What’s illegal to show an end buyer when assigning a contract?
Rental Property Investor · Member since 2021 · 423 posts · 190 votes
What’s illegal to show an end buyer when assigning a contract?
Most Popular Reply
Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes
3yQuote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
20 Replies
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes3y
@Mike Schorah, depending on the state you as the seller making representations about the property could be held accountable to warranty those representations.
For example if you say the roof is 5 years out, but after purchase the buyer finds its 15 years old, you could be held liable. That is why when an agent represents a seller, they are guided to disclose only what they KNOW FIRST HAND.
- Investor · Austin, TX · Member since 2021 · 9k+ posts · 5k+ votes3y
There's nothing illegal you are showing the end buyer, you just want to keep what you have it under contract for hidden from them.
- Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes3y
Quote from @Mike Schorah:
I’ve heard some wholesalers doing the following:
- - Submitting a comprehensive list of interior pictures, exterior pictures
- - Submitting pictures of all the things wrong, that needs fixing, or updating, with a description of what is wrong
- - Submitting 2 to 3 properties you have comped to arrive at the numbers, and then make sure they know it is their responsibility to verify
- - Creating a list where you describe the age and condition of the furnace, boiler, water heater, oil tank and all other mechanicals.
- -Describing heating source, gas, oil electrical
I’ve heard other wholesalers having the end buyer do their due diligence online and driving by the property because they’re NOT a realtor. They’re NOT representing pictures or anything of that nature.
So what’s illegal to show an end buyer when assigning a contract?
Thank you for any answers. Even answers from Bobs who tell me I shouldn’t be wholesaling although I have made 20,000 cold calls and have listened to hundreds of hours of content on how to wholesale properties LOL
As a wholesaler you are selling a contract, not a property.
How come you are acting like a real estate agent? I'm not sure why. That greatly increases your liability.
You haven't lived in the property, you don't know the condition of the property, you probably don't even have a title report for the property, you aren't a licensed real estate agent and you aren't selling the property, you are selling a contract, Right? Please say "yes" otherwise you are acting as a real estate agent and are likely to be prosecuted. That's no fun and it ruins your year.
Anything you produce, flyers, websites, business cards, ads, craigslist, Facebook, Instagram, MLS, or any other advertising means can be used against you if you come cross as anything other than a wholesaler, Selling a Contract.
You have a contract for sale and you are selling the contract related to an address that you will provide to a contract buyer, but the buyer must do their own research as to the suitability if that contract is a purchase they want to make.
A lot of wholesalers are going to get a rude awakening if and when they crack down on the process. I think people are liable for up to 3 years (in most states, longer in other states) after they complete their last transaction. That means anything you do today can haunt you into Nov 2025.
Just do things in a legal fashion and avoid the rush of complaints coming down the road in the future. - Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes3y
Quote from @Kevin Sobilo:
@Mike Schorah, depending on the state you as the seller making representations about the property could be held accountable to warranty those representations.
For example if you say the roof is 5 years out, but after purchase the buyer finds its 15 years old, you could be held liable. That is why when an agent represents a seller, they are guided to disclose only what they KNOW FIRST HAND.
You have a contract for a reason.
in my wholesale contract it states that the buyer is responsible for their own due diligence.
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes3y
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes3yOne minor correction. As a wholesaler sometimes they sell a contract and sometimes they sell a property.
Quote from @Account Closed:
Quote from @Mike Schorah:
I’ve heard some wholesalers doing the following:
- - Submitting a comprehensive list of interior pictures, exterior pictures
- - Submitting pictures of all the things wrong, that needs fixing, or updating, with a description of what is wrong
- - Submitting 2 to 3 properties you have comped to arrive at the numbers, and then make sure they know it is their responsibility to verify
- - Creating a list where you describe the age and condition of the furnace, boiler, water heater, oil tank and all other mechanicals.
- -Describing heating source, gas, oil electrical
I’ve heard other wholesalers having the end buyer do their due diligence online and driving by the property because they’re NOT a realtor. They’re NOT representing pictures or anything of that nature.
So what’s illegal to show an end buyer when assigning a contract?
