Work as an agent & wholesaler: is it unethical?

Question

Hello to all,

Disclaimer: I have not done a deal yet, nor is my RE license hung on any wall.

But it has got me to thinking. I will be getting my broker license eventually, and will get my first wholesale deal soon through hard work. But my question is this. Is it ethical to act as both? Obviously I don't mean on the same deal, but lets say you talk to a seller as an agent, and realize that they are motivated, so can you tell them that you are also an investor and would like to buy their home quick for cash without taking it to the MLS, and proceed from there. Vice versa, if a seller you marketed to as a wholesaler ends up wanting to take it to MLS, and you step in and say I am also an agent, and could represent you. Obviously, all this takes into account that in your PSA with sellers as a wholesaler you have agency disclosures and all. Is this illegal? Is this unethical? Thank you in advance.

Aaron Mazzrillo · Answer

I've never had luck getting a listing after making a wholesaler level offer. It just is such an absurd difference in value. If you offered me $100K and I said no, then said, "Well, I can list it for you at $180K" I'd think you were a kook. I've done exactly two listings after attempting to buy the properties. However, I'm not that motivated to do a ton of paperwork in order to collect highly taxable income. Just not my flavor.

I have referred out a lot of potential listings to agents, but only a few ever went to escrow and eventually trickled a check down to me.

I'd prefer to just keep hammering them until they capitulate and take my cash offer. Otherwise, I'd rather do something else... or nothing, but I certainly aint doing no open house on your crappy property on my Saturday afternoon.

Be like water. Follow the path of least resistance. Lock em up at a wholesale price, then convert the deal into a check or rehab it yourself. It is such an easy way to make money.

Aaron Mazzrillo · Answer

At one time I suffered from a bout of employee insanity and actually went to a Keller Williams office to inquire about hanging my broker's license there. I believe I had a mild case of Sheeple. Anyway, I was interested in adding a second stream of income and thought no easier way than to get a few listings. When I asked about selling my own properties, the broker told me I could not do that. They would be her listings and she would have to be paid a fee. I laughed, grabbed a free copy of Gary Keller's Millionaire Real Estate Agent and Shift and went out the door. So, it wasn't a total loss and I quickly recovered my entrepreneurial spirit.

Justin Fernandez · Answer

If you want to wholesale, and you have your license then disclose. Act as the principle, but if they want to list it, you've already disclosed so list it. That seems to be the general answer you were looking for.

@jay hinrichs covers that in a lot of his posts.

You also would want to find a friendly investor brokerage.

There's actually a few podcasts on BP that cover those exact issues. Look for the wholesaling ones. @aaron

@Aaron Mazzrilloundefined podcast was really good and covers exactly what he does.

@karl krentzel has a podcast that covers what he does.

I plan on getting my license after I finish training and broker large MF. I like them more than SFR, or maybe syndicate. It really just depends on where I'm at and what I want to do. Being at the needs of the army puts me at a disadvantage, so I'll just have to switch with what works in the area until I settle down.

Hope this helped. Those 3 I mentioned put out some seriously good info so dig through thier posts. They might even chime in here.

Karl Krentzel · Answer

Thanks for the shoutout about The Red Pill Investor Podcast!  I have the World's First Periscoped Wholesale Deal and Subject To Deal for you to see on my site!  Actual Customers via Periscope! REAL appointments!

Have a POWERFUL Sales Day!

Fred Heller · Answer

Your broker may have a problem with it. Many brokers have policies that do not allow their agents to represent themselves. They have to use another agent in the office.

Renee Cato · Answer

@Aaron Mazzrillo, 😂😂😂

Account Closed · Answer

@Justin Fernandez Thank you so much for the references and advice.

@Aaron MazzrilloI see why they would. Thank you for the input!

Work as an agent & wholesaler: is it unethical?

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