Wholesaling is illegal in NC?

[Iris Ortiz]

I just ran in to a REALTOR that told me would not work with me because assignments of contract and wholesaling is illegal in North Carolina. I have contacted an attorney that advised assignments and double closings are perfectly legal in North Carolina as long as all parties are aware of it. Any attys, Realtors in North Carolina that can elaborate more on this?

[Curtis Waters]

Many wholesalers use the 'equitable interest' argument.  I was at a training done by the NC Real Estate Commission.  They advise that assigning your contract and not taking title makes you a real estate broker and you must be licensed.

From NC General Statutes Section 93 - A real estate broker within the meaning of this Chapter is any person, partnership, corporation, limited liability company, association, or other business entity who for a compensation or valuable consideration or promise thereof lists or offers to list, sells or offers to sell, buys or offers to buy, auctions or offers to auction (specifically not including a mere crier of sales), or negotiates the purchase or sale or exchange of real estate, or who leases or offers to lease, or who sells or offers to sell leases of whatever character, or rents or offers to rent any real estate or the improvement thereon, for others

Some real estate agents and attorneys read the definition and will steer clear of you and your deal...

You should be able to do a double closing (i.e., you buy from the Seller at 11AM, sell to new Buyer at Noon) and avoid this.  Some investors use transactional funding to achieve this.  Note that there are fees for this funding plus additional legal fees.  Many wholesalers will do a double close to hide their profit, as it is not uncommon for Sellers or end buyers to walk at closing to avoid giving a wholesaler a significant profit.

In NC the real estate commission doesn't look for wholesalers - but someone could complain about your activities and complain.  This might result in a cease and desist letter from the NCREC.  If necessary they will refer your case to the Attorney General.  The major issue a few wholesalers face is a lack of ethics that lead to problems.