I find off-market real estate deals and have the buyer's pay a commission. Is that wrong?
Hi, I'm a commercial real estate agent in Southern California (a very competitive market) and work primarily to find real estate deals for investors and developers. Because we bring them these deals in a situation where they don't have to compete with other buyers (and it's a good price) we ask the buyer to pay the commission. Is that wrong? 

I don't want to rub people the wrong way, but we often times find properties at below market value, so we feel the commission is warranted. 

I'd love some thoughts from the community. 

Thank you. 
[{"id": "d94n01k", "text": "That's actually pretty normal. As a seller, you're not going to want to pay a commission for an off market deal. ", "replies": [], "depth": 1}, {"id": "d94n400", "text": "In other words, you're a wholesaler of sorts. This is not necessarily wrong, but it may be illegal if you live in a state where you're required to have a real estate license before you can a) advertise property for sale or lease, b) pay or receive commissions without a brokerage involved. \n\n", "replies": [{"id": "d955xlr", "text": "Yes to this. Make sure if you are wholesaling you get a contract and advertise an assignment. ", "replies": [{"id": "d9eevuk", "text": "Is this the same as a Confidentiality and Fee Agreement? ", "replies": [], "depth": 3}], "depth": 2}, {"id": "d9eev3f", "text": "Of sorts, yes. This is good info! Thank you for the insight. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "d94tw23", "text": "For the right off-market deal, the buyer might pay the commission. Just make sure there's a written agreement in place.", "replies": [], "depth": 1}, {"id": "d955vmb", "text": "If it is a good deal, the buyer should have no problem paying a commission on it. A deal they would not have otherwise had is better than nothing. \n\nThis is very common with wholesaling as well. ", "replies": [{"id": "d9eeyvc", "text": "That's the way I see it. We bring the opportunity that no one else knows about and our clients don't have to compete with anybody for them. ", "replies": [], "depth": 2}], "depth": 1}, {"id": "d95ujgd", "text": "It's more of like a consulting fee on the buyer.  That is how its structured sometimes.", "replies": [{"id": "d9ef3eu", "text": "Would that then be something paid outside of escrow? ", "replies": [], "depth": 2}], "depth": 1}, {"id": "d98jbng", "text": "I've had it work multiple ways. I work for a few different development companies in Maryland/Delaware and have had deals (even with the same developer buyer) has either paid the commission or worked it into the deal from the seller. \n\nCertainly make sure it's in writing ahead of time if you don't know them well enough. I've been working with the one company for years, and I know they'll look out for me if I get stiffed on one deal they'll fight harder for me in the next. ", "replies": [{"id": "d9ef0mr", "text": "I've heard something similar to this before, but when you say \"work it into the deal\" would that mean having the buyer pay a higher price than the seller is willing to accept so that you can make the difference? ", "replies": [{"id": "d9ekrfe", "text": "We try to make sure the commission is up front with the initial offer, that the seller is expected to pay it at settlement. I've never had it get in the way of a deal, but there have been situations where the buyer paid a premium so that I got paid. \n\nI have had sellers try to cut me out of a deal, but I remind them that this is how I make a living and I that don't work for free. Typically that gets them to back off, even if the commission isn't what I initially wanted, some pie is better than no pie. ", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "d9apg2e", "text": "No problem with this... it's just factored into the deal. You can also position it by letting them know the sellers aren't marketing this and their offer has a MUCH better chance of being accepted if you're not asking the seller to pay a fee. Alternate approach is to tell your buyers you'll ask for a fee but need buyers to commit to pay your fee if the sellers decline. Frankly, I think often times you get closer to a deal by having buyers pay if it's an unsolicited offer, one less barrier. Of course your buyers (investors / developers) are keenly interested in closing on a good deal when they find one.", "replies": [{"id": "d9ef703", "text": "Right, that's my general understanding as well. Have you done this before? Maybe ask the seller for 1% and ask buyer for 2%, or however the split can best be accomplished? What do you think a fair fee is for off-market deals? ", "replies": [{"id": "d9emas0", "text": "Like most sales, the percentage will vary with the total price (at least it does here) Customary might be something along the lines of 5-6% for less than $5 MM, maybe 3-4 % if you're $5 to $15 MM... maybe a couple of points beyond $15 MM... Of course that is a listing fee, so in your case it'd be half of that amount (assuming there is nobody else on the broker side). Fees may vary greatly from market to market though...", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "d9tbxcr", "text": "What kinda deals are you finding....land or exsisting?", "replies": [{"id": "d9zaldl", "text": "We find ground up development sites as well as property's that can be rehabbed or repositioned for significant increases in value. ", "replies": [], "depth": 2}], "depth": 1}]