I don’t see it as fishy. If he brought you the deal and it does not close because of what you do, I’d suggest you still owe him his pay. If the seller does something strange that prevents the sale, then is it your vendor’s fault?
I’d say that what needs to be done is a very careful, quick analysis of the situation before paying the vendor. You attempt to find out anything that might cause the sale not to go through. Then, if everything looks good, you pay.
I’m talking with a guy who’s going to bring me deals for a commission. I’m planning to give him his commission when the deal closes, no different than how a real estate agent is paid. Is this how these deals are done? I’m not going to give someone money before a deal closes given all the things that can go wrong. I think he expects payment before but this sounds way fishy to me.
Re: I’m the buyer of an assigned contract - Posted by Kristine-CA
Posted by Kristine-CA on June 29, 2003 at 13:20:20:
Mike: be careful with the wording. It is not a “commission” if you buy an assigned contract. The seller of your contract cannot legally bring together buyers and sellers unless they are agents/Realtors. It is possible to pay the assignment fee at closing. You’d have to check with the closing agent for the particulars.
Will the properties already be in escrow? And have you seen the contract that the buyer will be using? You become obligated to perform the same as the original buyer–the Seller is also obligated to perform. Get the contract and have your attorney look it over.
It’s not fishy to pay upfront. Investors do it all the time. But there are some risks. You may want to pay him at closing on the first few and then you can move to an arrangement where you pay for the contract upfront.