Wholesaler laws becoming formalized and regulated its starting here in Oregon
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
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Wholesaler laws becoming formalized and regulated its starting here in Oregon
Wholesaler laws becoming formalized and regulated its starting here in Oregon
Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Most Popular Reply
Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes
1yQuote from @Don Konipol:
Quote from @Jay Hinrichs:
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This whole bag of craziness can be avoided by just having a regulation that residential property sellers MUST be represented by an attorney.
I understand the sentiment, but the last thing I want is more regulation and more hands in the pot. A prudent seller would choose to be represented by an attorney in a situation such as this, but I dont want the government telling people they have to pay for an attorney for their own good just to sell their own house.
I'd much rather see criminal laws that are aggressive when it comes to fraud and deceit/sleight of hand. If a property seller makes a poor decision voluntarily, then sucks to be them. But if a wholesaler/solicitor uses fraud or deceit/deception to gain consent where they wouldnt have otherwise gotten it from a party that was not deceived, then this could easily fall into the realm of fraud and criminal prosecution would be appropriate. Now, parsing out fraud and deception vs "sales tactics" will be tough, but that's the nature of the beast.
I will caveat this with the fact that I am fiercely libertarian and detest the idea of the government being involved at all in a transaction between two parties, but that's just my $0.02. At the rate we're going, pretty soon we're going to need attorneys and government regulators to certify the purchase of a bagel for breakfast.
13 Replies
- Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes1y
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation.Email Address: Dylan@coast2 I like it. Seems good to me.
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes1y
Quote from @James Wise:
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation.Email Address: Dylan@coast2 I like it. Seems good to me.
Wholesaling is a thing on the West coast but a FRACTION of the transactions compared to the mid west and rust belt cities ( A FRACTION) if this disclosure and law was on the books in those areas what you would see is wholesalers snaking each other all the time.. I mean it happens to people i know today.. one wholesalers trying to get the seller to cancel and come over to them . with this law I definitely see this as a distinct possibility.. Second the marketing piece goes out competitor or even just a buyer contacts seller direct nothing precluding them from doing that and making a competing offer and leave it up to the seller if they want to invoke their right of rescission. Now in practice this would have to be a buyer that would close. However theoretically they will cut out the middle man profit and get a better price..
- 1yDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation.Email Address: Dylan@coast2 This whole bag of craziness can be avoided by just having a regulation that residential property sellers MUST be represented by an attorney.
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes1y
Quote from @Don Konipol:
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation.Email Address: Dylan@coast2 This whole bag of craziness can be avoided by just having a regulation that residential property sellers MUST be represented by an attorney.
Not really feasible on the West coast since lawyers dont handle residential closings at all basically. there would not be enough lawyers to keep up with the volume of transactions. But maybe some smart lawyers would create practices that are like foreclosure mIll law firms.
For sure this is a reaction to the public being taken advantage of by wholesalers and complaining to state agencies.. - Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Don Konipol:
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation.Email Address: Dylan@coast2 This whole bag of craziness can be avoided by just having a regulation that residential property sellers MUST be represented by an attorney.
I understand the sentiment, but the last thing I want is more regulation and more hands in the pot. A prudent seller would choose to be represented by an attorney in a situation such as this, but I dont want the government telling people they have to pay for an attorney for their own good just to sell their own house.
I'd much rather see criminal laws that are aggressive when it comes to fraud and deceit/sleight of hand. If a property seller makes a poor decision voluntarily, then sucks to be them. But if a wholesaler/solicitor uses fraud or deceit/deception to gain consent where they wouldnt have otherwise gotten it from a party that was not deceived, then this could easily fall into the realm of fraud and criminal prosecution would be appropriate. Now, parsing out fraud and deception vs "sales tactics" will be tough, but that's the nature of the beast.
I will caveat this with the fact that I am fiercely libertarian and detest the idea of the government being involved at all in a transaction between two parties, but that's just my $0.02. At the rate we're going, pretty soon we're going to need attorneys and government regulators to certify the purchase of a bagel for breakfast.
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes1y
Quote from @Patrick Roberts:
Quote from @Don Konipol:
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation.Email Address: Dylan@coast2 This whole bag of craziness can be avoided by just having a regulation that residential property sellers MUST be represented by an attorney.
I understand the sentiment, but the last thing I want is more regulation and more hands in the pot. A prudent seller would choose to be represented by an attorney in a situation such as this, but I dont want the government telling people they have to pay for an attorney for their own good just to sell their own house.
