Real Estate Investor · Roselle, NJ · Member since 2016 · 16 posts · 0 votes
Hey there fellow investors, I am new to wholesaling and just wanted to see if anyone knows if it's illegal to wholesale in NJ, also, does it require a license of any kind. My understanding is no to both questions but just want to confirm as I have heard conflicting opinions on the matter. Thanks for the help!
it's only illegal if one of the parties in the deal gets mad, contacts the RE commission, and they decide you were acting as an agent without a license
contracts are assignable by default and nature its just one of those things where people dont understand and sometimes spread false information about it being available.
@Antonio Pantano - thanks for that input. He's right it states, and im paraphrasing, "Contract is not assignable unless written agreement is given by seller". You have a few options here, next to Buyer name write "and/or assigned" (this is a written agreement and is recognized by law), cross out the clause that states "Not Assignable" and sign with Buyer and sellers initials, add another clause that states that "buyer reserves the right to assign all obligations and rights of this contract", or use an assignable contract. Only need to choose one of the options.
It is legal to assign contracts as long as your contract does not limit your right to do so. If your contract happens to have a "No Assignment" provision, you can use creative deal structuring, such as an LLC transfer, to get the deal closed.
Even if a contract says it can't be assigned, very few sellers who enter into an agreement of sale will care if it's assigned. They just want their money. Of course it's always safer to have the proper language but if it's something you may have overlooked it's probably not going to be a deal breaker.
it's only illegal if one of the parties in the deal gets mad, contacts the RE commission, and they decide you were acting as an agent without a license
I've been doing a lot of reading and I can't say enough thanks for the information all of you are providing. I've dusted off my RE license and I'm trying to find my way through intensive reading on this subject and I must admit i'm rusty and have forgotten some things. In reading the standard NJ RE contract, where do you put the contingency clause to back out if you can't find a buyer? Should you have a list of buyers already on deck before entering into the agreement?
Hi all!! I know this is an old thread, and hope someone will read this. :) If it's ok to wholesale in NJ, and use the proper assignable contract, do you tell you seller what your intentions are? I Me as an honest person, would disclose that I would sell/assign the contract to someone with more rehab experience to finish the deal. I'm sure I'm too honest for my own good, but I'd love some input on this. Thanks in advance!!
@Christine Johanns that's a personal question. There's many varying possible degrees of disclosure. If a seller is willing to sell at your price and you can find someone willing to buy it from you with no work done at a higher price is it morally wrong not to tell the seller as much? Is it morally wrong for Wal-Mart not to tell you the price they paid for the paper towels you purchase from them? From your perspective maybe you couldn't sleep at night without knowing you didn't tell them every detail of the deal, but I don't think it would make you dishonest for not telling them. Personally I'd tell them for the peace of mind, but maybe more importantly because there's no telling that if they later found out that they may try to seek legal recourse of some kind. Though it's unrelated to what you asked I should probably mention in assigning real estate contracts you run into the age old claim of brokering without a license. If it were me I'd rather buy the property outright and resell.
@Antonio Pantano is correct section 37 of the standard NJ contract in NJ says "No Assignment: This contract shall not be assigned without the written consent of the seller. This means that Buyer may not transfer to anyone else Buyer's rights under this Contract to purchase the Property"
I cross this out in all my contracts before having the contract signed by the buyer and seller (the original buyer).
as a wholesaler you got something UC and you are trying to find a buyer
what happened if you are trying really hard to find a buyer but when the time where the contract expires is coming up and you didn't have a buyer to sell
what's happening now
you just don't show up to closing (just kidding)
You lose your deposit and keep going to the next deal
@Michael Smith this is where wholesalers can get a bad wrap. You entered into an agreement to buy a house. You should honor that agreement. If you were honest with the seller of your intentions, explaining that you are not the buyer, but assuming, tell them you did not find a buyer. Most wholesalers will tell you to add in language about "partner approval", "inepsctipn" etc... things that aren't real but may allow you an out. They will also tell you to put down little to no money as a "deposit", so if you walk you only lose pennies.
I don't necessarily agree with many of these tactics, but they seem to be the norm for that business model.
you mention that you can add like partner approval
Worst came to worst you have to show something to prove you are right like you gotta have a partner in place to say that no, or just say that's the story?