Is wholetailing legal in Illinois???

Question

If it’s legal, would it be as simple as putting a disclosure into my contract allowing my realtor to put the property on the MLS?

Not sure how that works, anyone doing it in Illinois please respond here

Crystal Smith · Answer

Those putting properties under contract, with the intent of assigning the contracts, will need to be licensed in your brokerage if they do more than one assignment per year.

Jonathan Klemm · Answer

@Josh Heller - You definitely do have to be a licensed managing broker to open up a brokerage here in chicago illinois.  I am going through that process now.  We are going to be looking at working with real estate investors and doing wholesaling.

Let's connect and see if there might be a good fit for the time being til you get your managing brokers license.

Josh Heller · Answer

@Eric M.

Hey I saw a post about wholesaling in Chicago that you asked a bunch of questions that I had myself and I was wondering if you ever got any answers. I am looking at potentially opening a brokerage in Chicago to Wholesale. But was wondering if everyone in the company needs to be licensed or how that works

Eric M. · Answer

The thing about the parties being ok with it ignores the MLS. They are one of the parties who will have a problem with listing properties you don't own. Are you getting their ok?

Wholetailing is now illegal per se, but there are certainly ways to make it illegal...and if you are violating MLS rules when you do it, you will run into problems. More importantly your Realtor is risking his license.

Marco Calderon · Answer

I’m already wholesaling George, the question is about “Wholetailing”.

So Bob if it’s disclosed and all parties are okay with it, i should be able to do this?

I know ppl are doing this in Chicago I’m just not sure how they’re structuring the deals

Nick C. · Answer

Every MLS has different rules, your best bet is to go to the source and see if your MLS will allow it.

The legalities of wholesaling are going to be argued until the end of time, so I won't bore you with my opinion on that. But if you list the house for sale with pictures on a public forum like that I would think it's going to be pretty hard to convince a governing body that you're just assigning a contract and not practicing real estate without a license.

George Skidis · Answer

Disclaimer: Not a real estate agent. Not an Attorney.

Correct me if I am wrong but I think it is illegal to list a property on MLS to which you do not hold a clear title. The word Fraud comes to mind for some reason.

Wholesaling is not illegal. However, get a good real estate attorney on your side to avoid being prosecuted for things like; acting as a real estate agent without a license, attempting to sell real estate to which you have no title. You know the stuff everyone else gets in trouble for.

Make sure your purchase contract has the correct language allowing the closing to be done by you or your assigns.

If you want to be a wholesaler you need to have two lists. A Buyers list and a Sellers list. Until you have those in place it can take a long time to wholesale a property.

Bob Floss II · Answer

@Marco Calderon Wholesaling and wholetailing are not illegal in Illinois. However, people have gotten into trouble. The misconception comes from the execution and not the concept. The best rule of thumb I give my clients is disclose everything. As long as all parties understand, there shouldn’t be an issue.

It also helps to have all your paperwork in order so your process is transparent and the title company can clear title.

Michael Van · Answer

Bump. Would like to know the specifics about it as well. Thanks.