Wholesaler who have Real Estate License, do you pay your broker?

8 Replies

This may be a good Wayne Brooks quesiton, but for whoelsalers who have a license, are you required to pay your broker for all the deals you transact? I can understand buying something off the MLS where your Broker is going to get their fee, but If I buy it with an LLC and then wholesale that to a cash buyer? am I required to pay my broker, as I technically transacted on behalf of my LLC? Any thoughts?

Hi Mike:

I am a RE agent in NJ and as I understand, if you are the buyer and NOT representing anyone else, then assign the property to a seller, you MAY not be required to pay your Broker although they will tell you as a licensed Realtor, you have to transact everything through them.

When you bring a buyer and seller together and are entitled to a commission, that must go through your Broker.

This is as I understand it to be in NJ, not sure for Florida, I would confirm my thoughts with DOBI in Florida or a RE attorney.

Would any  of our fellow professional  members please comment to confirm?

Thank you

If you buy it off the MLS, who and how you pay is determined by the listing agreement. If you close on it then you can do as you please (list it, FSBO...).

@Mike Nelson , definitely check your office's policies and procedures manual. For me, I pay a fee for ALL transactions. Further, my broker has to be informed in writing of any personal real estate transaction where I'm the principal. 

This would be determined by the independent contractor agreement you have with your broker, but in most cases, no.  This does raise the question though....everyone says get a license if you want to wholesale legally, but if you're "using your license as an agent" any fees would have to go thru your broker since an agent can't receive "licensed agent fees" directly from a client....so it seems having a license, but your fees not going thru your broker doesn't accomplish anything?

Originally posted by @Wayne Brooks :

This would be determined by the independent contractor agreement you have with your broker, but in most cases, no.  This does raise the question though....everyone says get a license if you want to wholesale legally, but if you're "using your license as an agent" any fees would have to go thru your broker since an agent can't receive "licensed agent fees" directly from a client....so it seems having a license, but your fees not going thru your broker doesn't accomplish anything?

 If i close on a Hud property using my company, and then the company sells to a cash buyer from a buyers list for example,  I would see how the broker fee is due on the first transaction, but what about the second?  What the company i own is a partnership and my partner wants to sell it?  Why would a  flat broker fee be required on the end buyer transaction?

For me, and most agents, there would be no fee owed to my broker.  But as I said, this not a question of law, it's whether it's addressed/required in your independent contract agreement with your broker.  No one here can answer that question for you.