I'd much rather see criminal laws that are aggressive when it comes to fraud and deceit/sleight of hand. If a property seller makes a poor decision voluntarily, then sucks to be them. But if a wholesaler/solicitor uses fraud or deceit/deception to gain consent where they wouldnt have otherwise gotten it from a party that was not deceived, then this could easily fall into the realm of fraud and criminal prosecution would be appropriate. Now, parsing out fraud and deception vs "sales tactics" will be tough, but that's the nature of the beast.
I will caveat this with the fact that I am fiercely libertarian and detest the idea of the government being involved at all in a transaction between two parties, but that's just my $0.02. At the rate we're going, pretty soon we're going to need attorneys and government regulators to certify the purchase of a bagel for breakfast.
having worked in Charleston personally I get where your coming from because the reality is you do have lawyers on all transactions.. the buyer has a lawyer and the seller has there own lawyer so its already highly regulated and you have lawyers looking at each transaction. This will catch many if not most transactions that could be deemed taking advantage of some seller. And of course SC just made assinging contracts not legal so they are already doing it.
out West we dont use lawyers to transact.. WE use title and escrow companies and or we do a fair amount of business using neither escrow or title or attorneys we can do our own deals. when i use to do foreclosure rescue before that became illegal I did my own.. I did my own title search and prepped by own deeds had seller go to notary sign hand over check to seller and then walk over to courthouse and record the transfer deed.. did this in CA OR AND WA.
this does not happen like this is many states..
To me this is a consumer protection act.. And if everyone is fair does nothing to stop commerce or trading of RE.. WE see that it is specific to SFR transactions and thats were the most abuse by not so nice wholesalers takes place.. 5 units or more bare land commercial is not affected. Edit bare land is affected if its for residental purposes. - Member since 2018 · 1k+ posts · 1k+ votes1y
Quote from @Don Konipol:
This whole bag of craziness can be avoided by just having a regulation that residential property sellers MUST be represented by an attorney.
How is that NOT an excessive, unnecessary, and paternalistic, government regulation, Don?
- Real Estate Broker · Minneapolis, MN · Member since 2011 · 5k+ posts · 6k+ votes1y
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation.Email Address: Dylan@coast2 Someone had there thinking cap on, I'm a bit surprised, did the government outsource this? lol.
2 big standouts for me is:
The section on a wholesaler not being qualified to give a price opinion. That's big, very big, and it's so subtly tucked in there.
Arguably the top issue/complaint is "so n so said it was worth $____ and now I'm f'd, they lied to me" and it's been a thing of hiding behind the buyer-beware and whatnot. This removes that vail, at least to some degree.
Second is the teeth in it, yikes, it has the barrel loaded from get-go. Buyer/seller can automatically get legal fee's..... you know attorneys are gonna key in on this and offer "have you been burned by a wholesaler? We'll nail-em to the wall, give us a call, don't worry we'll even make em pay our fee's" and wouldn't ya know they charge $600 per hr, lol.
Be curious to see how it plays out, if and how quick other states adopt it over.
I like it.
Only viable work around is for the players who can close and hold property for what is a very reasonable short time, so they protected flippers in it.
I like it.
- Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes1y
Quote from @James Hamling:
Quote from @Jay Hinrichs:
@James Wise@Russell Brazil@James Hamling@Don Konipol
read below this is the disclosure that MUST be on all marketing pieces written or on internet that Oregon wholesalers must provide the public. This law went into effect this week.. In addition the wholesaler must have a Wholesalers license which requires Insurance and a bond much like a contractor. No test required though like a RE agent..
Also note the carve out for those that might do land development.. where someone like me might tie up the dirt spend 10k or more ( usually though 50 to 100K) getting entitlements and flipping said contract to a builder developer.
this is clearly directed at the SFR wholesaler and this disclosure also must be presented to the seller of the property prior to the wholesaler going into contract or any equitable interest they may have to flip said contract or property.. Of course if they close on the property FIRST then market it this is not required.. But double close is not going to work either I know a lot wholesalers rely on the double close to get around the laws as well. be interesting to see if any of the wholesaler how to Gurus mention this to their Oregon students.
