Can a wholesaler hire a realtor to list property on MLS

Member since 2019 · 72 posts · 21 votes

Hello everyone, I was told you can hire a broker to list a property on the mls when having it under contract. I am wondering if there is a way to check if it’s allowed in other markets. I am in Los Angeles and I heard it’s not allowed in California but in Pensacola it’s apparently allowed? Anybody have more info on this? Thanks!

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Korey Rademacher

Investor · Pensacola, FL · Member since 2015 · 48 posts · 31 votes

Documentation is key. Communication is also crucial in my opinion. The wholesaler needs to have certain documents for the owner to sign off on. And for me personally, I also want there to be open communication between me, the wholesaler AND the owner. If I have a wholesaler wanting me to only show the property at certain times because they are clearly trying to do something without the onwers knowledge, I won't touch it.

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Korey Rademacher
Investor · Pensacola, FL · Member since 2015 · 48 posts · 31 votes
3y
Yep, it's certainly allowed here in my market, the Pensacola area. I've done it for several wholesalers.
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Adam MaciasPro Member
Real Estate Consultant · Fort Collins, CO · Member since 2022 · 285 posts · 178 votes
3y
Quote from @Korey Rademacher:

Yep, it's certainly allowed here in my market, the Pensacola area. I've done it for several wholesalers.

Wow, it's illegal in most states because the property is not owned by the wholesaler. The wholesaler is not the owner of the property. AND the wholesaler is not representing anyone in the transaction. I can see if the wholesaler tried moving a property already on the MLS. Interested how different markets work.
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Will BarnardPro Member
Moderator
Developer · Santa Clarita, CA · Member since 2008 · 15k+ posts · 10k+ votes
3y
Quote from @Korey Rademacher:

Yep, it's certainly allowed here in my market, the Pensacola area. I've done it for several wholesalers.
How can any licensed real estate agent in any state list a property on the mls without the seller signing a listing agreement in which he or she has ownership of the property and signing authority to sell the property? I find this difficult to believe, although FL has had some very loose rules regarding real estate in the past.
If the wholesaler is double closing and buying with cash or financing, closing, taking title, then you immediately list for sale, then yes. Without having name on title, you can’t list a property you don’t own.
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Korey Rademacher
Investor · Pensacola, FL · Member since 2015 · 48 posts · 31 votes
3y
Documentation is key. Communication is also crucial in my opinion. The wholesaler needs to have certain documents for the owner to sign off on. And for me personally, I also want there to be open communication between me, the wholesaler AND the owner. If I have a wholesaler wanting me to only show the property at certain times because they are clearly trying to do something without the onwers knowledge, I won't touch it.
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Jesse LeBlanc
Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes
3y
Clearly state that in your contract the seller signs which can give you permission to list.

DONE. Be transparent, be honest. It can be one of your exit strategies if you aren't finding your buyer first (which you should) but if you're transparent with the seller and it's in your contract then you're good.

It doesn't however mean that an agent or broker has to allow it, but many will.
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Jay Ben
OP
Member since 2019 · 72 posts · 21 votes
3y
Quote from @Jesse LeBlanc:

Clearly state that in your contract the seller signs which can give you permission to list.

DONE. Be transparent, be honest. It can be one of your exit strategies if you aren't finding your buyer first (which you should) but if you're transparent with the seller and it's in your contract then you're good.

It doesn't however mean that an agent or broker has to allow it, but many will.
Thanks Jesse. What do you mean by finding a buyer first? You don’t think I could get more if I put it on the market and got more visibility?
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Jesse LeBlanc
Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes
3y
We talked on the phone, but didn't want this to appear as if I didn't reply. :)
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Micah Lynell MortagBusiness Member
Real Estate Agent · Atlanta, GA · Member since 2021 · 35 posts · 25 votes
3y
Seems high risk for a broker to not have direct permission from the seller to list their property even if it is legal or allow with the MLS. In addition, there would have to be ALOT of room in the numbers to get everyone paid and make it mutually benefitable to all parties. Cost to benefit doesn't seem to be worth it, but just my initial thoughts!
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
If you have a sellers rep agreement I believe you can do it
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Doug P.
Investor · Kitchener-Waterloo, Ontario · Member since 2008 · 1k+ posts · 1k+ votes
3y
@Jay Ben This depends on the MLS. Each MLS is maintained by the local real estate board. Some allow contracts to be listed while others don't. Here in Ontario every MLS I've interacted with has an option for brokers to list a contract as an "Assignment Sale".
As others have mentioned it's illegal in every state/province for you or your agent to list the property for sale when you only have it under contract. But you may be able to list the contract for sale.
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Daniel PaloscioBusiness Member
Lender · Tampa, FL · Member since 2013 · 228 posts · 95 votes
3y
Quote from @Jay Ben:

Hello everyone, I was told you can hire a broker to list a property on the mls when having it under contract. I am wondering if there is a way to check if it’s allowed in other markets. I am in Los Angeles and I heard it’s not allowed in California but in Pensacola it’s apparently allowed? Anybody have more info on this? Thanks!

