Wholesaling as an EXP agent seems impossible, please help

[Jose Garcia]

Hi everyone I'm hoping an investor who is also licensed as an agent can help me out with what this means for my future being a licensed agent and trying to wholesale!? doesn't seem like the state brokers i talk to want to help me, i am looking for a more creative way to go about things.

I am trying to begin wholesaling with my separate llc entity but it seems almost impossible to do so as an agent for EXP in florida. or maybe I'm not understanding this text in the attached photos. How can i go around this besides doing a double close? how do agents wholesale, what entity do you guys use and how is the whole agent world and wholesaling world able to co exist? i just don't want to get in trouble trying to wholesale deals being as i am an agent and whatnot.

Regardless i am going to do the required steps in the second photo, but how does everyone else do it? Do i really need to purchase insurance as well?

[Bruce Lynn]

Not saying it can't be done, but very tough.

How do you get the best price and fulfill your fiduciary duty to the seller, when you think you can sell it for more as an agent/broker to someone else?

These are probably the most riskiest transactions along with property management for agents and brokers....I see it....I hear it....

This is what I hear......that agent stole my mom's property....she didn't know what she was doing or signing. Grandma never tells the family until after she signs the contract with you. So while maybe legal....now family kids and grandkids are angry grandma sold the house to you. You assign it for $10,000-$20,000-$30,000-$50,000 profit. Family and friends of grandma figure this out. When they sue and get in front of a judge or a jury.....they're going to cry that you stole that money from grandma. You're a crook. Since you are licensed you should have put her interest above your own and sold it for her and given her the profit, not kept it for yourself. Your broker and likely their E&O insurance company doesn't want to fight and protect you against these kinds of lawsuits or even complaints to the licensing board, etc. Of course there is always more to the story. You may have helped them get cash when they needed it or a whole host of other good reasons why you bought cheap, resold it, and grandma wanted to sell to you....but it is just a tough road to fight for the brokerage if it goes south and likely in some way you are using their resources, but not rewarding them for their liability.

Hope that makes sense.

For most people I think you can potentially make a lot more money being a good agent and trying to focus on that part of the business vs wholesaling.  There are some wholesalers that make good money, so they are out there, but for 95% of the people doing it, not a good or long term business.   I'd focus on one or the other.  You could give up your license/go inactive and just wholesale, or keep it and focus on something else.

Good luck and best wishes.

[Wayne Brooks]

@Jose Garcia

This never made sense to me to try it. And also, why….because you think you’ll think you’ll make a bigger fee? As an agent, I could always convince a seller to sell through the mls verses signing a contract with a wholesaler. Last one..cash contract in 4 days, 10% EM, $16k higher Net to seller.

[Chris Seveney]

@Wayne Brooks

I agree this blows my mind how this is even legal (or ethical)

Isn’t the job of an agent who works for a broker also to go out and find new clients? So instead of selling as an agent they are finding sellers to try and buy from them wholesale to sell….

[Peter Tverdov]

Ummm you can't? Day one of real estate classes explains that you have a fiduciary duty to your client. Ripping equity from them and putting it in your own pocket is the complete opposite of what they teach you. Wholesalers are as scummy as it gets in real estate. They lie to the end user, lie to the seller, etc. I am stunned the real estate commissions in various states don't crack down on it. 

[Drew Sygit]

@Jose Garcia Would think that you could do it if you properly disclosed the true value of the property.

Anyone ever watch Pawn Stars (https://www.history.com/shows/...)?

Every episode goes like this: 
1) Owner/seller brings something interesting into the pawnshop for quick sale & cash
2) Rick, somehow knows and expert that can tell all of them what it is worth
3) Expert tells everyone the item is worth $x
4) Rick turns around and tell the owner/seller he can only pay $x-profit for the item
5) Owner/seller usually, but not always ACCEPTS LESS THAN WHAT ITEM IS WORTH!

So, what's the difference between a pawnshop and a real estate wholesaler?

They both serve a purpose or they wouldn't exist.

An agent trying to be a wholesaler would just need an ironclad disclosure(s) to minimize fiduciary-based lawsuits, understanding that someone will always sue.

[Eliott Elias]

Join a entrepreneurial brokerage that will allow you to make money in ALL aspects of real estate. Check out Teifke Real Estate 

[Nick C.]

Why not hang your license at a brokerage that allows you to wholesale? It seems like you're trying to do things the hard way, sticking with exp. 

