Real Estate Agents vs. Wholesalers

[Alex Hileman]

Here are the main differences between most real estate agents and wholesalers:

Agents

• Real estate agents are licensed and governed by the State.
• To become a real estate agent, you must complete 3 college credit classes and pass a State exam.
• Agents usually represent a buyer or a seller and are contractually obligated to work in their clients’ best interest.
• Agents are required to participate in trainings to stay up to date with the market and current legislation in order to renew their licenses every 2 years.
• All agents must be supervised by real estate brokers.
• Agents get paid by commission.
• Agent commissions are usually similar across the board and right now they are about 6% of the sales price of the home.
• Real estate agents and brokers are the only people with access to the Multiple Listing Service, which is the largest marketplace for real estate.
• Real estate brokerages typically have legal teams, marketing teams, lenders, and other resources in house.

Wholesalers

• Wholesalers are not licensed to buy or sell real estate. Instead of buying and selling real estate, they sell real estate purchase contracts by assigning their contracts to buyers.
• There is no barrier to entry to being a wholesaler.
• Wholesalers do not represent buyers or sellers.
• There is no formal training, certifications, or requirements from the Department of Real Estate.
• The laws governing licensed agents do not apply to wholesalers.
• Wholesalers are self managed and do not receive supervision from a broker.
• Wholesalers get paid by assignment fees. There is no standard assignment fee and no limit to what the fee could be.
• Wholesalers are usually not licensed, and therefore do not have access to the Multiple Listing Service.
• Wholesalers typically work alone and have no legal team or legal guidance.
• Wholesaling without a real estate license is illegal in some areas of the US.

What has your experience been with working with a real estate agent or a wholesaler?