Investor · Stamford, CT · Member since 2012 · 247 posts · 63 votes
Just curious, does anyone hold a RE salesperson license for the benefits it provides--but also also does wholesale deals with private sellers or even via the MLS? Has it ever been a problem, or no? How do you phrase the disclosure part? And how does your broker feel about possible WS deals done on your own that you don't list?
Real Estate Investor · FL · Member since 2011 · 586 posts · 360 votes
13y
I am a licensed Broker however my biggest source of income comes from wholesaling. I always deal honestly and fairly with everyone I talk with and if I feel their best option is to stick the property on the MLS through a Realtor, I tell them. So, although there is a chance someone might come back and complain, it's highly unlikely.
When they choose to go with me, I make sure I disclose in the contract that I am a licensed Broker and not representing them and I also have them sign a no brokerage relationship notice as well.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
13y
Vonetta Booker You ask a very good question. Most RE agencies rely on commission as the main compensation. The biggest problem I see is that in 'true' wholesaling, the wholesaler is the middleman acting in their best interest. That's a little different than the traditional broker, who represents the buyer’s or seller's interests. As soon as you put together a deal that has you compensated above a "standard" commission, you run the risk that the "wronged" party will complain to the Real Estate Commission (they define the Rules for brokers) and you'll be held accountable.
I've seen brokers that do wholesaling in the NC Real Estate Commission's Disciplinary Reports.
I guess it's only bad when it goes wrong for one of the principal parties. I'd think it would be easier to work in the standard broker format with a commission.
Real Estate Investor · FL · Member since 2011 · 586 posts · 360 votes
13y
I am a licensed Broker however my biggest source of income comes from wholesaling. I always deal honestly and fairly with everyone I talk with and if I feel their best option is to stick the property on the MLS through a Realtor, I tell them. So, although there is a chance someone might come back and complain, it's highly unlikely.
When they choose to go with me, I make sure I disclose in the contract that I am a licensed Broker and not representing them and I also have them sign a no brokerage relationship notice as well.
Involved In Real Estate · Cleveland, OH · Member since 2013 · 1 post · 0 votes
13y
Ohio law permits a real estate agent and brokerage to represent the seller and buyer in a real estate transaction as long as this is disclosed to both parties and they both agree (dual agency). As a dual agent, a real estate agent and brokerage represent two clients whose interests are, or at times could be, different or adverse. As a licensed RE Associate, I suggest that all deals be done on behalf and in conjunction with your Broker.
Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
13y
Braden C. quick question. When you wholesale, does the broker firm get any compensation or do the fees go directly to you? I guess if you are the broker in charge or own the brokerage firm, it really doesn't matter to the bottom line.
Real Estate Investor · FL · Member since 2011 · 586 posts · 360 votes
13y
Chris Martin For me, it doesn't matter since it's my firm but before I had my own firm I did have to pay a fee to my broker. I only paid a fee when a commission was earned, so when I assigned contracts there was no fee to the broker.
I worked with a 100% commission structure company before and that's how I have mine setup. You basically pay a small monthly fee and a transaction fee when you have a closing. This is the best option in my opinion for wholesalers.
...I make sure I disclose in the contract that I am a licensed Broker and not representing them and I also have them sign a no brokerage relationship notice as well.
This is something I think a lot of people miss. The purpose of the disclosure is not to disclose that you are a licensee, as I keep hearing over and over again, it's to disclose that even though you are a licensee, you are NOT representing them. It's nice Braden to see a clear statement of just what the disclosure is really about.
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
David, not exactly. The purpose of the disclosure IS to acknowledge that you are simply a licensed agent. The idea being to let a non licensed individual know that you are likely more knowledgable in RE dealings than they are. The disclosure about "not representing" them is a further extension of the basic requirement. A licensee who may be a partner in an entity who never has any contact with the other party, and may not even be required to sign any buy/sell agreements must still make the disclosure to the other party.
Wayne Brooks: This is very much state dependent. I should have qualified it by saying in CA there is no requirement to disclose that you are a licensee when acting as a principal, but, although not required, it is advisable to disclose that you are a licensee NOT representing the other party. It could really get sticky if the other party thinks you are representing them in the transaction ... fiduciary duty and all that. Braden's disclosure sounded like something you'd see in CA.
Investor · Stamford, CT · Member since 2012 · 247 posts · 63 votes
13y
@Braden C. How much was the fee you paid to your broker before you opened your own brokerage? Since I’m just now in the process of getting my license, I’ve been used to the non-licensed process of simply keeping one’s wholesale fee. I’m concerned that if I’ve been marketing on my own, I’ll be required to pay the brokerage a commission even still. Is that the way it usually works, or is that negotiable?
Wholesaler · Wilmington, NC · Member since 2014 · 5 posts · 1 vote
12y
@Braden C. Hey Braden, just trying to get started in wholesaling myself. Held a real estate license in Maryland and just moved back to North Carolina. I was originally planning on getting my NC license right away but it seems it could be a hindrance to your profit wholesaling. I know if you have your broker's license and your own shop it doesn't matter, but how does it work if you have your license hung with someone else? I just don't quite understand, if you assign a contract to another investor, wouldn't your wholesale fee be considered a commission that should be shared with your broker? Or is that only the case for houses listed on the MLS?