Thank you for any answers. Even answers from Bobs who tell me I shouldn’t be wholesaling although I have made 20,000 cold calls and have listened to hundreds of hours of content on how to wholesale properties LOL
As a wholesaler you are selling a contract, not a property.
How come you are acting like a real estate agent? I'm not sure why. That greatly increases your liability.
You haven't lived in the property, you don't know the condition of the property, you probably don't even have a title report for the property, you aren't a licensed real estate agent and you aren't selling the property, you are selling a contract, Right? Please say "yes" otherwise you are acting as a real estate agent and are likely to be prosecuted. That's no fun and it ruins your year.
Anything you produce, flyers, websites, business cards, ads, craigslist, Facebook, Instagram, MLS, or any other advertising means can be used against you if you come cross as anything other than a wholesaler, Selling a Contract.
You have a contract for sale and you are selling the contract related to an address that you will provide to a contract buyer, but the buyer must do their own research as to the suitability if that contract is a purchase they want to make.
A lot of wholesalers are going to get a rude awakening if and when they crack down on the process. I think people are liable for up to 3 years (in most states, longer in other states) after they complete their last transaction. That means anything you do today can haunt you into Nov 2025.
Just do things in a legal fashion and avoid the rush of complaints coming down the road in the future.
If the original sales contract is assignable, they can assign it and sell the contract but many times they write a second contract and do a double closing. In that case they are actually selling the property. - Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes3y
Quote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
- Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes3yIf they take title they are now the owner. An owner can sell a property. A wholesaler can not. The nuance only matters to the judge. ;-)
Quote from @Kevin Sobilo:
One minor correction. As a wholesaler sometimes they sell a contract and sometimes they sell a property.Quote from @Account Closed:
Quote from @Mike Schorah:
I’ve heard some wholesalers doing the following:
- - Submitting a comprehensive list of interior pictures, exterior pictures
- - Submitting pictures of all the things wrong, that needs fixing, or updating, with a description of what is wrong
- - Submitting 2 to 3 properties you have comped to arrive at the numbers, and then make sure they know it is their responsibility to verify
- - Creating a list where you describe the age and condition of the furnace, boiler, water heater, oil tank and all other mechanicals.
- -Describing heating source, gas, oil electrical
I’ve heard other wholesalers having the end buyer do their due diligence online and driving by the property because they’re NOT a realtor. They’re NOT representing pictures or anything of that nature.
So what’s illegal to show an end buyer when assigning a contract?
Thank you for any answers. Even answers from Bobs who tell me I shouldn’t be wholesaling although I have made 20,000 cold calls and have listened to hundreds of hours of content on how to wholesale properties LOL
As a wholesaler you are selling a contract, not a property.
How come you are acting like a real estate agent? I'm not sure why. That greatly increases your liability.
You haven't lived in the property, you don't know the condition of the property, you probably don't even have a title report for the property, you aren't a licensed real estate agent and you aren't selling the property, you are selling a contract, Right? Please say "yes" otherwise you are acting as a real estate agent and are likely to be prosecuted. That's no fun and it ruins your year.
Anything you produce, flyers, websites, business cards, ads, craigslist, Facebook, Instagram, MLS, or any other advertising means can be used against you if you come cross as anything other than a wholesaler, Selling a Contract.
You have a contract for sale and you are selling the contract related to an address that you will provide to a contract buyer, but the buyer must do their own research as to the suitability if that contract is a purchase they want to make.
A lot of wholesalers are going to get a rude awakening if and when they crack down on the process. I think people are liable for up to 3 years (in most states, longer in other states) after they complete their last transaction. That means anything you do today can haunt you into Nov 2025.
Just do things in a legal fashion and avoid the rush of complaints coming down the road in the future.
If the original sales contract is assignable, they can assign it and sell the contract but many times they write a second contract and do a double closing. In that case they are actually selling the property. - Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes3y
Quote from @Jerryll Noorden:
Quote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
I’m happy to have you tell that to the judge. ;-)
What you are not seeing is that an agent has a fiduciary duty, a license, can be held accountable, a wholesaler does not.
