I'm interested in wholesaling in Utah (Salt Lake and Utah counties) and was wondering if there were any laws that I should be aware of before I start. Also, if anyone has a purchase & sale agreement I could reference, that would be awesome. Thank you!
Here's a link on my web site to the state approved purchase contract and a couple of other forms, though section 9 makes it not ideal for wholesalers unless you attach an addendum with a clause about "and or/assigns."
The law favors business and sales people in Utah, but there are a few things to watch out for. If you don't have your real estate license, you'll want to avoid looking like you're trying to buy or sell real estate on behalf of another party without a license. Plenty of wholesalers are doing just fine in Utah, but there's a possibility that the division could eventually look at the wholesaling situation with more scrutiny than they are now and start cracking down.
I am a wholesaler in Utah and would agree with Skyler in his remarks. The Divison of Real Estate is tough here and is not fond of investors wholesaling properties. You definitely want to make sure you have all the right disclosures in place on any agreement you use. You also want to be very careful of advertising the property once you get it under contract. If you look like you are selling a property you don't own (even with equitable interest) the Division will treat it as working as a realtor without a license. The only thing I would disagree with Skyler about is the Division is already cracking down. The statutes are very vague and can be interpreted in a number of different ways. Ask me how I know this! If you have any questions you can contact me and we can discuss further.
@Skyler Smith I just signed up on your website to be notified of deals. FYI it wasn't working to well so if my email address didn't come through to be added to your list please send me a PM. I am a buy and hold investor of single families and small multi families in Salt Lake County and UT county, any other wholesalers out there feel free to send me a PM as well.
How do you know this?
I would love to hear about any action the division is taking on this front.
I actually had a conversation with the head of the DRE who confirmed that wholesaling a contract does NOT require a license. And that they won't enforce that. Although their agents sometimes become a little too motivated.
This does not change the rules about use of entities requiring a license (a very dumb rule that isn't really enforced either). So an individual wholesaling does not require a license, but doing it in an entity does (as does any real estate transaction where the buyer or seller is an entity) because of the entity involvement, not because it's wholesaling.
But like all transactions involving entities, there are a million reasons to use them and I say keep doing transactions in entities. I've never see that, alone, be a problem.
Jeff is correct on your marketing. That's the big red flag. You never know when an agent with a bug that thinks you need a license for everything reports you. But I have many clients who aggressively market their wholesale deals without issue. Just be smart, use disclosures and be honest.
Hi Alicia. Are you in Utah finding deals? There are some great clubs here with investors who would like to be on your buyer list. Finding deals is the big value proposition right now! I'm always looking for the right rehab properties and when I find something good, but outside my usual wheelhouse I put in out to other investors as a wholesale. It's worked out quite well. If you are not in the state, finding and vetting deals is much more difficult. Some wanna-be wholesalers simply push out other peoples deals after adding 5K to the price. That is not cool! - and I've had some of my own deals sent back to me within an hour of posting, with a much higher price. Those guys get a bad reputation really fast because they are sending out deals to the same list of buyers that see the original post! A good wholesaler finds deals and connects buyers. If you can be creative and work hard, wholesaling can bring some great success!
Bigger Pockets has some great resources both written and human! Lots of great stuff here!
You asked about a contract and I found this one in the Resources/Files tab:
Have fun and make your own luck!
@Alicia Hensley , I just read through this forum post. I have changed my niche to wholesaling for the time being to get my feet wet, then will be moving into buy and hold. How are things going for you here in utah? Has wholesaling worked out well? Encounter any issues?
This is an older thread but I thought I'd post an update. The Utah DRE has started to take a long hard look into wholesaling in Utah and licensing. Up till now they've had loose guidelines as to when you could wholesale with or without a license. But they are now trying to solidify those guidelines. This is due to brokers complaining to the division about it. They will certainly make the push to make is a licensed-only activity. I will be working with the DRE over the next few months to help shape those guidelines as favorably as I can. But, for now, you should be careful if wholesaling without a license. And if you are licensed, you should also be careful if you not running the deals through your broker. I will keep everyone updated. Keep an eye out on our website for upcoming webinars over the summer on this.
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