Wholesaling is illegal in NC?

Wholesaling
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Wholesaling is illegal in NC?

Iris Ortiz
Insurance Agent · Clayton, NC · Member since 2015 · 41 posts · 8 votes

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?

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Curtis WatersBusiness Member
Rental Property Investor · Charlotte, NC · Member since 2013 · 291 posts · 176 votes
9y

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.

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  • Steven Pizarro Jr
    Charlotte, NC · Member since 2017 · 13 posts · 3 votes
    9y

    @Amber 

    @Amber Simmons Your Welcome. 

    0Reply
  • Amber Simmons
    Charlotte, NC · Member since 2017 · 14 posts · 10 votes
    9y
    Steven Pizarro Jr one more thing! What made you decide to use an attorney vs. title company?
    1Reply
  • Steven Pizarro Jr
    Charlotte, NC · Member since 2017 · 13 posts · 3 votes
    9y

    @Amber Simmons in NC attorneys can close transactions. 

    0Reply
  • Alvin Moore
    Charlotte, NC · Member since 2017 · 15 posts · 6 votes
    9y
    Thank you for listing your attorney in Charlotte! I reached out to him Steven Pizarro Jr and let him know you referred me and will be using his service to close my deals in the future! Many thanks as I am now one step closer to putting a property under contract!
    0Reply
  • Sonya McMannen
    Charlotte, NC · Member since 2017 · 1 post · 0 votes
    9y

    Good deal.  I am just starting out and needed clarity about what the waters were like as it relates to assignments in NC?  Sounds like I need to get an educated real estate team to move forward with my goals of wholesaling.  Great discussion!

    0Reply
  • Derrick Reid
    Raleigh, NC · Member since 2018 · 2 posts · 1 vote
    8y

    Can anyone @here recommend an attorney in Raleigh NC that is wholesale deal friendly? I have been calling them and haven't had any luck finding one to add to my team yet. As soon as I mention the word "assignment" or "double close" they change their tone. I will keep calling in the meantime and if I find one I will update this post. 

    1Reply
  • Christopher K.
    Real Estate Developer, Investor, and Broker · Raleigh, NC · Member since 2017 · 99 posts · 82 votes
    8y

    @Derrick Reid Kathie Russell @ Russell & Associates or Justin Taylor @ Roper & Taylor

    3Reply
  • Derrick Reid
    Raleigh, NC · Member since 2018 · 2 posts · 1 vote
    8y

    Thank you @Christopher K.!!! I will give them a call today. 

    0Reply
  • Geena Fie
    Denver, NC · Member since 2013 · 1 post · 3 votes
    8y

    Attached is a helpful article from a lady who inquired with NCREC Legal Counsel to find out if what she wanted to do was legal or not legal (Bird-dogging and wholesaling) in the State of North Carolina. 

    Please be advised just because an attorney will close the deal for you it does not always make it legal.

    http://www.reiclub.com/forums/index.php?topic=2326...

    3Reply
  • Dan Roma
    Houston, TX · Member since 2018 · 72 posts · 6 votes
    8y

    I am dealing with the same thing in Texas..everyone is saying it is legal. What is legal is having possession of the property and selling directly to a buyer; once you have an interest in the property without a license, that is considered illegal.

    0Reply
  • John Webster
    Winston Salem, NC · Member since 2017 · 201 posts · 56 votes
    8y

    it is funny I can go to networking events in various states where all they do wholesaling, attorneys are in there and dnt say a word. Hell I have had agents bring me deals from wholesaler's. Some attorneys say it is legal and some say it isn't. I have friends wholesaling and have no issues with attorneys saying they can't do it. Very smooth transactions. If it was illegal no attorney's would do it.

    0Reply
  • John Webster
    Winston Salem, NC · Member since 2017 · 201 posts · 56 votes
    8y

    Because an attorney closes a deal doesnt mean it is legal? Lol. Yep that makes sense i know I can get in trouble but will do anyway. Lmao

    0Reply
  • John Webster
    Winston Salem, NC · Member since 2017 · 201 posts · 56 votes
    8y

    Definition of professional realestate never mentions anything to do with reassigning contracts. It states "when engaged in for another for compensation"  since a wholesaler actually signs a contract and has relative obligation to perform, they are engaging in the activity for themselves, not for another. That is what a agent does, they negotiate for another for compensation. Wholesalers dnt.

    0Reply
  • Seth Parmelee
    Realtor · Wilmington, NC · Member since 2018 · 71 posts · 24 votes
    8y
    @Chris Martin don’t forget the box at the end that asks if sellers owned property for year, less than year, or will own it prior to sale. Sounds like wholesaling is legal to me. I just don’t know how to do it
    0Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    8y
    Originally posted by @Seth Parmelee:
    @Chris Martin don’t forget the box at the end that asks if sellers owned property for year, less than year, or will own it prior to sale. Sounds like wholesaling is legal to me. I just don’t know how to do it

    See also this topic I created a while back: and where the original poster claims to post a wholesale deal on MLS. NC isn't on the same path as FL and OH.

    0Reply
  • Eric Gamble
    Charlotte, NC · Member since 2018 · 62 posts · 28 votes
    7y

    @Iris Ortiz did you think that 43 month later, what you might have thought would have a straight-forward answer, is still a lively debate?

    Here is what I have summarized:

    • Double Closings with Transactional Funding

    OR

    • Assignment Savvy Lawyers
      • with Clear Intent (an extremely large price difference between Seller and Investor could be misconstrued as fraud or non-disclosure) 
      • with Clear Communication Among All Parties (Seller -> YOU -> Investor) Seller must be made aware of and agree to the contract being passed to the Investor

    I am not a lawyer and I am not providing any advice or guidance, legal or otherwise, with this post.

    1Reply
  • Lydia R.
    Investor · Austin TX · Member since 2016 · 1k+ posts · 2k+ votes
    7y

    @Iris Ortiz Realtors are complete unnecessary in a wholesale transaction. There will always be agents who will try to discourage you or tell you what you are doing is illegal. If you have an attorney that says it legal to do assignments then ignore ignorant agents who dont know what they are talking about.

    0Reply
  • Account Closed
    Specialist · Hendersonville, NC · Member since 2018 · 159 posts · 23 votes
    7y

    Hi all. If I don’t write in my real estate sales contract, “and or assigns,” is it still possible for me to assign it (if seller agrees)? My contract says I can assign if the seller gives express written consent.

    0Reply
  • Connor Riddell
    Investor · Raleigh, NC · Member since 2020 · 4 posts · 5 votes
    6y

    I'm late to this thread but I am looking to get in to wholesaling in NC in the near future. I am in the due diligence process right now to purchase my first ever property that I'll be house hacking . I appreciate all the solid information and advise by everyone in the thread.

    1Reply
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    Member since 2021 · 1 post · 0 votes
    5y

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    Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    5y

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