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Finders Fee????

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OneDay

Junior Member
What is the name of your state (only U.S. law)? Utah

I came across an opportunity to be a real estate deal finder for a private investor. Since the investor is not a licensed broker or real estate agent and neither am I, can I be paid a finders fee?

Thanks in advance for any insight you may provide.What is the name of your state (only U.S. law)?

Edit: I looked up the legalities of the finders fee and I could only find that you cant get a finders fee from a licensed individual if you are NOT a licensed individual. But I couldnt find anything that talks about neither party being licensed and a finders fee.
 
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Banned_Princess

Senior Member
OneDay said:
What is the name of your state (only U.S. law)? Utah

I came across an opportunity to be a real estate deal finder for a private investor. Since the investor is not a licensed broker or real estate agent and neither am I, can I be paid a finders fee?

Thanks in advance for any insight you may provide.What is the name of your state (only U.S. law)?
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Whatever yous agree in writing.


Doesnt hurt to ask buyer to pay a finders fee to you.
 
C

CLJM

Member
OneDay....

In my vast experience of being involved with real estate activities (though, not in Utah), and a Realtor for many years, receiving a "finder's fee" is illegal; that would be recieving a commission without the requirements/benefits of having a license to conduct real estate business. Even if you just "found the buyer or seller", that is conducting business. In my opinion, no matter how you word your activity, the result is the same, you would be conducting real estate business without a license; illegal.

Furthermore, I would be quite leery of any real estate investor approaching me with an opportunity like that, as they would surely know the legalities, and know that, in the end, there could be no enforcement to pay you a fee that was illegal in the first place.
 
O

OneDay

Junior Member
So is it just receiving a commision for conducting real estate business without a license part that is illegal?

Because obviously it is not the conducting real estate business part. I mean you can buy and sell a home without an agent and that is conducting real estate business.

When I looked up the law online it said that a licensed person can pay a unlicensed person up to $150 dollars for such activities. Then can the investor pay me $150 dollars?

Sorry just trying to understand the exact nature of this stupid law.
 
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HomeGuru

Senior Member
OneDay said:
What is the name of your state (only U.S. law)? Utah

I came across an opportunity to be a real estate deal finder for a private investor. Since the investor is not a licensed broker or real estate agent and neither am I, can I be paid a finders fee?

Thanks in advance for any insight you may provide.What is the name of your state (only U.S. law)?

Edit: I looked up the legalities of the finders fee and I could only find that you cant get a finders fee from a licensed individual if you are NOT a licensed individual. But I couldnt find anything that talks about neither party being licensed and a finders fee.
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**A: list specifically exactly what your duties would be.
 
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OneDay

Junior Member
My duties would be:

find distressed properties
contact owner for info (amount owed, asking amount, why selling)
give that info to the investor

That is it. If the numbers make sense to the investor then he would purchase the property from the seller and I would get paid a %.
 
C

CLJM

Member
OneDay said:
So is it just receiving a commision for conducting real estate business without a license part that is illegal?

Because obviously it is not the conducting real estate business part. I mean you can buy and sell a home without an agent and that is conducting real estate business.

When I looked up the law online it said that a licensed person can pay a unlicensed person up to $150 dollars for such activities. Then can the investor pay me $150 dollars?

Sorry just trying to understand the exact nature of this stupid law.
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OneDay,
That is an entirely different matter---selling your own home (property), which of course, you are allowed to do without a license.


As a Realtor with a listing, I would never give out my sellers personal information such as "amount owed", etc. to a third party.
And, it is not just the numbers the investor is interested in---also, the condition, any problems, etc. would be of prime importance to take into consideration with the numbers. The garnering of all of that information, would indeed be considered conducting real estate business.

I am sure you can realize that the "law" was written specifically for the protection of both the buyer and seller, for responsibility and accountability in a business dealing involving legal contracts and large amounts of money.

What I said, still stands---illegal.
Good luck to you.
 