[Robert Jordan]

Aren't there Realtors that purchase properties from say tax liens, sheriff's sales and older distressed owners who just want out and don't want to go through the trouble waiting for the process to unfold?

[Caleb Brown]

I would not wholesale. What I do, give the seller what my client would offer( run comps and don't low ball them). Preview it for my buyer if they are interested. Commission depends on who pays. I typically represent the buyer and they pay my commission. If the seller doesn't want to work with our buyer you could offer to list. It's about building a relationship and figuring out how to help the owner out. This could be off market or on the MLS

[Jon Carag]

Jose,

Since you're already an agent at eXp, it's tough.  Depends on your upline.  It would be possible if you were considering joining eXp but had not yet.  Reach out if you have any questions.

[Account Closed]

Why not put all the wholesalers out of business and be a fiduciary by doing the deal as a Realtor instead of wholesalers trying to get as much as possible with what is basically a net listing? That's my plan.

You have 3 options.

1) Still try to wholesale if legal. Talk to a local lawyer, but typically as long as you disclose everything, you're fine. EXP rules just show you can't be on both sides of the transaction, which is true of any transaction at EXP.

2) Be the listing agent - you just can't also be on the buyer side. Drawback here is you'd have to pay a percent to the buyer's agent, but just team up with another EXP agent in your area or recruit an agent to EXP with you as their sponsor, and you'll still get money from their side.

3) Be the buyer - you can still be on the contract w/ assignment rights like a regular wholesale deal, but you just can't be the listing agent also. But again team up with another EXP agent in your area or recruit an agent to EXP with you as their sponsor, and you'll still get money from their side.

My recommendation in general is just act as a Realtor and fiduciary, instead of trying to squeeze the maximum profit out of each deal. You'll earn way more in repeat and referral business versus being a greedy wholesaler trying to get a 20% profit or whatever.

You can still keep it off the MLS and use your network of cash buyers. The only thing is you're 'capping' your profit at 5% or whatever instead of trying to screw over the seller like wholesalers do.

[Harrison Sharp]

great way to get sued... really the only workaround is the set up an LLC where you own a piece of it but someone else is running the wholesale operation and you contribute cash and advice in certain scenarios. I'm sure there is still risk is that too.

[Marian Huish]

Quote from @Bruce Lynn:

Not saying it can't be done, but very tough.

How do you get the best price and fulfill your fiduciary duty to the seller, when you think you can sell it for more as an agent/broker to someone else?

These are probably the most riskiest transactions along with property management for agents and brokers....I see it....I hear it....

This is what I hear......that agent stole my mom's property....she didn't know what she was doing or signing. Grandma never tells the family until after she signs the contract with you. So while maybe legal....now family kids and grandkids are angry grandma sold the house to you. You assign it for $10,000-$20,000-$30,000-$50,000 profit. Family and friends of grandma figure this out. When they sue and get in front of a judge or a jury.....they're going to cry that you stole that money from grandma. You're a crook. Since you are licensed you should have put her interest above your own and sold it for her and given her the profit, not kept it for yourself. Your broker and likely their E&O insurance company doesn't want to fight and protect you against these kinds of lawsuits or even complaints to the licensing board, etc. Of course there is always more to the story. You may have helped them get cash when they needed it or a whole host of other good reasons why you bought cheap, resold it, and grandma wanted to sell to you....but it is just a tough road to fight for the brokerage if it goes south and likely in some way you are using their resources, but not rewarding them for their liability.

Hope that makes sense.

For most people I think you can potentially make a lot more money being a good agent and trying to focus on that part of the business vs wholesaling.  There are some wholesalers that make good money, so they are out there, but for 95% of the people doing it, not a good or long term business.   I'd focus on one or the other.  You could give up your license/go inactive and just wholesale, or keep it and focus on something else.

Good luck and best wishes.

Well said ! 

[Marian Huish]

Perhaps you should have looked into this before getting licensed as now you’ll be held to a higher standard @Jose Garcia!

[Eliott Elias]

Switch brokers, find a brokerage that is entrepreneurial and full of investors. Big box brokerages generally won't allow you to wholesale 

[Michael Dumont II]

Legally you can wholesale under a business entity, unless your your state explicitly prevents it. I do it all the time as do several other agents I know in eXp. Also, Sounds like a lot of people don't understand the purpose, and value a wholesaler can bring to a seller. I NEVER miss represent the sellers choices, always informing them that they would get more through an agent. They alone make the decision to sell usually due to convince. We provide choices that other agents can't.