@Jay Ben I would be very careful with this. CA has some very strict rules and restrictions on this topic. If this is a direction you want to go with you should look into novations. A lot of my clients are using novations to get properties listed on the MLS that they do not own. What's great about novations is that you avoid double closing and spending money on closing costs 2ce.
I noticed your location is in St Pete, FL. I'm based out of Tampa, looks like we're neighbors!
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Max Prezio
Real Estate Agent · Pennsylvania & Delaware · Member since 2021 · 6 posts · 1 vote
3y
I see a lot of this in Pennsylvania. Certain verbiage is included in the listing and it's clear it is an assignment sale. Alot of times they dont post them on the IDX feeds so it stays on the MLS.
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Max Prezio
Real Estate Agent · Pennsylvania & Delaware · Member since 2021 · 6 posts · 1 vote
3y
Quote from @Daniel Paloscio:

Quote from @Jay Ben:

Hello everyone, I was told you can hire a broker to list a property on the mls when having it under contract. I am wondering if there is a way to check if it’s allowed in other markets. I am in Los Angeles and I heard it’s not allowed in California but in Pensacola it’s apparently allowed? Anybody have more info on this? Thanks!

Can you explain the novation vs assignment?

@Jay Ben I would be very careful with this. CA has some very strict rules and restrictions on this topic. If this is a direction you want to go with you should look into novations. A lot of my clients are using novations to get properties listed on the MLS that they do not own. What's great about novations is that you avoid double closing and spending money on closing costs 2ce.
I noticed your location is in St Pete, FL. I'm based out of Tampa, looks like we're neighbors!

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Daniel PaloscioBusiness Member
Lender · Tampa, FL · Member since 2013 · 228 posts · 95 votes
3y
Hey @Max Prezio I just responded to your message but wanted to make sure I responded in here too.

So novations are very similar to an assignment agreement where the person that takes the novation actually steps into your shoes and closes the deal with the seller. Without going too far down the rabbit hole, where novations differ is once the novation is executed it becomes the new contract, direct between the end buyer and the seller.

The podcast at the link below explains how they work and how to use them to list properties under contract on the mls

https://motivated-leads.libsyn...

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Russell BrazilBusiness Member
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Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
3y
Not in any of the MLS systems I am a member of. But I wouldnt be surprised if you could in Florida, as they are also the only state that allows net listings I believe.
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Drew K.
New to Real Estate · Jacksonville, Florida. · Member since 2022 · 23 posts · 7 votes
3y
Quote from @Jesse LeBlanc:

We talked on the phone, but didn't want this to appear as if I didn't reply. :)

I am needing help with this as well. How can I find cash buyers in my market?
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Jesse LeBlanc
Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes
3y
@Drew K. one GREAT way is to look up public records or something like Propstream in the area you market to. For example, if you have a zip code, or neighborhood or street you like, look up previous buyers in the same area then skip trace to talk to them. Once you do, tell them who you are, what you're doing and that you want to work specifically for them to locate more houses similar to the one they just bought. Then build the rapport from there, get their criteria and start locating more properties for the buyer. Do that multiple times, get a SOLID handful or two, focus solely on those few solid buyers and start finding sellers. It's MUCH better than having a huge email list filled with names and numbers who aren't buying or your emails go to spam.

Buyer First, saves you so much time and headache.

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Nate Sanow
Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
3y
They used to do it here in Tulsa / Oklahoma and I’m glad it seemed to stop when our new law came out. I’m not anti wholesaler I’ve done it in the past, but I think the mls part… it’s just not ideal for anyone.
that’s not just a critical statement but for your sake, you will get a lot more tire kickers and people with financing types that won’t work for wholesale.
Why not focus on building a strong buyers list, relationships with other wholesalers / agents that can help bring buyers Aka “dispositions” ? I’d really focus on that.
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Dahlia KhalafBusiness Member
Member since 2018 · 71 posts · 42 votes
3y
@Jay Ben this will all depend on your state laws where you live...
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Eliott Elias
Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes
3y
It's allowed, you just have to get a title office what will understand this transaction and the seller to sign a listing agreement stating they will get anything under what you have it under contract for
1 Reply
Alyssa Dyer
Rental Property Investor · Oklahoma City, OK · Member since 2017 · 1k+ posts · 694 votes
3y
Quote from @Jay Ben:

Hello everyone, I was told you can hire a broker to list a property on the mls when having it under contract. I am wondering if there is a way to check if it’s allowed in other markets. I am in Los Angeles and I heard it’s not allowed in California but in Pensacola it’s apparently allowed? Anybody have more info on this? Thanks!
A little late to the party here, but you’ll just want to look at the state law, the broker’s listing agreement and their agreements with their local board and the MLS.

listing agreement: this document just outlines the agreement between the broker and the seller for the property being sold

MLS: if the broker is part of the MLS, they have to follow the rules and regulations of the MLS. Most post their rules and regulations online so it will be easy to find.

board: a lot of brokers are also realtors, if they are they are tied to a board and the rules of that board.

state law: I’m in Oklahoma City, so I have to follow Oklahoma Real Estate Commission. All their laws are online so it’s easy to pull them and see what’s allowable.

in theory, you don’t have to do all this homework. Your broker should know the regulations. But if they don’t this is what you need to look into to do your own homework.
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