It apparently is illegal to wholesale in Florida but it isn't illegal to be an agent there. How do you explain that? I don't make the rules, I just point them out.
- Rental Property Investor · Member since 2019 · 69 posts · 38 votes3y
Quote from @Eliott Elias:
There's nothing illegal you are showing the end buyer, you just want to keep what you have it under contract for hidden from them.
How do you keep that hidden in an assignment when they’ll need the original purchase contract as well as the assigned to proceed with the deal? Only way to actually hide it is to double close right?
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes3yIs it illegal for me to buy the house with my own money and sell it the next second after ?
Quote from @Account Closed:
Quote from @Jerryll Noorden:
Quote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
I’m happy to have you tell that to the judge. ;-)
What you are not seeing is that an agent has a fiduciary duty, a license, can be held accountable, a wholesaler does not.
It apparently is illegal to wholesale in Florida but it isn't illegal to be an agent there. How do you explain that? I don't make the rules, I just point them out.
No?
Then you are wrong and I am right. You don't understand the concept of wholesaling . You only see how people do it wrong! Get it?
wholesaling is legal everywhere. Wholesaling illegally is not legal everywhere.
;) - Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes3y
Quote from @Kwame Darko:
Quote from @Eliott Elias:
There's nothing illegal you are showing the end buyer, you just want to keep what you have it under contract for hidden from them.
How do you keep that hidden in an assignment when they’ll need the original purchase contract as well as the assigned to proceed with the deal? Only way to actually hide it is to double close right?
We dont hide anything. We are completely transparent. But that's just us. That's how we do it
- Investor · Scottsdale Austin Tuktoyaktuk · Member since 2021 · 4k+ posts · 4k+ votes3y
Quote from @Jerryll Noorden:
Is it illegal for me to buy the house with my own money and sell it the next second after ?Quote from @Account Closed:
Quote from @Jerryll Noorden:
Quote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
I’m happy to have you tell that to the judge. ;-)
What you are not seeing is that an agent has a fiduciary duty, a license, can be held accountable, a wholesaler does not.
It apparently is illegal to wholesale in Florida but it isn't illegal to be an agent there. How do you explain that? I don't make the rules, I just point them out.
No?
Then you are wrong and I am right. You don't understand the concept of wholesaling . You only see how people do it wrong! Get it?
wholesaling is legal everywhere. Wholesaling illegally is not legal everywhere.
;)Your comment: "Is it illegal for me to buy the house with my own money and sell it the next second after ?"
I think you didn't read what I wrote:
"If they take title they are now the owner. An owner can sell a property. A wholesaler can not."
If you buy the house, you are not wholesaling, you now own and if you own you can sell. There is a very big difference.These are people who are not buying, they are "controlling the property with equitable title" not "legal title".
Talk to your attorney if that is unclear to you. ;-)
I know you are a Rocket Scientist. Law isn't Rocket Science. Lol
- Investor · Melbourne, FL · Member since 2017 · 159 posts · 116 votes3y
Quote from @Jerryll Noorden:
Is it illegal for me to buy the house with my own money and sell it the next second after ?Quote from @Account Closed:
Quote from @Jerryll Noorden:
Quote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
I’m happy to have you tell that to the judge. ;-)
What you are not seeing is that an agent has a fiduciary duty, a license, can be held accountable, a wholesaler does not.
It apparently is illegal to wholesale in Florida but it isn't illegal to be an agent there. How do you explain that? I don't make the rules, I just point them out.
No?
Then you are wrong and I am right. You don't understand the concept of wholesaling . You only see how people do it wrong! Get it?
wholesaling is legal everywhere. Wholesaling illegally is not legal everywhere.
;)Actually it would be illegal in 99.9% of cases to buy and then sell 1 second later, i.e. a double close. To sell the property that fast you would have to be marketing the property before you owned it and that is illegal.
- Realtor · Hanover Twp, PA · Member since 2018 · 3k+ posts · 3k+ votes3y
- 3yTom GimerBusiness MemberDMV · Member since 2017 · 3k+ posts · 3k+ votes
Quote from @Kwame Darko:
Quote from @Eliott Elias:
There's nothing illegal you are showing the end buyer, you just want to keep what you have it under contract for hidden from them.
