Do you have to disclose being an Agent while wholesaling.

Gilbert, AZ · Member since 2013 · 9 posts · 1 vote

So my partner and I are new investors in the wholesaling and we are both Real Estate Agents. Do we have to disclose that we are Agents?

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Michael Galloway

Real Estate Investor · Lafayette, CA · Member since 2010 · 179 posts · 71 votes

13y

Originally posted by Bill Gulley:

As a Realtor, the highest price may well be with an investor, especially for one that can't be retailed. :)

I completely agree with this statement. Too often i see sellers who's agents end up making the only money left in a property.

With Real Estate they say "location,location,location"

with Contracts i say "disclosure, disclosure, disclosure" this is one of your main insulators for this type of transaction.

Erin, if you're ever not sure... disclosure

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Steven Hamilton IIPro Member
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
13y
Hi Erin and welcome to BP.
You will find a wealth of information here.

The one thing I will say is that it bothers me when I see realtors wholesaling. Isn't it their job to make sure they get top dollar for their clients rather than pad their pockets on a spread. It just seems to me as though it is a large conflict of interest.

-Steven
[email protected]224-381-2660
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Justin Morgan
Flipper/Rehabber · St. George, UT · Member since 2010 · 212 posts · 114 votes
13y
Disclosure, Disclosure, Disclosure!!!

I am not sure about AZ realtor code of ethics but national boards would suggest DISCLOSURE!!!

Really there is no reason NOT to disclosure... unless your hiding something.

I ALWAY try to over disclosure.

When you meet with the seller for the first time I suggest saying something like... "Mr. selller I'm a real estate investor looking to buy your house, that is why I am here. But I'm also a licensed realtor. Right now I'm not looking to list your house I want to buy it. Maybe later we can discuss listing but right now I'm a investor buyer."

THEN... the funny thing is if you do not buy the house you can have the LISTING conversation or refer the property that you are not going to buy... a little extra CASH to the bottom line and DISCLOSURE!!!

Hope that helps!!!
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Ben Leybovich
Rental Property Investor · Phoenix/Lima, Arizona/OH · Member since 2012 · 4k+ posts · 4k+ votes
13y
YES, YES, YES, YES. As agents, we have to disclose everything. Wholesaling more than anything else can get you in trouble, even if you disclose, due to Ethics! Be careful
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
As a Realtor, the highest price may well be with an investor, especially for one that can't be retailed.

Yes, you are required to disclose your agency/license at the first opportunity when acting for yourself or as an agent in any real estate activity. It's spelled out with the BOR and in state law.

The reason for disclosure or the spirit of the law is to provide the public of your expertise in the area of real estate that another person may not have, you are seen as the expert and disclosure is giving notice of you having greater knowledge than an average person you may be dealing with. It is intended to protect the public so they know who they are dealing with and what relationship you are dealing in, as an agent or for yourself. :)
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Depending on Az reg.s, you must acknowledge somewhere between first contact and substantial negotiations. As to a conflict, I guess it's who contacts who. Obviously of a homeowner contacts you sell their property, you can't "deal for yourself", as in wholesaling/flipping.
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Justin Morgan
Flipper/Rehabber · St. George, UT · Member since 2010 · 212 posts · 114 votes
13y
Steven Hamilton II Every one loves to "pad their pockets" but winning in business is about creating win-win deals. As a realtor I have more tools that make me money on many sides.

Certainly I could pad my pockets but I'm building a business not just doing a deal, and sometimes listing a home is better for the seller and less money for me. Sometimes they need QUICK cash and we "pad our pockets".

Both sides of the coin are a payday. Not every seller wants top dollar, MANY sellers want the home sold FAST and a typical closing takes time and sometime money, money that some sellers do not have.

When you disclosure there is never a conflict of interest... see my disclosure above! What do you think about it?
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Account Closed
Member since 2012 · 55 posts · 12 votes
13y
Do you plan on acting as a wholesaler and as a real estate agent simultaneously?

Contact your state's real estate commission and ask them.
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Michael Galloway
Real Estate Investor · Lafayette, CA · Member since 2010 · 179 posts · 71 votes
13y
Originally posted by Bill Gulley:
As a Realtor, the highest price may well be with an investor, especially for one that can't be retailed. :)

I completely agree with this statement. Too often i see sellers who's agents end up making the only money left in a property.

With Real Estate they say "location,location,location"

with Contracts i say "disclosure, disclosure, disclosure" this is one of your main insulators for this type of transaction.

Erin, if you're ever not sure... disclosure
2 Reply
Steven Hamilton IIPro Member
Accountant, Enrolled Agent · Grayslake, IL · Member since 2011 · 5k+ posts · 2k+ votes
13y
Justin Morgan,

I understand the realtor side of things. A family member is a realtor and she is very busy.

I feel that its a very fine line.
[email protected]224-381-2660
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
13y
Originally posted by Steven Hamilton II:
The one thing I will say is that it bothers me when I see realtors wholesaling. Isn't it their job to make sure they get top dollar for their clients rather than pad their pockets on a spread. It just seems to me as though it is a large conflict of interest.
-Steven
Steven, let me point something out here. If Erin finds a seller and she is the buyer and she is Not representing the seller in any capacity, then Erin locates a buyer and wholesales that deal to the buyer (of which she does not represent), then A, she has zero conflict of interest, B she is not padding her pockets as she is Only getting a wholesale fee just like any other wholesaler and no RE commissions in the transaction.
Now, if she had any fiduciary responsibility to either party, then I would agree with you.
Erin, Yes, you should disclose your agent status. What reason would you hold that back? Of course, said disclosure can be during escrow period with other disclosures and escrow docs.

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Joel OwensBusiness Member
Moderator
Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
13y
Regardless of representation of a client with fiduciary duties written or implied or performing ministerial acts you MUST disclose you are an agent or broker.

Even if you are not a REALTOR and the CODE OF ETHICS do not apply to you there is probably a disclosure law on the books for your state real estate commission that you have to abide by.

Bill had it dead on in that as a broker or an agent you are trained in contracts and real estate and are supposed to be informed on a higher level then the average joe selling their property.

If you tell the buyer or seller that you are a broker or agent or acting as a principal in a deal and they do still not want representation for themselves then at least you have given the required disclosure and it will be harder for them to claim they were duped later on.
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Erin Fischer
OP
Gilbert, AZ · Member since 2013 · 9 posts · 1 vote
13y
Thank you all for your feedback. We are planning on disclosing We just weren't sure if it should be on the Intent to purchase contract or after acceptance.. I'm assuming right away. At Steven we all have are own goals but as far as conflict of interest I don't believe that what we are doing! Thanks again everybody ;)
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Wayne Brooks
Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
13y
Again, in Fl and I assume it's similar elsewhere, the disclosure must made Before you enter into any negotiations, if not at at initial contact, and certainly Not after offer acceptance.
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Arktavious Sally
Real Estate Investor · Upper Marlboro, MD · Member since 2008 · 289 posts · 80 votes
13y
Erin Fischer Yes disclosure is a must... I recently wholesaled a deal to rehabber who is also an R.E agent. I'm finding more and more R.E agents are also doing Fix/Flip deals in my area.
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Ramon Jenkins
Real Estate Agent · Milwaukee County, WI · Member since 2009 · 3k+ posts · 525 votes
13y
Welcome

Probably the 11th person to say it
“ Disclosure, Disclosure, Disclosure… Disclosure “

Initial communications, etc -> D.i.s.c.l.o.s.u.r.e

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