Realtor/wholesaler

[Daryl Williams]

hey guys, i spoke with my broker in charge earlier today about investing in real estate (wholesaling specifically) and while he did not say it wasn't ok he did make it seem like it wasn't the smartest idea. Apparently disclosure is the biggest issue.  

So my question i guess would be in terms of marketing, instead of saying somethingvlike "I'll pay cash for your house" like everybody else could i instead word it as "I could help you get cash for your house." Would that not be effective enough?

Thanks

[Bill Gulley]

Clearing things up, an agent who works in a brokerage which is a member of your MLS and Board of Realtors generally has requirements to post all listings on the MLS within a very short period of time, the Board here requires listings be posted within 24 hours.

Better check to with your RE Commission as to "pocket listings", usually not allowed and can be illegal as well. 

You can buy any property you want to for yourself, that means buy and take title. 

Wholesaling by a licensee is also seen as a "net listing" regardless of the paperwork. CA allows net listings with additional disclosures and agreements, but they have ethical issues with the NAR and state laws make them illegal. The issue is that you're effectively doing a net listing by wholesaling and not buying yourself.

Here's another issue investors are unaware of, other people. Your seller is always related to someone or they know someone else well. What you can get a seller to agree to can blow up due to other people who influence the seller! Licensees need to pay attention every time they lay their hand to any contract. Questions to ask yourself:

Is this fair?

Is this in the public good?

What will my Broker say?

What will the Board of Realtors say?

What will the RE Commission say?

What would a judge say?

What will other people known to the seller/buyer say?

If all these questions are affirmative, sign away! 

The truth is always the best policy, full disclosure will keep you out of more trouble regardless of your license status. 

John's approach is absolutely the way to do it, show both sides. Sellers recognize a bird in hand is worth two in the bush. What may happen is that they will list it, try to sell knowing they have a backup offer from you. Do your duty! Try to sell it for them. If it doesn't sell, you're still in the game. 

Some brokerages and agents offer a "Sale Guarantee" if it doesn't sell, we'll buy it! Excellent marketing! Devise this with your broker and start talking to lenders for ORE/REO listings!

Your license should be valuable to you, you need to protect it. Any time you get away from usual and customary practice, trying to follow any investor strategy, ploy, method or niche you need to understand you are held to higher standards in dealing with the public. I suggest you not only ask your broker, but also a local RE attorney about how you intend to act in off beat transactions. 

Licensees took a crash course in RE to pass their exam. You were not exposed to all laws governing business transactions, like the UCC, Fair Goods and Services Act or Elder Laws, perhaps part of Laws of Agency, fair advertising, consumer protection and types of fraud. 

I understand buying for yourself. I really don't understand, other than greed, why a Realtor would even entertain the though of wholesaling since you are simply in the same position   as an agent. The only hopes are that you can dig into the owner's equity for a bigger check and that has issues! You can sell to a known investor just as fast with a listing as any other agreement! Before you act, ask yourself those questions mentioned above! Good luck :)