Are you legally wholesaling?

[Harry Walker]

It's been a while since I've been in real estate.  Just really getting my brokerage back up & running.  Needless to say I've been bringing myself up to speed on the new laws and surprised at how many people are breaking the law without even realizing it.  If you are a wholesale what does your contract legally give you the right to do?

[Karen Rittenhouse]

@Harry Walker and @Ryan Blake

You're correct, there is a lot of confusion here on BiggerPockets about wholesaling and one of the main reasons is people use the wrong terminology which makes understanding impossible.

Just here, you're already talking about 2 very different types of transactions.

1. Wholesaling is legal in all 50 states. Wholesaling is a way to sell properties. You purchase (close on the purchase and go on title), do nothing or almost nothing to the property, mark it up and resell it typically very quickly.

2. Assigning or assignments is not legal in all 50 states. With an assignment, you put a property under contract and sell or "assign" the contract only. You never go on title or own the property (which is why it is not legal in every state), you are simply dealing with the purchase contract only.

And you can use any Purchase and Sales contract for wholesaling since it is a regular purchase and sale. You can get a much more abbreviated contract that many attorneys will create for you.

Not all contracts are assignable so check with your local attorney to see if they are in your state.

Good question and good luck!