Florida RE Attorneys: Wholesaling Legalities

Florida RE Attorneys: Wholesaling Legalities

Investor · Tampa, FL · Member since 2016 · 16 posts · 9 votes

I've scoured this site for months upon months and haven't come to a solid conclusion...so, I'm sure I am asking something similar to every other newb- and I apologize not only for the repetition but the length.

***My question is for those proficient in RE Law pertaining specifically to Florida.** 

My husband and I have decided that we would like to begin wholesaling (specifically contract assignment)- because let's face it, with about as much capital as a handful of beans (which will get eaten up mostly in marketing,) it seems the most feasible way to build a nest egg for our eventual fix and flips/buy and holds. Plus, there's a large market with all of the dilapidation/tax default/absentee owners in our area. That's another part of the reason we want to do this! We genuinely see a need for it. In my experience there aren't a lot of RE agents in our immediate area that are determined/honest/compassionate/savvy enough to deal with truly motivated sellers OR investors (not all, but a lot.)

That being said, I'm here because we're having an issue with the legalities of it all. Ethics are another story, as I DO know that it is possible to conduct ANY business dealing ethically. My concern is being slammed by the AG. Risking my family's well being isn't worth any amount of money.  

As you'll hopefully be able to see from my spiel below, I am not interested in back-dooring anyone by any means, especially someone who may be in a bind and genuinely NEEDS the quick out- I've been there. Karma is a twit and I don't intend on facing her.

So, seeing as neither of us are realtors or brokers or working under a broker, and do not plan (as of this very moment) to purchase any of the homes we are hoping to put under contract- is simply putting a home with an agreed upon assignment contract ALONE, LEGALLY considered enough EI here to market property? 

Or/also, if in being completely honest with a distressed/motivated seller about what we're doing and some form of cash IS required (IE: "While your home doesn't currently fit our needs, we do have access to other serious cash investors who may be interested {and we absolutely do}. So, to affirm that we are serious in helping you- would you be willing to allow us to place your home under contract with us, along with a non-refundable amount of {let's say $100- so we have the ability to market?} for the duration of 30 days? And in that time, let us see what we can do for you to get you out of XYZ situation! If in that time we're unable to procure a serious cash buyer and our contract then becomes null and void, we'll be more than happy to point you in the direction of another reputable wholesaler, RE agent, etc who will be more than happy to further assist with what you may need.....") are we then free, with an approach such as this, to move forward (contract, market and assign) lawfully (and would you consider my above approach the most ethical way to go about an assignment?) Or, does the upfront intent of us NOT being the end buyer disallow us from legally placing the home under contract to begin with?

I would ask if we should just get our RE license and do it that way, but from what I understand in this form of wholesaling, you'd have to work as the principal anyway, and not the realtor....?

I've seen SO many varying opinions on all of this. But, I can't work with opinion. Opinion could mean the difference between jail or no jail, and "I didn't know" doesn't hold up well in court. 

WHEW! Okay, I'll stop! I really look forward to your replies! Thank you, again! 

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Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
10y

Sorry, I'm not an attorney.

You know, the Florida Real Estate Commission really isn't full of monsters, they are in public service and are probably fairly nice people. Why don'y you just call them and tell them what you have written here and ask them if your planned activities would violate Florida Laws and real estate ethics? 

Really, just call and ask, it won't cost you anything to ask and you'll be getting information from the horse's mouth! 

BTW, your statement about ethics, I have a feeling you're off a bit on that angle.

Business ethics, as I just recently posted, is not your opinion or anyone's opinion of what is acceptable in any industry, it's not a religious point of view, it's not what we personally feel might be right or wrong, business ethics are established expectations of conduct for those dealing in that industry. Each profession has a code of ethics, in real estate we have a bit of a problem;

Just about every profession that deals in the real estate arena has a code of ethics except individuals or entities that operate as "investors", for investors it's the Wild West, each is left to make up their own ethical boundaries. 

But what we can and should do is look to the established ethical boundaries established by those related professions as this will give you a guideline of what others in the industry expect as acceptable conduct. 

Personally, I adopt the Realtor's Code of Ethics as that applies to real estate operations, I also adopt the Code of Ethics of lending institutions such as confidentiality, disclosures, fair dealing and much of that is also anchored in law. 

The short of it is, is that you might do something that is perfectly acceptable in the auto sales arena but that can be highly unethical (and illegal) in real estate. An example might be helping you neighbor sell their car, you find a buyer and the car owner flips you a reward, that may fly without having to be registered as a car dealer, but that is not acceptable conduct in real estate. But, if you go into the business of consignment sales with cars, you'll need a dealer's license.

