Can I sell someone else's house for them legally w/o a license?

32 Replies

We do some flips and wholesale's and so far have had a lot of success just posting on Facebook and in Facebook groups. We were recently approached by another investor friend who is not big on his following with Facebook and asked if we would try to sell his property for him. 

He would pay us a commission if we could bring him a buyer. We are posting it and taking people through it right now but we will not be involved in any of the purchase agreements or negotiations. We have another seller who contacted us looking to see if we could do the same thing. Before we start talking about this option for potential sellers, is this even legal if someone doesnt have their real estate license? 

I don't know about Wisconsin but you cannot where I am (TN). You can't even manage someone else's property without a license. Maybe find an agent that can be of record and work out some kind of private payment for your individual efforts, especially if the agent will take a reduced cut. 

Sounds illegal. That is an agent's job. Don't fall for guru garbage and FRAUDSTERS that try to get around laws. They are .01/dozen on BP.

In most and probably all States, you have to have a license to make commission selling other people's real estate. 

Probably the best way to do it is to either: 1) get a fixed price for advertising, not related to the asking price, so it is not a commission. You should find out whether an online magazine that advertises real estate is required to have a real estate license. And let the owner do the walk throughs. Or, 2) get your real estate license and align with an independent broker. 

A good place to find out what you can do would be the Wisconsin Department of Real Estate. Real estate law is handled at the level of the state.

Man @John Thedford , I gotta set my BP to "follow" you. I love your posts!

Hmm. How do you "follow" someone? I'm soy seeing that option? Do you have to "connect" with them first?

If you did not need a license to sell real estate and make commissions.. then simply ask yourself

WHY is there a department of real estate in all states in the Union and most countries.. Why is there a real estate industry at all.. .why not be like China no license required and a free for all

from what I know Wisconsin is actually one of the tougher states to do this in.. some states pretty much don't care not that its legal but they just don't care much.. others like  OHIO... FLA  CA  OR WA etc they care you get turned in your going to get busted and fined and get a cease and desist on your record. do it enough and you get a felony.. Don't listen to those that say U can do it .. not very good advice at ALL>

Could this not be considered a type of wholesale?

@William Carr yes it could be considered a type of "Wholesale" but that does not make it legal. In most if not all states you can structure a wholesale deal to do it in a legal fashion. The way it is described above is pretty clearly illegal in ALL states.

@Ned Carey I suppose it's my lack of experience but with the information given. But I don't see why this couldn't be a wholesale deal. Could you explain further?

@William Carr He's not buying the property, or even going under contract.....just finding a buyer for the seller.

I am a Wisconsin Broker, and if you preform the duties of marketing,  or facilitating the transaction in any way for another and for a fee or something of value a license is required. 

By accepting compensation you would be committing a civil offense, per WI Chapter 452 as pointed out above. You could go to jail for up to 6 months, but probably wouldn't. You could be fined up to $1000. This assumes someone complained and the District Attorney (DA) went after you. Then they would need to prove that you received compensation or gain.

I have sold (actually advertised and help sell) property for others, without a license, but without any compensation or expectation of gain. What's even more interesting is that one of those people was a licensed NC attorney. But again, I had no compensation or expectation of gain. I had really good SEO and helping someone else out was not inconvenient... just a simple database entry.

In my mind, the "goodwill" factor (not by the financial 'goodwill' definition) is an intangible asset that a DA couldn't touch. But if you are set on getting paid, then the above posters have answered your question.

Thank you guys so much! Yea, we were just trying to help a friend because we have a solid following on Facebook. Our thought process was that if we don't actively participate in the contract part of it, that we would be more looked at as a marketer or advertiser rather than actually selling the property for him. He would do all the negotiation, contracts, etc. we would simply try to generate some interested buyer leads for him. So from what everyone seems to be saying, even generating interested buyers for someone else is not legal unless you are licensed? 

In the case you described you are only being paid to advertise, send leads to the seller, and when one of your leads results in a sale you get paid; you are not being paid to draw up contracts and act act a commissioned salesperson with prospective buyers. If you position the agreement as purchasing ad labor, likely yes you can advertise it legally as a sole proprietor. Essentially you are simply a freelance marketer.

@William Carr Wayne Brooks already answered but I will expand on that.  It depends in part by how you define wholesaling.  Personally I would call this bird dogging.  

The distinction is whether the person finding the buyer has the property  under contract. No contract and I would consider that Bird Dogging. If you do not have a license, and you do not have the property under contract, what was described in the original post is "Illegally acting as a broker without a license. I have not read every state brokerage statues but I think it is safe to assume that this would be illegal in all 50 states without any question whatsoever. 

I will use driving as an analogy. It is legal to drive a car. But you can drive a car in an illegal fashion; speeding or running red lights for example. 

This could be structured in a way that was legal. It the middle man puts the property under contract, He could double close or perhaps assign the contract.  I say perhaps because whether that is legal is a complex issue and there are many threads here about the legality of wholesaling. I am not going to rehash them here.

Originally posted by @Carrie Reyment :

Thank you guys so much! Yea, we were just trying to help a friend because we have a solid following on Facebook. Our thought process was that if we don't actively participate in the contract part of it, that we would be more looked at as a marketer or advertiser rather than actually selling the property for him. He would do all the negotiation, contracts, etc. we would simply try to generate some interested buyer leads for him. So from what everyone seems to be saying, even generating interested buyers for someone else is not legal unless you are licensed? 

 You COULD advertise his house for NO compensation. I would suggest putting his contact info in the ad stating he wants to sell his house. I believe this MIGHT be legal because you are NOT advertising the house with your info, but only trying to help your friend. I believe advertising it, for compensation in any form, sounds like brokering which is not legal without a license. The only way to get compensation otherwise might be if you owned a magazine and HE purchased the advertising. That is not brokering. Licensed brokers from your state might want to chime in. I am NOT giving legal advice, just an opinion. 

There is a company here on the West coast that does this.. they have a hybrid and they just sell advertising.. so if you want to sell your facebook space for a set fee regardless of if it sells or not.. you should check with your state to be sure .. but like others have said your acting as a magazine or Zillow or any other marketing type companies.. the second you engage buyer and seller in negotiations or for commissions .. in all states you need license.. if its walks like a duck quacks like a duck its a duck.

Thanks @Jay Hinrichs ! Yea that was kind of the way we viewed it, simply advertising for the friend. I don't anticipate this being something I really want to do much anyway (advertising other peoples properties) simply because I could focus that same time on finding my own deals, investors, or buyers for my own properties but I want to make sure we are always doing things the right way and was not sure on this particular case that came up. 

Hi

I can tell you this , in the state of New York it is illegal to receive money as a agent , without being licensed by the state .

So is Wholesaling not legal?  

Originally posted by @Jennie O. :

So is Wholesaling not legal?  

 Jennie, it depends on your definition of wholesaling, the specific facts of the situation, and the state you are in. 

If the above puts you in the state of confusion you are probably not ready to wholesale LOL

Originally posted by @Ned Carey :
Originally posted by @Jennie O.:

So is Wholesaling not legal?  

 Jennie, it depends on your definition of wholesaling, the specific facts of the situation, and the state you are in. 

If the above puts you in the state of confusion you are probably not ready to wholesale LOL

 LOL State of Confusion

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