Only available to Cash Buyers who can close quickly. Buyer pays both (buyer's and seller's) sides of the closing costs. Offers to buy the rights to the purchase contract as written should be made "as-is", and without contingencies. No additional amendments will be made to the contract and assignment will not be subject to any additional conditions. RESIDENTIAL PROPERTY WHOLESALER WRITTEN DISCLOSUREThe person providing this disclosure is a Registered Residential Property Wholesaler. A Registered Residential Property Wholesaler is someone who markets residential property for which the wholesaler has only an equitable interest or an option to purchase and, at the time of marketing, has held such interest or option for fewer than 90 days and invested less than $10,000 in land development or improvement costs associated with the residential property.
A Registered Residential Property Wholesaler shall provide this disclosure:
• To any potential buyers and sellers before entering into a written contract for a residential property wholesale transaction;
• To any Broker or Principal Broker who is engaged to assist the property wholesaler in marketing or listing the property;
• To any Broker or Principal Broker who is assisting a potential buyer in purchasing the property; and
• In all advertising related to the property that is the subject of a residential property wholesale transaction.
The Registered Residential Property Wholesaler:
• Will only have or only has an equitable interest in the property being sold.
• Will not have or does not have legal title to the property and therefore may
not be able to directly transfer title to the buyer.
• Is not a licensed Broker or Principal Broker and therefore might not be
permitted to engage in professional real estate activity.
• Might not be a licensed appraisal specialist and therefore might not be
permitted to provide an opinion as to the value of the property.
DEFINITION OF EQUITABLE INTEREST A person who has an "Equitable interest” in a property means someone that has contracted with the current owner for the right to buy the property at a later date even though they don’t have legal title. The contract may allow the equitable interest holder to sell or transfer the right to purchase the property to someone else prior to close of escrow.
ASSIGNMENT OF INTEREST A Registered Residential Property Wholesaler may assign equitable interest to another party prior to closing for profit.
RIGHT OF CANCELLATION A seller or buyer who enters into a written contract for a residential property wholesale transaction may cancel the contract without penalty by delivery of a written notice of cancellation any time before 12 midnight at the end of the third business day after the receipt of the Residential Property Wholesaler Written Disclosure. The right of cancellation may not be waived. Upon cancellation, all earnest money or deposits shall be returned to the person who provided the earnest money or deposit.
CONSEQUENCES OF NON-DISCLOSURE TO SELLER If the Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller before entering into a written contract for a residential property wholesale transaction, the seller may terminate the contract at any time without penalty and retain any earnest money or deposit paid to the seller or deposited in escrow by the Registered Residential Property Wholesaler.
An escrow agent may disburse the earnest money or deposit to the seller without the need for separate written instructions from the Registered Residential Property Wholesaler if:
• The seller in writing asserts that the Residential Property Wholesaler Written Disclosure was not provided to the seller before entering into the written contract for the residential property wholesale transaction and demands disbursement to the seller of all deposits held by the escrow agent; and
• The seller has provided the escrow agent with a written release and indemnification against all liability arising from the disbursement of the earnest money and deposits to the seller.
LIABILITY FOR DAMAGES If the Registered Residential Property Wholesaler fails to provide a Residential Property Wholesaler Written Disclosure to the seller or buyer, and if the purchase and sale agreement is terminated as a result, the wholesaler shall be liable for damages incurred by seller and buyer.
LEGAL PROCEEDINGS AND RECOVERY OF COSTS In any mediation or arbitration proceeding or civil action between buyer and seller, between buyer and Registered Residential Property Wholesaler or between seller and Registered Residential Property Wholesaler that arises due to the Registered Residential Property Wholesaler’s failure to provide a Residential Property Wholesaler Written Disclosure before entering into a written contract for a residential property wholesale transaction as prescribed under this section, the prevailing party is entitled to recover all reasonable attorney fees, costs and expenses incurred at trial, on appeal, at mediation and at arbitration from the Residential Property Wholesaler.
How to file a complaint. If you believe a Residential Property Wholesaler has violated any governing statute or rule, you may file a complaint with the Oregon Real Estate Agency (OREA). OREA will review the complaint. In most cases, other people involved in the case, including the respondent, will be contacted. Based on the information received, OREA will determine whether to start an investigation.Email Address: Dylan@coast2 Someone had there thinking cap on, I'm a bit surprised, did the government outsource this? lol.
2 big standouts for me is:
The section on a wholesaler not being qualified to give a price opinion. That's big, very big, and it's so subtly tucked in there.
Arguably the top issue/complaint is "so n so said it was worth $____ and now I'm f'd, they lied to me" and it's been a thing of hiding behind the buyer-beware and whatnot. This removes that vail, at least to some degree.
