The Legality of Wholesaling

[David Pupo]

Thought I would touch on this topic because of a conversation I had to other day. So I am licensed and working for an investment brokerage here in Florida. I received a call yesterday from another real estate agent who does wholesaling on the side asking about the services our realty brokerage does. 

We spoke for a while and I mentioned to him that I tried doing this on my own for a while but then switched to a brokerage to pursue it full time. He asked me why I made the switch since I could've made so much more money being by myself? I simply replied you're right but its also illegal to do it with or without a license and especially not being under a licensed broker. He was puzzled to hear that information which confused me since he was ACTUALLY licensed! If someone can be confused on this topic and was licensed, imagine someone who hasn't researched the topic!

So yes is it illegal in Florida to do wholesaling if:

A.You don't have a valid/active real estate license and are MAKING commission or profit off of a real estate transaction. 

B. If you are licensed and not under a broker and started your own real estate business (which was something I almost fell into so glad I checked it up!) 

Please make sure you know who you are doing business with or to put it simple Caveat Emptor.

[Hattie Dizmond]

• I wholesale.  
• I don't receive a commission for anything.  
• I don't market properties.
• I don't sell properties.

I market and sell my equitable interest in properties, that being my right to purchase a specific property at a specific price, which is conveyed to me via a fully executed purchase agreement and paid for via my EMD.

I really wish people would stop making blanket proclamations.  What I do is wholesaling and IS NOT illegal in Texas.  I cannot and will not attempt to speak for its legality in other states.

I used an analogy to a newbie earlier today that it's a lot like an NFL team trading (selling) a draft pick for whatever return they choose.  They aren't trading (selling) a player, because they don't own the player that may be chosen with that pick, and that would be wrong.  They are trading (selling) what they own...the draft pick.  I'm selling what I own...the contract.  I am not selling the property, because I don't own it.  I am not receiving a commission, because I'm not selling something someone else owns.  I receive a $ amount in exchange for the contract and the right to purchase the property under contract.

I don't know why we keep having this discussion.

And...the original poster's suggestion that making profit off of a real estate transaction without being a licensed agent makes what you're doing illegal is ludicrous.  I can go out and sell any property I own for any profit I can get, and there is nothing illegal about it, because I'm selling what I own.  There are any number of ways to make a profit on property you control, but don't own, that are perfectly legal.  Again, blanket statements are dangerous.