Q: Do property scouting and client referrals require a license under Ohio law?

A: Based on Ohio real estate law, your activities would likely require a license. Under Ohio Revised Code Section 4735.01(A)(7), a person who "directs or assists in the procuring of prospects or the negotiation of any transaction, other than mortgage financing, which does or is calculated to result in the sale, exchange, leasing, or renting of any real estate" is considered to be acting as a real estate broker Justia Law. Furthermore, Ohio law specifically prohibits licensed real estate brokers from paying "a commission, fee, or other compensation for performing any of the acts specified in section 4735.01 of the Revised Code to any person who is not a licensed real estate broker or a licensed real estate salesperson" Ohio.

Your proposed property scouting activity falls under "procuring prospects" as defined in the law. Property finding or "bird dogging" operates in a legal gray area in Ohio, where you may be able to sell information about a lead to a potential buyer with a private contract, but you cannot market the property itself without a license JustAnswer. It's crucial to consult with a local real estate attorney to ensure compliance with Ohio's specific requirements, as some states require specific licensing for solicitation activities Real Estate Skills. The key distinction appears to be between simply providing information versus actively participating in any aspect of the transaction process.

For the client referral portion of your business plan, similar restrictions apply. The law specifically addresses those who are "engaged in the business of charging an advance fee or contracting for collection of a fee in connection with any contract whereby the broker undertakes primarily to promote the sale, exchange, purchase, rental, or leasing of real estate through its listing in a publication... or for referral of information concerning such real estate to brokers" Casetext. To operate legally, you would need to carefully structure your business to ensure you're providing only raw information without crossing into activities that constitute brokering or soliciting. I recommend consulting with a real estate attorney who can help you review your specific business model and provide guidance on how to operate within Ohio's legal framework.