Advice needed- Wholetaling as a Realtor

[Nicole Clemens]

Hi guys, 

I have read over some posts and am still trying to figure out answers.  

I was referred to a distressed seller by my attorney friend who knows that I am Realtor as well as investor.  She said, 'Here is (well call her 'Mary') Mary's number.  She has a house that she owns free and clear that she cannot afford to pay the taxes on anymore.  There is a tax lien in the amount of $xxx and she is filing for bankruptcy....Can you help her?'

So I met with 'Mary' and I basically told her that I was an realtor/investor and that I could either list her property and do my best to get her as much money as possible (showed her the comps, showed her what she could walk away with, etc)  or I could make her a below market value cash offer and buy it myself.  I explained to her my intentions to rehab it and resell it for profit.  She said that she wanted to think about it and I left her alone and told her that I would wait to hear from her.  About a month and a half later, she contacted me and asked if we could meet again because she needed to make moves.  

We met again and I told her that I could either list it for 90k or offer her 65k.  She told me that many houses had been sitting and she really didnt want to go through the hassle of listing it and waiting.  She said she just wanted me to buy it and be done with it.  I asked her several times if she was sure and even after she signed the contract I gave her a few days to back out if she changed her mind.  I advised her that I was not representing her and advised her to contact her attorney.  

Long story short, we are closing on this deal on monday. The property needs about 25k worth of work to bring it up to about a 145k ARV.

My questions are:  1- Did I stay within the legal boundaries of my obligations as a Realtor?    and 2- It's sounds unethical to me but others may have a different opinion.....if I didnt feel like getting into the rehab, would I be able to just flip it for profit as-is after I close on it?  

[Sarah Ziehr]

You are asking the wrong community if you did the right thing! I would run this past your managing broker, or someone at your local association for confirmation before closing on Monday. 

In this scenario I would have also made her sign a "no agency" and/or "ministerial acts" disclosure. Also, get as much as you can in email but I think that it is too late for that. 

It sounds to me that you did do the right thing- and I don't believe there is anything wrong with flipping it but I would run it past your local ethics committee member just in case. 

Congrats on the sale!