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La Sierra Hills : Real Estate Advice

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Tue Sep 14, 2010
Loren Hoboy answered:
As has been pointed out it is illegal for a real estate agent to pay you a "finders" fee. You may enter into a consulting contract with your "friend" for services. Are you perhaps providing translation services, transportation or doing his internet searching. These are not real estate functions so are not covered by the Realtor rules. Any payment he make to you is business income and should be reported on your tax returns. You did not say what services you have the skill and experience to offer.

Buying Real Estate can be risky if not done correctly and should be done with experienced agents, accountants and legal advisers. For example I know if a case where a seller and buyer did a land contract (Contract for Deed), but did not use a 3rd party escrow company to receive payments and dispense those payment to the seller's lender. Guess what, the buyer lost over $18,000 when the lender foreclosed on the seller because he did not pay has lender. The lender foreclosed, leaving the buyer with no way to get his money back.

You may want to help your friend out of the kindness of your heart and let him repay the favor later, but do him a favor and be sure he gets professional advice to avoid these buyer pitfalls.
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