I recently read an article in a local REI magazine in Pennsylvania written by an attorney who is representing a few wholesellers who are being investigated by the Real Estate Commission for acting as unlicensed real estate agents.
The article reads that it is not yet illegal to assign a contract in PA but if you try to make a business out of this then your assignment contract is misrepresents your intentions to the seller.
Is there a way to stay within the perimeters of wholesaling without being dinged by the Real Estate Commission for acting like a RE Agent? I have heard that selling a contract vs. a property is a main differentiator between wholesalers and real estate agents.
How do you show your wholesaling fee on the HUD-1? Assignment fee? Consulting fee? etc..
Or is there a way to keep the assignment off the books and if so is that the best way to collect an assignment fee?
It may vary state to state. But the Real Estate Commission has no authority over you. Because you are not a real estate agent. I'm not saying that they can't kick and scream and report you to the Attorney General. My understanding is that when the signs the contract to you. You have a vested interest in the property. You can do whatever you want within the boundaries of that contract.
I'm not an attorney and I don't the laws of every state. An idea would be to maybe speak to a real estate attorney.
Thank you for the response Roland. Do you know of any wholesalers that have in fact been dinged with a fine by the AG ? if so, why?
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