Wholesaling versus Real Estate License
Full disclosure, I'm a real estate broker. But still I have to ask all those would-be wholesalers out there, "Why not just get your real estate license?"
To be truthful, I've never really dug too deeply in to the wholesaling pool. So attack me if you like. I have purchased a property for a client through a wholesaler. Overall, however, I have found it to be the wild west of real estate where ethical practices may or may not be followed.
Of course there are more hurdles to obtaining a real estate license. You have to take the time and some amount of money to earn your real estate license. But from that point, you have to start your business and run a business, just like a wholesaler will have to develop their own systems and practices to get their business off the ground. If you choose a knowledgeable and talented broker with which to hang your real estate license you will have access to tools, training and systems, mostly for free, a wholesaler can only dream of having.
The benefits of the license are innumerable including, and not to be discounted, an ever evolving pool of inventory wherein sellers have said "Hey! Sell my house" and buyers say everyday "I'd like to buy a home."
With wholesaling there are many success stories, of this I am aware. But in my own city, alone, I know of many more who chose to build a real estate business through the path of getting a license and have acquired a great deal of financial independence for them and their families.
Comments (9)
Thank you for the article and for the different opinions in the comments section. As a person that hasn't done any transactions yet, it really helps me look at the differnent ways people go and formulate my own path.
William Wilson, over 7 years ago
As a agent and a investor wholesaler I dont see any gain in NOT having a license
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Christian Chabi, over 7 years ago
I never seriously thought about getting my license. I know a lot of people on this website recommend newbies to get licensed. Maybe I should look more into it.
David White, over 8 years ago
@DavidWhite Each person will take a different path to their success. The key is to get going I'm more of a ready, fire, aim! person. Get started and make adjustments along the way.
Chris Lengquist, over 8 years ago
@Kim Tucker - I have seen it work better both ways. Wholesalers, it seems to me, are able to react quicker but at STEEP discounts to what an agent who exercises patience may be able to bring. I know you operate quite reputably. But the words "fiduciary duty" aren't really what most wholesalers are worried about. An agent for the seller is bound by fiduciary duty.
Chris Lengquist, over 8 years ago
Kim Tucker, over 8 years ago
Chris - I agree, I wholesale a lot and never use the real estate license. However when we talk to motivated sellers, we often find they would be better served by listing the house and we have the ability to do that for them. Other times they want it sold within the week as is and we can do that to - we buy it and sometimes sell it in the same transaction - other times we pay for the house, take full title and then list it to sell - with our real estate license.
Sometimes it's just cleaner and makes more sense to be the listing agent - for example a house that would need to be sold, with no repairs to an owner occupant buyer - you can't explain a wholesale fee to a Mortgage Company, they just wont go for it.
So investors out there, get your real estate license. works much better.
Kim Tucker
Investor & Realtor
Kim Tucker, over 8 years ago
@Joshus Light Your point is taken. And if your business is already established I'm not saying you should...or shouldn't. I'm just wondering if you were starting today which path you might take? Yours seems to be chosen.
I do agree that having a license is not beneficial to wholesalers. You would be held to a higher ethical and professional standard during any litigation.
Chris Lengquist, over 8 years ago
I am a wholesaler and honestly I don't have license. when I do deals I do them with full disclosure of what I am doing. I make sure it is clear that I do not represent anyone but myself. I have to say that a fear of mine is that by having a client they might get me introuble. I don't know how much that ever really happens but I feel safer just representing myself and no one else.
Account Closed, over 8 years ago