usually the safer signature, even for someone inclined to overthink these things. Exclusivity sounds better on paper, then the buy box turns out to be narrow enough that only two houses a quarter come through, and a monthly fee is being paid for the privilege of waiting.

aaron_fitz10 · Answer

@luis_carrera that's my worry too but flip it. Non-exclusive means the guy's incentive is to find deals that anyone will buy, not deals that fit your friend specifically. He'll never learn the buy box because he doesn't have to. Exclusive is the only version where his time is actually pointed at one buyer.

dpatel_re · Answer

The clause isn't the problem, the response standard is. Underwriting a house properly takes a couple of hours with comps for the submarket already in hand, and two days without them. So the real question is whether the friend can be ready to answer in 24 hours, which means having the buy box, the money, and the comps sitting there before the email arrives. If she can, non-exclusive is fine and cheaper. If she can't, exclusivity won't save her either, she'll just be slow with nobody else in line. Worth asking for a written first-look window in hours from time of send, timestamped, rather than "24 hours" floating in space. Cheap thing to fix in a redline.

priya_n21 · Answer

Honestly the whole thing sounds exhausting for what's supposed to be passive income at the other end. Is there a version where the criteria just get handed to the guy with a monthly check-in instead?

diane_kowalski · Answer

@priyan21 there is, and it's called being last in line. Which is fine for land where nothing moves for two months, less fine for a house eight people want. @rajmehta14 I'd vote first look is enough, but only with @dpatel_re's timestamp fix in there.

A sourcing agreement clause lets the sourcer shop the deal to other buyers after 24 hours

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