Quote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
