Friday, March 26th, 2010 at 5:23am

Info for Investors

Posted by Ron Ballard

The first article for investors will be about the March 24 announcement from the California Department of Real Estate regarding investors and real estate licensees.

3 Responses to “Info for Investors”

  1. russell valena says:

    Paying your team

    As an investor I understand that the listing agent and the buyers agent must be separate on the A-B and B-C transaction. But how does the JV partner fit into this scenario? Lets say, my JV partner contacts the listing agent and puts an offer in on my behalf. upon acceptance the JV partner markets the property on my behalf and lines up an end buyer who has his own agent.

    How does the 6% commission get divided.

    Thanks Ron

  2. bmellema says:

    Ron,
    You need to be more specific about the role of your JV partner. Are they partnering with you as a co-investor, or are they your money (transactional funding) partner? BTW, there is NO reason your JV money partner should be contacting the listing agent. They are putting up the dough on YOUR behalf, the investor. The RE agent is only one of YOUR team members.
    After reading your question it sounds like your JV partner is the one doing ALL the work. If that is so, they should receive the bulk of the cash.
    The commissions are paid out of the “pot”, that is the difference between the amount you buy and the final purchase price. You should have enough to pay both agents their commission, closing costs, your team members, and finally, provided you did the deal property, there will be a big payday for you too.
    Hope I answered your questions.
    Bob Mellema

  3. bmellema says:

    Ron,

    Let me re-address the 6% Commission.

    First, commissions are not set…they are negotiable.

    When there are 2 agents and one sale, the commissions are GENERALLY split 50/50…3% to the listing agent and 3% to the buyer’s agent.

    The proceeds of a sale A to B and B to C will produce only so much money. It has to be worked out in advance with your agent. Maybe they’ll receive a full 6% on the listing side…but you might have to pay another agent, representing the Buyer, a commission. But do work it out in advance.

    Bob Mellema
    Real Estate Broker/Investor

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