Clarification of California Real Estate Law

Clarification of California Real Estate Law

Rental Property Investor · Sedona, AZ · Member since 2018 · 260 posts · 141 votes

I'm an aspiring real estate investor who is taking an online California real estate license prep course. My goal in earning my license is to do things like obtain access to the MLS, lock box access so I can tour properties on my own, etc.

I'd also like to be able to generate leads for properties, probably through an online advertising strategy. My website and online ads would have messaging saying something like "We buy distressed properties. Contact us today."  There will be more info than that, of course, but hopefully you get the idea. 

However, while reading my exam prep materials today, I see the following:

    "Anyone who is not a California licensed broker may not legally solicit California residents."
    
Source-

I know the requirements to become a broker are much more strict than the requirements to become a real estate agent (more hours of class time, a 2-year full-time industry employment requirement, etc.).  Therefore, the fact that the courses uses the term "broker" here (as opposed to "agent") has me concerned.

Question- Does the above quote mean that I'll have to become a full-fledged California broker before I can place the kinds of ads I mentioned above?  Or can I do so as a simple real estate agent?

Note- I will of course be disclosing the fact that I'm an agent to any potential sellers when acting as a buyer/investor. I'm aware of the ethical and legal rules that come up when agents buy properties from sellers, and I fully intend on operating above-board and making all required disclosures.

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  • Dylan VargasPro Member
    Rental Property Investor · Chico, CA · Member since 2016 · 633 posts · 336 votes
    7y

    @Richie Thomas Welcome! Buying a distressed house or house in general is much different than "I am asking to sell your house" as a Realtor does. Wholesalers and such "assign an interest in a contract"  so they are not selling a property they own. Anyone can buy and sell a house (by owner) or property. Not anyone can list and sell a property for someone else and advertise the home thus acting like a real estate agent (hence you must be licensed). Hope this makes sense. Good luck and keep us posted.

  • Rental Property Investor · Sedona, AZ · Member since 2018 · 260 posts · 141 votes
    7y

    Thanks @Dylan Vargas.

    So to confirm that I understand you: if the real estate agent is also the principal buyer, they don't have to disclose that they are an agent?

    I ask because I'm seeing information elsewhere which contradicts the above statement:

      If the agent is a Realtor - a member of the local, state and National Association of Realtors - it is a requirement of the Code of Ethics that a Realtor disclose their Realtor status when buying or selling for their own account.

    Source- https://www.trulia.com/voices/Home_Buying/do_the_real_estate_agent_buy_a_property_has_to_dis-274906

  • Dylan VargasPro Member
    Rental Property Investor · Chico, CA · Member since 2016 · 633 posts · 336 votes
    7y

    @Richie Thomas If the realtor is the buyer and the real estate law says they need to disclose they are a Realtor then yes, they must disclose they are a Realtor. I would always assume you must disclose you are a Realtor in every situation just to cover yourself. My response was basically saying anyone can buy and sell real estate. Not anyone can advertise selling real estate for other people as they would be acting like a realtor and need to be licensed. Once you are a Realtor then you probably have to disclose this on every real estate related activity you take part of. So we are kind of talking about two different things here. Make sense?

  • Rental Property Investor · Sedona, AZ · Member since 2018 · 260 posts · 141 votes
    7y

    Yeah I agree, it seems safest to just disclose by default.  Thanks for your quick responses!

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