How do you keep that hidden in an assignment when they’ll need the original purchase contract as well as the assigned to proceed with the deal? Only way to actually hide it is to double close right?
Somewhere along the way the original question got lost. It pertained to what things are illegal to show potential assignees, presumably to evaluate whether activities are subject to RE licensing laws. Assigning and double closing are 2 methods that wholesalers use as exit strategies, so I get it. But as to the question… the answer is found locally in the code, regulations, or opinions from the real estate commission. Most states that are currently cracking down on wholesaling look to the substance of the transaction as a whole. You often cannot defend by saying “I only provided a copy of the contract.” If the substance is that you are offering, advertising or dealing in real estate or an interest in real estate such as a contract or option, that may require a license. You don’t have to provide property info, photos, floor plans, etc. in order to run afoul of more recent definitions (or interpretations) of “real estate brokerage”.
Wish I could be more definitive but this requires local research.
Easiest way to minimize this concern would be to assemble a solid list of buy and hold or rehab investors in the area.
Sorry, somehow my reply was to the wrong message. Should have tagged @Mike Schorah
Gimer Law516 Reviews - Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes3y
Quote from @Account Closed:
Quote from @Jerryll Noorden:
Is it illegal for me to buy the house with my own money and sell it the next second after ?Quote from @Account Closed:
Quote from @Jerryll Noorden:
Quote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
I’m happy to have you tell that to the judge. ;-)
What you are not seeing is that an agent has a fiduciary duty, a license, can be held accountable, a wholesaler does not.
It apparently is illegal to wholesale in Florida but it isn't illegal to be an agent there. How do you explain that? I don't make the rules, I just point them out.
No?
Then you are wrong and I am right. You don't understand the concept of wholesaling . You only see how people do it wrong! Get it?
wholesaling is legal everywhere. Wholesaling illegally is not legal everywhere.
;)Your comment: "Is it illegal for me to buy the house with my own money and sell it the next second after ?"
I think you didn't read what I wrote:
"If they take title they are now the owner. An owner can sell a property. A wholesaler can not."
If you buy the house, you are not wholesaling, you now own and if you own you can sell. There is a very big difference.These are people who are not buying, they are "controlling the property with equitable title" not "legal title".
Talk to your attorney if that is unclear to you. ;-)
I know you are a Rocket Scientist. Law isn't Rocket Science. Lol
Now we are talking tomaetos tomahtos though.
A double close, or using the back ends buyers funds , private or hard money to buy the property and a microsecond afterwards sell it, to me is considered wholesaling. So we may propbably say the same thing.
- Investor · Atlanta, GA · Member since 2016 · 627 posts · 374 votes3y
Actually it would be illegal in 99.9% of cases to buy and then sell 1 second later, i.e. a double close. To sell the property that fast you would have to be marketing the property before you owned it and that is illegal.
100% inaccurate @Ron H.
I could talk to you, find out your buy criteria and have my buyer first. Then find a house that matches your criteria. I then share pictures or let you walk the property. You tell me your price. I then go back to the seller, get it under contract for less than you said, now assign and done.
Too many people argue over things they don't know on this thread. - Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes3y
Quote from @Ron H.:
Quote from @Jerryll Noorden:
Is it illegal for me to buy the house with my own money and sell it the next second after ?Quote from @Account Closed:
Quote from @Jerryll Noorden:
Quote from @Kevin Sobilo:
@Jerryll Noorden, this is why being a wholesaler is risky. Unlike a real estate agent or broker there are no educational requirements for wholesalers.
In many states, disclosure of material defects is required with limited exceptions for things like foreclosure sales etc. So, stating to someone they are buying "as-is" or that the "buyer is responsible for their own due diligence" is meaningless because by law you are required to tell them about any issues you know about. Those statements may have meaning when selling a car, but state's have created special laws making the sale of real estate different when it comes to this issue.
Also, due diligence is different from warranties. When you tell a buyer a fact about a property as a seller of something you are creating a warranty. You can be held liable for those statements being true. No due diligence clause allows you to misrepresent a property and get away with it.