Second is the teeth in it, yikes, it has the barrel loaded from get-go. Buyer/seller can automatically get legal fee's..... you know attorneys are gonna key in on this and offer "have you been burned by a wholesaler? We'll nail-em to the wall, give us a call, don't worry we'll even make em pay our fee's" and wouldn't ya know they charge $600 per hr, lol.
Be curious to see how it plays out, if and how quick other states adopt it over.
I like it.
Only viable work around is for the players who can close and hold property for what is a very reasonable short time, so they protected flippers in it.
I like it.
yup wholesalers will have to put on their big boy pants and actually own and control thier inventory.. I do this for others in the distressed asset business I create a funding mechinism for them to close and own and they will usually clean the house out and do a little work THEN put it on the market or broadcast it out to their buyers..
- 1yTroy GandeeBusiness MemberReal Estate Broker · Charleston, SC · Member since 2013 · 795 posts · 454 votes
There are essentially no assignment deals going on in Charleston any longer. At least not with residential properties. You can still assign commercial properties and vacant land, but not with anything residential. The attorneys have essentially been deputized by the REC. Any agent or attorney that assists with a "wholesale" deal could also be liable if they assist with the deal. The bill expressly prohibits agent from acting in or assisting with wholesaling.
My partner and I just started taking title a few years ago. It's not really been that big of an adjustment. Having to put some skin in the game tends to keep the bad actors out of the process. I'm not upset about the "ban" that we've seen. I just wish the bill was more clear. A lot of people have been trying to find loopholes and some less scrupulous attorneys are still closing these if they're arranged in a certain way.
- Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Troy Gandee:
There are essentially no assignment deals going on in Charleston any longer. At least not with residential properties. You can still assign commercial properties and vacant land, but not with anything residential. The attorneys have essentially been deputized by the REC. Any agent or attorney that assists with a "wholesale" deal could also be liable if they assist with the deal. The bill expressly prohibits agent from acting in or assisting with wholesaling.
My partner and I just started taking title a few years ago. It's not really been that big of an adjustment. Having to put some skin in the game tends to keep the bad actors out of the process. I'm not upset about the "ban" that we've seen. I just wish the bill was more clear. A lot of people have been trying to find loopholes and some less scrupulous attorneys are still closing these if they're arranged in a certain way.
I suspect the SC wholesaling law will be revised and materially changed before this is over with. Parts of it are vague, and I personally feel that some of it overreaches the state's authority to regulate. I guess we'll see, though. I know of a few people still doing it illegally.
That being said, I also dont think taking title is that big of deal, either. It's mostly the wholesalers who have no cash and no ability to get financing that are complaining.
- 1yTroy GandeeBusiness MemberReal Estate Broker · Charleston, SC · Member since 2013 · 795 posts · 454 votes
You're probably right @Patrick Roberts. And they've been the problem in the eyes of the REC. The term that was being used frequently was "equity stripping". Enough sellers complained that they were deceived and weren't aware the wholesaler wasn't their ultimate buyer and/or that they didn't approve of the assignment fee. They felt they were taken advantage of. Especially the lower-income folks.
It could be an overreaction now and calibrate later, but we'll see. I've personally not seen much of an effect to the market due to it. The wholesalers have been affected, but I don't think it's been too big of a detriment on flippers.
- Lender · Charleston, SC · Member since 2019 · 1k+ posts · 1k+ votes1y
Quote from @Troy Gandee:
You're probably right @Patrick Roberts. And they've been the problem in the eyes of the REC. The term that was being used frequently was "equity stripping". Enough sellers complained that they were deceived and weren't aware the wholesaler wasn't their ultimate buyer and/or that they didn't approve of the assignment fee. They felt they were taken advantage of. Especially the lower-income folks.
It could be an overreaction now and calibrate later, but we'll see. I've personally not seen much of an effect to the market due to it. The wholesalers have been affected, but I don't think it's been too big of a detriment on flippers.
Yeah, I've heard the equity stripping argument as well. I dont doubt that there were some predatory and unethical things happening, but my personal opinion is that more govt red tape/intervention isnt the answer. My guess is that a lot of the bad actors could be sorted out with tort suits by skilled attorneys. I suppose time will tell wehther the wholesale law withstands scrutiny.
I think the market slowdown would likely have put a major dent in wholesaler fees even without the new law.
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