Wholesaling as an agent

[John Clevenger]

As an investor agent I'm quite familiar with wholesalers. Noticing some of them are licensed agents, I'm curious about the risks associated with it given the inherent fiduciary duty of agents. 

I've heard from some that it's better for wholesalers to have a license, however the intricacies of how it works and is allowed is intriguing.

[Nick C.]

A lot of states are cracking down on wholesaling, many laws on the books identify it as brokering real estate without a license. The states definitely do not have the manpower to track down all the wholesalers, but if someone were to file a compliant an individual unlicensed wholesaler could be in trouble. 

The obvious way around that is to get a RE license of course, but then there's the fiduciary responsibility you mentioned. The best way for a wholesaler to cover themselves here is to disclose (in writing) that they are a licensed agent and that they are not representing the seller.