Do I have ownership interest if I have a house under contract?

Question

We have a couple properties under contract & the other day someone asked if I was the owner, I said "no but that we have equitable interest in the contract that we're selling for a fee. Otherwise we are going to close on it ourselves" If it's under contract, I'm not the owner right? I'm guessing that I only become owner upon closing even though I technically have control of the property while under contract?

Brad Gabriel · Answer

Actually, you have a beneficial interest as opposed to an equitable interest. It is still an interest and does have value. It isn't an ownership interest per se, however it could be or will be once you complete the requisite steps.

I'm just a recovering professional surveyor turned investor/developer who always was trying to learn as much as I could. Attorneys, please feel free to jump in and correct me as necessary.

Jay Hinrichs · Answer

What the gurus teach is that a wholesaler can put 100.00 down as EM and now they have an equitable interest .. while I agree its a contractual interest.  equitable interest in my mind is subjective ..  I have to think if pushed came to shove a trier of fact would not agree that the miniscule EM deposits that wholesalers in many areas try to use would give them anything but contractual.

this is to skirt the real estate brokerage laws..  IN Oregon I went there with the State as I wanted to know thier position and they take the position that simply having a deposit on a property does not give the buyer of that property to market it to the public or market it as an assignment etc.. they take the position its bringing two parties together for compensation so a license is required or you must close on it then your free to sell it..  I have a few clients that i fund deals for here in Oregon that went down that road got wrung up now they understand they need to actually own them .

Brian Boyd · Answer

If you have a contract on it and have complied with your obligations under that contract, you have a beneficial interest and/or a contractual interest. Should something go awry, you could file a suit for breach and place a lien lis pendent on the property- notifying the world of your interest. But, I think @Jay Hinrichs has given you solid advice which is don't always believe the wholesalers. Good luck with your endeavors!!!!

Charlie MacPherson · Answer

@Allison Meggison  If you're intending to wholesale (i.e., not closing and only then reselling), that is a license-required activity in the state of Maine.  Penalties are $2,000 per incident plus the forfeiture of all profits on the deal.

You become the owner when, and only when your name is on the title - as Jay stated, no matter what the guru courses tell you.

For the record, I have personally contacted the State Real Estate Commission and verified this.

The best course of action is to close on it and then do as you wish with your own property.

Do I have ownership interest if I have a house under contract?

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