Real Estate Wholesaling and Assignment of Contract in California

[Ray Eason]

I have a question:

I just got off the phone with a Real Estate Attorney (from Legalshield) because I wanted them to review some contracts for me to do some Wholesaling and Assignment of Contracts here in California.

The individual tells me that I will need Real Estate License to do this.

He says that I would be engaged in Real Estate Sales and considered a Broker.

Now I have done a bit of research, but by all means, I am not savvy enough to contest his claims.

So I come to Biggerpockets with this question and ask for any feedback or information that may help me discern the truth and get on the good road.

Can anyone help shed light on this for me?

• Do I need a Real Estate License for wholesaling property and using an Assignment of Contract to gain equitable interest in property?
• Does marketing to the public increase the chances of running into problems with Real Estate agents who try to foil up my deals?
• Is this why it's better to build a list of Cash Buyers instead of marketing to the public?
• And if I do decide to market to the public, do I advertise, not the property, buy the Assignment of the Contract to potential RE Investors?

Thanks!

[Don Konipol]

Since state laws on the subject differ for every state please regard this as a generalization.  The act of buying and or selling real estate for oneself does not require a real estate license.  This is why state regulatory agencies typically do not pursue enforcement of licensing laws against 'wholesalers' unless they violate laws through other specific actions.  And although the National Association of Realtors continues to raise a stink, 'wholesaling' continues virtually unencumbered by regulatory agency action.

There is a solid argument that typical wholesaling activity, while not violating the letter of the law violates the spirit of the law.  While correct imo, I would image a ruling such as this would be impossible to maintain through any jury verdict.

Obtaining a license actually is detrimental for wholesalers as it may create an agency relationship with sellers and or buyers.