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OneDay

Junior Member
Okay. So I asked the private investor that offered me the opportunity to find real estate deals for him, why he would have me do something illegal and this is what he said;

Yes, finder fees are illegal in Utah. This is how it was explained to me: a real estate agent may not pay a finder's fee or give any valuable consideration to an unlicensed person for referring someone. But as a business, buying properties for myself, and hiring someone to find properties for me as part of my marketing cost isn't any different then hiring the newspaper put ads in the paper to call me or getting someone to distribute flyers. Just don't negotiate the terms of buying or anything like that.

So is this a b.s. answer or is the way he explained it make it legal?

Thanks for the help so far. I dont want to do anything illegal but just need clarification.
 
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Mass_Shyster

Senior Member
OneDay said:
Okay. So I asked the private investor that offered me the opportunity to find real estate deals for him, why he would have me do something illegal and this is what he said;

Yes, finder fees are illegal in Utah. This is how it was explained to me: a real estate agent may not pay a finder's fee or give any valuable consideration to an unlicensed person for referring someone. But as a business, buying properties for myself, and hiring someone to find properties for me as part of my marketing cost isn't any different then hiring the newspaper put ads in the paper to call me or getting someone to distribute flyers. Just don't negotiate the terms of buying or anything like that.

So is this a b.s. answer or is the way he explained it make it legal?

Thanks for the help so far. I dont want to do anything illegal but just need clarification.
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The cases I found on the subject
  • Kilbane v. Dyas, 33 Ill. App. 3d 439, 337 N.E.2d 217 (2d Dist. 1975).
  • Ford v. American Medical Intern., Inc., 228 Neb. 226, 422 N.W.2d 67 (1988).

The person seeking the finder's fee was stiffed by the other party, and could not recover because he was unlicensed.

Which begs the question: Why is this person looking for an unlicensed person to find a property when there are plenty of experienced, licensed people around begging for work?
 
H

HomeGuru

Senior Member
Stevef said:
The cases I found on the subject
  • Kilbane v. Dyas, 33 Ill. App. 3d 439, 337 N.E.2d 217 (2d Dist. 1975).
  • Ford v. American Medical Intern., Inc., 228 Neb. 226, 422 N.W.2d 67 (1988).

The person seeking the finder's fee was stiffed by the other party, and could not recover because he was unlicensed.

Which begs the question: Why is this person looking for an unlicensed person to find a property when there are plenty of experienced, licensed people around begging for work?
Click to expand...


**A: because a licensed and experienced Realtor is not going to work for $150 a house.
 
O

OneDay

Junior Member
First off, thanks for all the replies.

But that still doesnt answer my question. (please see above post),

Is it legal the way he explained it?

The reason he does not want to go through a Real Estate agent is becasue they charge 3% and he is looking for vacant houses. Its not like I am going to go hunting through out my city to find one but if I come across one, then I take down the address.

The reason I am considering doing it is because there are a TON of them in my town and it is bringing down the value of my house. So why not have an investor buy them, fix them and then re-sell them. He makes $$, I (hopefully) make $$, and if the vacant house is not an REO, then who ever vacated the house doenst have to worry about it anymore.
 
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latigo

Senior Member
What you don’t seem willing to acknowledge is that by representing the prospective buyer you are in fact acting as his or her unlicensed broker and that is illegal in all 50 states.

Your rationalization that you could claim immunity simply because neither of you are licensed is pure sophistry!

In this regard you might wishs to read the Utah case of Diversified General Corp. v. White Barn Golf Course, Inc., 584 P.2d 848 (Utah 1978) where an attorney was denied the right to accept a finder’s fee for locating potential shopping center property. There neither the attorney nor the buyer were licensed.

But I don’t suspect that you will pay anymore attention to the Utah Supreme Court than you have others that don't side with you.
 
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OneDay

Junior Member
Actually, I am not against people that do not side with me. I just wanted a straight answer from someone that would know about my question. Not just people on here guessing about things. Or just typing because they love the sound of the pitter patter of their fingers on the key board.

I actually consulted a REAL attorney in Utah and he said that it is perfectly LEGAL!!!!

So thanks to those who tried to help and piss off to those who think they know everything.
 
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