You must have a valid real estate brokers license to obtain compensation for brokering a real estate transaction. If you do not have a valid license at the time of providing the service, you have no right to compensation. See California Business & Professions Code 10136.
It is very popular in the real estate business to pay a "finder" fee to someone bringing a buyer and seller together. This technically is legal. See Tyrone v. Kelly, 9 Cal 3d 1, 11-12 (1973).
However, if the "finder" engages in negotiations between the parties, even to the slightest extent, a brokers license is required. See Rees v. DRE, 76 Cal App 3d 286, 295 (1977).
Thus, if the "finder" encourages one party to pay a certain price, offers advice about a fair price, or does anything other than simply introduce a buyer and seller, he risks not being entitled to any compensation. Without a valid license, no payment can be had, despite having a contract or promise to do so.
I am attorney Robert A. Von Esch IV and I provide business litigation, commercial real estate, and construction defect legal services. More information about my practice can be found at http://www.voneschlaw.com/
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