Swimming in sea of leads, but I'm not a realtor - help!

[denemante]

Hello,

I'm not a realtor (web/internet designer/marketeer, actually), but I'm generating significant leads for hot prospects intersted in certain homes. This was not my original intent - but now I'm trying to better understand buyer/seller commissions so I can benefit most from these leads I've generated. Perhaps I need to get my realtor's license!

Anyway, I believe a seller's agent will get about 3% for selling the home (among other things they do).

A buyer's agent will get about 3% for locating a home for you (among other things they do).

But what if I want to buy a home, but don't already have an agent? I call the phone number on the yard sign or internet listing - and get the seller's agent, right? I believe they cannot represent both buyer and seller - but this seller's agent won't let a hot prospect get away. So do they then turn this person over to their realtor friend (to become my buyer's agent)and somehow split the commission? What is that split? Or does this new buyer's agent just get their standard 3% too?

Most importantly, however, is this scenario: if I'm a realtor, can I just try to sell any property I want, even if I'm in no way affiliated with a home? For example - if there is a $500K home for sale on my block, can I just post an ad for it and list MY phone number? Then, when a prospect calls, if they don't have a buyer's agent, I attempt to become that for them? And if they already have a buyer's agent (and the house already has a lister's agent), I call the listing agent, tell them I've got a prospect, and try to split some commission with them?

Finally - assuming I did become the buyer's agent for that prospect and closed the sale - I'd make thousands of dollars in commission on the sale - all thanks to that one lead. But if I didn't want to become a realtor - that lead itself must surely be worth some fixed amount. Or, perhaps the listing agent would give me 1% of the sale and keep 2% for themselves?

Any insights on these breakdowns would be much appreciated!

[IggysListing]

I will attempt to answer your question based on NC law. But you should
check with the regulatory agency in the state of the transaction.
1. Buying a home without an agent - The selling agency can deal with you
and represent you (dual agency, if they practice it). Upon first substantial
contact with you they are required to go over the brochure, working with
real estate agents in NC (view at NC real estate commission site). You can always secure your own buyer's agent.
The listing agency gets the selling commission and the buyer's agency gets the buyer's side.
2. In NC ,all agents start out as agents or subagents of the sellers, unless
another agreement such as Buyer's agency supersedes that.
3. In terms of advertising an existing listing, many members of MLS have
agreements to allow other agencies to advertise their listings. Otherwise
you can ask and many agents like to get additional advertising, however,
I would be careful not to misrepresent the property.
4. To receive commission or part of one in NC, one must be licensed
and the money must pass through the broker in charge. If you are licensed, you can get a referral fee by bringing a buyer or seller to an
agent, but always check first to see if they cooperate with other
agencies. This is typically spelled out in the listing agreement on the
selling side.
5. Many internet companies generate leads for agents. They are advertising entities. But remember, in NC one must be licensed to
receive "commission".
6. Many states have reciprocal agreements that allow for some level
of representation or referrals.

[denemante]

Thanks Iggy...

Maybe an easier way to present the situation is that, for instance, I have the dailyl contact information of people serious about buying 123 Some Street (or rather, a sea of names of people interested in homes across entire towns).

Should I work out a deal with the agent who's name is on the yard sign for that property? (BTW - would the selling agent make more money from the final sale if they were in control of the original lead and represented/referred the prospect to another realtor - or would they make the same money if an unknown buyer's agent brought in the prospect?)

Should I work out a deal with any general realtor I happen to know from my area (basically giving them not only someone house shopping - but someone specificially and actively interested in one particular home)?

And in either above situation, should I "sell" them the "lead" or "referral" and be done with it - or should I freely give it for a part of a commission if there's a sale (assuming I was licensed or able to get a commission part?)

Or should I get my realtor's license and work it myself?

[IggysListing]

Once again, I would check with the real estate commission in your state.
If you are so inclined, a license might be a good thing. Referrals can be
a really good source of income.

[Greg]

Get your license and start working these hot prospects. You will probably find out that most of them are actually more in the tepid to cold range. I get more than 50 a week, so I am not making this up.

[Honeycomb Properties]

Iggy gave you some great answers and I agree w/Greg about he "hottness" of your leads.

I will state again what Iggy was saying- Contact your local Real Estate Commission to find out your state laws. In Indiana you CAN NOT receive compensation for a referral if you aren't licensed (it may be different in your state, but I doubt it). There may be some shortcuts about selling a lead for a fixed fee whether or not the lead closes, but be careful- if the lead buys the house it could be argued that you were paid a referral fee.

This is a tough question to answer because each state regulates it own Real Estate Licensing.

[denemante]

Thanks everyone. Some really thoughtful responses. I tend to agree that "hot" leads are probably only lukewarm. But we all know that leads of any kind (specifically more focused ones) are better than none, and it has to start somewhere.

As I said, the opportunity I have whereby I'm coming by these leads was not by design. But now that I've realized it, it's been easy to tweak it which has sort of turned on the floodgates, so to speak.

To be less vague about the project, we're creating very comprehensive, web-based presentations about individual properties. Being a seasoned expert in e-commerce, web marketing, and online trends/converstion rates/analytics, our offering is extremely dialed-in and providing much more user-friendly design and function on a dedicated-per-property level. This goes much beyond 360 views and those photo galleries. Each is further optimized to bring traffic directly, but of course benefits when a URL is added to an existing listing.

At this point, we're refining the management of interested parties (prospects). We are funneling them back to either the homeowner or listing agent who have paid the minimal cost for our offering (about $300 in our beta test) and letting them have their way with the prospects. But some are pulling in 50-60 per day (qualified through a web form). From those, they can be further sorted for "hotness", but most look as such to me. At this point, I ask whether it would be more lucrative for me if we just gave away our services (skip the $300), but kept all the prospects - and dished them back out for a fee. Even if no one ultimately bought the house, they are potential leads as new clients for a realtor anyway.

Or, perhaps to more readily sell our offering, offer some exclusive funneling of all prospects to one person - if they pay some flat fee up front.

I know that a listing agent likely has an agreement with the homeowner that no one else can market that home. But I also read elsewhere on this very forum that if the listing agent isn't busting their butt to sell the home (and working all channels), the homeowner should fire that realtor. If I showed the homeowner the history of 50-60 prospects from our offering and a listing agent didn't want to pay some fee for it, how long would the homeowner keep them around?

[IggysListing]

Listing agreements are contracts between a listing agency and a
property owner. They include many provisions concerning commission,
etc., but also about cooperation with other agencies.
In NC, all agents are by default agents or subagents of sellers unless
there is an agreement that supersedes that, such as a buyer agency
agreement.
It is a common practice to advertise other agencies MLS listings.
I have never heard this discussed from a legal standpoint, but I would
like to hear comments about the ramifications of incorrectly representing
a property listed by another agency.
Any comments?

[Greg]

Isn't the listing agent already paying for the leads when they pay for the work to be done? When I pay someone to do marketing to promote one of my properties I expect the leads to come to me.

[creativeagent]

Greg,

What do you mean you "pay someone to do marketing to promote one of your properties"?

Does it mean you're not an agent but you're hiring one to list your homes?