Dallas-Fort Worth Real Estate Investor Club

Is it illegal to get paid referral fees?

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  • 20 Jun 2016 6:02 AM
    Reply # 4086303 on 4069379

    Sorry i just could not pass on this . You are just playing games with words now.  I f they send a property to an investor and the investor didn't pay them a fee they would not send them more properties. Of course they are expecting a fee, and as far as not  working for the investor, the investor has given them parameters as to what they want. It may not be in writing but it sure falls under the real estate act to me. You may put lipstick on a pig  but it's still a pig .

  • 21 Jun 2016 12:01 AM
    Reply # 4087694 on 4069379
      You make very valid points. Isn’t playing games with words what the Law and legal professions are all about though? Lol. What’s the difference between expecting and hoping? Other than the unknowable (to us) truth of what a person has on his mind, what can constitute a demarcation between the two; short of a contract stipulating a fee, agreements given in writing, or voice/video recording of communication between the parties? And even in those cases, attorneys then play the semantics game to confuse or delude the issue in the minds of the judge and/or jury.


      The Law words things as it does so that an exact delineation can be drawn between what is permissible and what is a violation. Even if it is an established fact that the birddogger was expecting a fee, the question then becomes, “Are they working on behalf on one particular investor, thereby constituting them a broker?” The law reads, “…performs for another person…” I.e. Instead of that person doing it, they are doing it for them. (Or really, it can even be argued they were doing it for PEOPLE, not a “person.”) Yes, they choose which investor(s) to send the property information to based on the parameters those investors have told them they are interested in, but did they locate that particular property for a particular investor? In other words, did they go, “Hmm, Investor Dan wants a 4/3/2 in XYZ area with an ARV of 150-200k. I’ll go drive the neighborhoods over there and see if I can find something for him.” Or, were they more like, “You know, this is a good area for distressed properties. I’m going to drive around it today and see if I find any vacant houses. If I do, I’ll compare what I find to the parameters of all the investors on my Buyer’s List, and then email property details to any of them I find a match for.” Internal conversation number two, legal. Internal conversation number one, illegal. Even if this would never be provable one way or the other, illegal is still illegal. However, if a birddogger is not looking for a property for a particular investor, they are only performing in behalf of their self, not preforming “for another person.”

      Hey, the OP asked for loopholes.

      I will reiterate a tremendous point that others in this thread have made… Don’t let things like this sidetrack you from growing your business! There are many ways to get started or to grow, don’t get pidgin holed into just one of them. If birddogging seems illegal to you, don’t do it. Simple as that. Nothing tears away more than a guilty conscience or fear of those flashing blue lights. There are many more ways to progress in this industry.

      It is a rarity that I put up a disclaimer, but since sometimes tone does not convey well via internet forums, I will do so here for the readers by saying that Jack Martin Jr. as well as Jack Martin Sr. (Jack, I think your dad is awesome.) have both helped me out personally. I have the utmost respect for Jack and love the no nonsense attitude he has. Please take his words under heavy consideration.

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