The Danger of Wholesalers Holding Real Estate Broker or Salesperson Licemse

[Don Konipol]

 More and more states are requiring wholesalers to be licensed.  I have stated before that this could be a trap for the wholesaler, whom, if licensed may be taking on a responsibility to the seller that is at a minimum in conflict with their object of paying a below market price.  The following applies only to Texas.  The Texas Administrative Code, 535.144

(c) A license holder acting on his or her own behalf or in a capacity described by subsection (a) shall not use the license holder's expertise to the disadvantage of a person with whom the license holder deals.
 
what’s your opinion? 

[Katlynn Teague]

The fact that states require wholesalers to hold an active license is great. There are a lot of people out there who went and watched a YouTube video and now think they are going to make millions off of wholesaling. These are the people a lot of investors/relators can't stand. 

I am a licensed agent here in GA and work at a nationwide wholesale brokerage. We have to move and shake differently than typical wholesalers. You have to disclose to anyone you work with that you hold an active license. But there are many ways to work with buyers and sellers alike with many different types of representation involved. This also depends on the property, wholesalers are not going after retail houses. They are going after the nastiest houses on the block. More often than not the houses that people are wholesaling do not qualify for conventional loans. They could still be listed however, could only be purchased in cash, seller finance, or hard money. Which most buyers are not going to be paying retail costs for. It's really all about figuring out what the best route is for the seller and figuring out which way to go.

I don't think that wholesaling is ever taking advantage of a seller. If both parties are able to agree on a price that is equally beneficial to both parties no disadvantage is taken. Wholesaling is a business and everyone has their own opinions about business. It will certainly be interesting to see how this will change the game.