I received a call from an out of state lender who is preparing loan documents for an FHA loan on a small piece of property here. They need a survey before the loan can be finalized. Normally, when I work for a lender, my professional services agreement states that payment for my services is not contingent upon the loan closing. The gentleman says that that isn't possible in this case. I told him that we could set this up in cooperation with either the buyer or seller so that one of them would be my client and be responsible for payment. He says that isn't possible either because there isn't a buyer or seller because it is a reverse mortgage. I would think that I could work for the property owner doing the reverse mortgage. Of course he promised that I would have no problem getting paid and that I would be paid in 2-3 weeks. I just don't like the sound of this. Are there other ways that I could work this out? Or do I just stay away from it? What would you do?
Having the payment contingent upon the closing is a possible conflict of interest.
(The idea being that if you found something that would sour the deal, you might not disclose it to avoid not getting paid.)
In this particular case, either I'd get payment up front or skip the job.
Run...don't look back. I suspect he's not a "Lending Institution" but a mortgage broker. They make their money by spending everybody else's money.
A reputible firm would have no problem in figuring out how to get you your fee, non-contingent on closing.
> Having the payment contingent upon the closing is a possible conflict of interest.
>
> (The idea being that if you found something that would sour the deal, you might not disclose it to avoid not getting paid.)
>
> In this particular case, either I'd get payment up front or skip the job.
:good:
Laugh it off and be happy you are not getting involved with this type of business.
When people call and try and take advantage of me and my services I tell them how I feel about them and where to go. I consider it a service to the rest of the sheep that just go along to the slaughter.
> Having the payment contingent upon the closing is a possible conflict of interest.
>
> (The idea being that if you found something that would sour the deal, you might not disclose it to avoid not getting paid.)
>
> In this particular case, either I'd get payment up front or skip the job.
Cowboy has it right. Plus I will go just a bit further and tell you that it is not just a possible conflict of interest, it is definitely a conflict of interest.
It is in your best interest to not find any problems that will kill the deal. Plain and simple.
Whoever it was that said run don't walk away from this is 100% right.
Larry P
Thanks. I'm going to stay away from this.
No survey should EVER be perforned without a signed contract. No cotract should EVER be signed unless it CLEARLY states who is the responsible party for payment. No copy of any plat or deed should EVER be handed over without payment of the contract...........wheather now or withing a time period clearly established in a signed contract.
> Of course he promised that I would have no problem getting paid and that I would be paid in 2-3 weeks. I just don't like the sound of this.
I like that statement best. His "promise" should be a contract that he will take responsibility for the payment. If he isn't "sure" enough to sign the contract, he isn't "positive" enough to guarantee payment.
Making a deal that is contingent on closing is exactly what a salesman should be doing, and exactly what an unbiased professional not be doing. If your product might have information that affects the closing of the transaction, a contingency deal puts you in an extremely awkward situation.
Yes, I would decline this project as well... BUT, I have to add, that accepting credit cards will take care of a lot of this kind of "stuff". I use "Square" so I can swipe cards on my iphone, or enter the data if they are out of town. Goes right into my bank account, no need to ever spend office time and money tracking down late payers.
We simply request that the responsible party calls the office with the CC info if they would like to be added to the schedule. We don't bill the card until the work is done, in case they cancel between order and field work. Nothing is delivered until the card is billed.
Major red flag when someone tells you that YOUR fee is somehow contingent. Um, nope, not this surveyor.
Do not bite on this. Do not pass GO. Do not collect $200.
This is just a current variation on an old story.
You can get paid up front, but, only after he discovers that absolutely no one else will do what he wants them to do. That is why it is imperative that no one actually bend over and spread their cheeks for crooks like this guy.
Back in the 80's when banks were going under and FDIC was left holding the bag on many properties, I did several surveys for FDIC. They were incredibly stupid people to deal with, but, they had at least learned that some things absolutely had to be paid in order to get the product they needed. Meanwhile, they lost all sorts of potential money by being incredibly stupid about how they sold the properties they had ended up with. Fast was fantastic. Total dollars received was totally unimportant. Get them off the books......NOW!!!!!!!!!!!!!!!!!!!!!
The landowner is broke, thus the reverse mortgage.
(Basically that means that he is getting a loan, and that when he dies, or goes to a care facility, the bank owns his land.)
The bank want a survey, to be sure that they are getting what they think they are getting.
Now, your survey shows a problem, that blows the whole deal.
Who pays you?
Landowner is broke.
Bank got nothing.
Surveyor got nothing.
OK?
IF it goes through, then you get paid. IF the bank is happy. And, your money comes out of the reverse mortgage. So, the landowner gets less than he thought, and he is not happy.
Naw. We need somebody to be liable for the survey.
Before we do it.
Nate