A due diligence clause as you describe really only covers material defects that you didn't know about and therefore could not disclose to them.
There are no safety protocols / lessons for picking up a stone either.
One can throw a stone and kill someone with it, right?
I truly feel people need to stop clinging to that notion. It is almost like people just want an excuse to hate whoesaling and wholesalers.
ANYTHING and EVERYTHING can be exploited. Are you saying that because agents have licenses they can't be dishonest? You should walk a year or two in my shoes, and you will see that that piece of paper people call a "license" is a joke!
Yes there is no regulation to wholesaling, but that doesn't mean everything anyone says about whoesaling in a negative way is true, correct, or justified.
As a wholesaler I don't own the house, I just sell the contract. it would be hard for anyone to come after me when I don't own or know the house right? How is it my responsibility to know there are termites, when I don't live there.
I simply can't see how anyone can "get me" for not disclosing something I don't know about... nor is it my job to do so. That is not the job of a wholesaler. The BUYER needs to do their due diligfence if they decide to buy without agent representation.
We explain to the seller we will wholesale, and then assign the contract. there is nothing illegal about this no matter what state you are in.
Remember, you can always double close, use pvt money, hardmoney or your own money to wholesale legally.
The end of the day, you signed your rights over to the buyer. It is between the seller and the buyer. I am not talking about doing it in a sneaky way.. I am simply saying an honest whoelsaler coul dhave the best of intentions and assign the contract over. If the seller didn't disclose something, how is that on you? It is between the seller and the buyer.
Remember, an agent represents the buyer or the seller... THAT is risky. A wholesaler does NOT represent the buyer NOR the seller. A whoelsaler finds deals and assigns the contract to a buyer. This strategy simply benefits sellers and buyers. If wholesaling was universally so wrong, no seller would ever go for it, and obviously that is not the case.
I’m happy to have you tell that to the judge. ;-)
What you are not seeing is that an agent has a fiduciary duty, a license, can be held accountable, a wholesaler does not.
It apparently is illegal to wholesale in Florida but it isn't illegal to be an agent there. How do you explain that? I don't make the rules, I just point them out.
No?
Then you are wrong and I am right. You don't understand the concept of wholesaling . You only see how people do it wrong! Get it?
wholesaling is legal everywhere. Wholesaling illegally is not legal everywhere.
;)Actually it would be illegal in 99.9% of cases to buy and then sell 1 second later, i.e. a double close. To sell the property that fast you would have to be marketing the property before you owned it and that is illegal.
That is a HUGE assumption there my good looking dude! Let me try to explain..
You are concluding because I sell the house 1 second after buying it , it was illegal because I MUST have marketed it before I owned it?
Imagine I find a house. I send my cash buyer to see if they are interested in the house. They tell me "yes, very interested", I say "great", let me get it under contract. Now I have a buyer for the house ready, and then sign the contract with the seller. I double close on it.See what I mean?
And btw.. think about what you said.
Are you saying a double close is illegal because ANYONE that does a double close MUST have marketed the property illegally? Because how on Earth is it even possible to find a buyer for it so fast... Doesn't make sense right?
Then:
What do you consider "marketing" the property?
If I tell my neighbour that the house down the street is for sale, am I marketing the property?
Yup!
Is that illegal?
Nope!
Either way, I honestly don't care all too much about this topic.. so what ever you all say or do.. go for it.
Those are just my 2 cents.
:D
- Flipper/Rehabber · Wilton, CT · Member since 2015 · 4k+ posts · 4k+ votes3y
Quote from @Jesse LeBlanc:
Actually it would be illegal in 99.9% of cases to buy and then sell 1 second later, i.e. a double close. To sell the property that fast you would have to be marketing the property before you owned it and that is illegal.
100% inaccurate @Ron H.
I could talk to you, find out your buy criteria and have my buyer first. Then find a house that matches your criteria. I then share pictures or let you walk the property. You tell me your price. I then go back to the seller, get it under contract for less than you said, now assign and done.
Too many people argue over things they don't know on this thread.You beat me to it. Was just writing the exact same scenario!
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