Updated about 10 years ago on . Most recent reply
What is this called and do I have to have real estate license?
When you go to a property owner to make a deal? For the house contract rights then I go out to find a buyer the property. And sell the contract to the buyer for a profit? What is this title called and do I need a real estate license for it? Please help me and Future thank you for the advice.
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- Rental Property Investor
- Mercer Island, WA
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#3 Real Estate Deal Analysis & Advice Contributor
- Rental Property Investor
- Mercer Island, WA
What you're describing is wholesaling or brokering. Really, they're the same thing. You find a seller, find a buyer, put them together, collect a fee.
The difference is that brokering property requires a license in every state. Wholesalers try to avoid being "unlicensed brokers" by becoming a principal in the transaction. They might get the property under contract, then assign the contract for a fee. Or, buy an option on the property, then sell the option. Or do a double closing where they buy it, then immediately re-sell it. Or various other options.
As far as the legality, that seems to vary from state to state. In theory, because you're a principal in the transaction, rather than just facilitating a transaction involving other people, you're not brokering. But judges and RE licensing boards sometimes take the view that you are in fact acting as a broker.