Wholesaling with a License within a Brokerage

[Ryan Mullin]

So my wife and I run a brokerage here in Indianapolis.  We do a lot of investor deals but we also do a fair amount of retail stuff..  flips and other wise.  Obviously we have to operate under a code of ethics as any other licensee would.  

We are looking into hiring an agent that is working on getting his license as we type.  

The agent is currently wholesaling and I know he wants to continue doing so.  My question is this...   What do I need to do / know / be aware of as the principle broker...?   If anyone else has experience in this realm I would love to hear thoughts.  

Is wholesaling something he should do completely aside from our brokerage? Obviously he would have to disclose he's an agent but could he operate his wholesaling business like an agent selling his own properties FSBO?

Do I need to charge him the normal commission split to cover any potential liabilities?  Or are we safer staying out of it... ? 

Is this a situation I should avoid all together and not have any of my agents wholesale at all?   I've always thought it would be easier to get a listing and move it... rather than pulling off a wholesale deal...  should I stick to that?  

Any feed back would be much appreciated.  I know there is going to be state to state differences in laws but I'm actually interested in the overall thoughts of brokers and wholesalers around the country..   As well as local thoughts and experiences!   

 Thanks in advance BP community.   :)   -Ryan  

[Mike Knowles]

If there is no agency agreement with the Seller, are you really an agent/fiduciary?  There is no contract indicating that you represent them.

I'm playing devil's advocate here.  There seems a clear need to operate at a high ethical standard and, at a minimum, disclose that you are a Realtor and intend to profit from the arrangement.   At the end of the day, however, it's their house and if they want to sell it quickly for less than it would fetch on the open market, they can do that.