Wholesaling as a Licensed Agent

Wholesaling
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Wholesaling as a Licensed Agent

William Hairston
Member since 2021 · 1 post · 0 votes

Hello everyone,

I am constantly getting conflicting opinions on this and would appreciate any insight as I am seeking legal advice as well (attorney recommendations are appreciated!). I have completed the process to obtain an agent license in NJ and become a Realtor part-time. I wanted to get it to help with my investing goals and wholesale some deals to cash buyers. In NJ I know it is not illegal to do an assignment with the correct contract, you don't need a license to wholesale, and I think that a standard NJ realtor contract is not assignable.

When I find a sponsoring brokerage I do plan on fully disclosing to a seller that I’m an agent with no interest in listing their property or entering into any kind of agency agreement with them and that I will be working with a group of investors looking to buy their property for all cash. From what I gather some say be careful you aren’t doing a net listing (which I will not be), a broker may not allow me to wholesale/assign contracts in their brokerage, or that you just can't wholesale as an agent.

I am currently holding my license without any sponsoring broker because of this, and it is my goal to wholesale my first deal before my license would expire but I do not want to give up my goal especially if I can do both. Can someone elaborate more on this?

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  • Zambricki Li
    Real Estate Agent · Los Angeles CA + Lake Tahoe, NV and CA · Member since 2021 · 180 posts · 158 votes
    4y

    Be careful, I would try and get the listing and maximize my sellers return on the MLS. Or actually find a real buyer. Most people don't even realize they are selling to a wholesaler until the closing table which is a grey area for agents. One workaround would be do it as a referral fee/finders fee with one of the parties. Just thoughts from me this is a real estate attorney question.

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  • Ronnie Galindo
    Realtor · Napa, CA · Member since 2018 · 112 posts · 77 votes
    4y

    @William Hairston, Hey man, Congrats on your license! I am a RE agent with eXp and I have had that same conversation with my brokerage. So the going opinion with brokers is that they would not be supportive of wholesaling because of the liability. When you are an agent, you are a fiduciary for that seller. Meaning that you have to look out for the best interest for your clients. Even though you are not taking the seller on as a client, you still owe the seller due diligence and when it comes to wholesaling, people see this as a negative action because you are telling this person you will sell their home but if you cannot find a buyer, there is no recourse for you. Only the seller loses.

    My brokerage had a partnership with another company that will buy distressed properties that I can send them to and get a referral fee but it is not as much as I would wholesaling. There is another way though. There is a process called a "double close." What this is, is when you "buy" the property, then sell it right to your buyer. So you are able to "own" the property when you sell it to your buyer. You can do it without using your money if you have everything lined up. It is a very strict procedure through. I would say just check with your brokerage and do not be surprised if they are not in support of wholesaling. I hope this helps! 
       

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