Breaking laws is unethical conduct in all industries.         

Real estate is not a commodity like cars or boots or cans of green beans or airplanes. Commodities can be produced, real property.....dirt, cannot be produced or reproduced. Real property is not personal property and we deal with it differently than personal property. 

When dirt has a legal description it is real property. The bag of soil for sale at the garden center is personal property.  That's said just in case we have some wise guy remark in the forums. :)

Now, IMO, what you outlined above is clearly broker without a license, I think you already know that.

As to contracts, basic contract law requires certain aspects be present for a valid contract, two of those are -the ability to perform as written or agreed and the intent to perform as written or agreed. If one or both of those requirements are missing, you do not have a valid contract! It is voidable.

We recognize that when we sell real estate the title must be clear of any defects. If you buy a new lawnmower, is there any expectation that it runs properly and is free of defects? Yes! So, one who holds a contract that is defective, it's voidable, are you holding your "product" out as being genuine and free of defects? That's what a wholesaler does, they assign defective contracts. Some may construe that as fraudulent dealing. 

With just a tad bit of research on the elements necessary to contract you will see what the legal requirements are, it's pretty plain. 

And, just because a contract is voidable doesn't mean one or both parties will void the contract, but they can and that is the point of the contract being defective. 

After I did further in depth research into this wholesaling niche, reading opinions of lawyers and regulators, breaking through the glaze at the top, I have formed this more current opinion. I didn't pull my opinion out of my hat. 

Other than protecting the public from scammers or people who don't have a clue as to what they are doing, I have nothing at steak in defending or attacking wholesaling activities that are carried out by assigning contracts.

All is not lost, you can do basically the same thing a wholesaler does by taking title so you can sell. You don't need a ton of cash or good credit, and there are several ways to close a deal as required. It's not rocket science! You will then have the intent and ability to purchase, you won't be brokering without a license if you take title then sell. This is not a "double closing" which is now restricted by ALTA, but is a back to back settlement. You buy and immediately sell minutes later. Now, you're ethical and legal at least with regards to the wholesaling thing. :)    

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  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    10y

    Hi @Amanda Fishman,

    In regards to "

    I would ask if we should just get our RE license and do it that way, but from what I understand in this form of wholesaling, you'd have to work as the principal anyway, and not the realtor....?"

    If you have your license then they are your principal. In other words you just simply sell their house for them. Instead of having them sign a contract that you are trying to market very carefully (and having equitable interest in the property).... you simply have them sign a listing agreement and you market that property to everyone you can see on the street. Stand from roof tops and market it that way. If it does not sell, they are no worse off and you are not defaulting on a contract you made with them.

    If you never plan on purchasing then then let them be your principal, work in their best interest by getting that house in front of 2 million people instead of the 38 on your cash buyer list who fit it.

    Just my thoughts and good luck!

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    10y

    Basically you want to broker real estate without a license with very little money and are willing to sign contracts with no ability to close

  • Rental Property Investor · Clarkston, GA · Member since 2012 · 2k+ posts · 1k+ votes
    10y

    @John Thedford LOL! I've never seen an agent be open to competition!!! Wholesalers solve problems that would just languish and expire on MLS.

    Amanda, what you say and do is key.  An aside is that I've been hearing that FL's Real estate Board is working through the legislator (TBD) changes to make FL similar to OH/OR re how wholesalers are more and more scrutinized.  But to all, watch these videos a credible attorney did interviewing the OH state board of realtors.  The up shot is that you can wholesale in OH and presumably in FL as long as you don't do several things.  

    http://watsoninvested.com/wholesaling/

    You only say to sellers "I buy properties, I'm an investor".  Never say "I will find a buyer for your property", the later is clearly exclusive to licensed folks.

    Never advertise the address or show a picture of the house or interior.  You are marketing a piece of paper a contract assignment.  See the videos.  You can put in ads the zip, the house description and your assignment price, but not the picture or address (per the OH Watson videos).

    etc...

    Another big problem area are sellers who live in the subject home.  I recommend you don';t bother with owner occupied properties.  Way too many blow up scenarios that the wholesaler doesn't normally think about.  Plus its the owner occupant that is the focus of RE regulation protection and why wholesalers should only work vacant houses.

    Just for example; you put an owner occupied house under contract to purchase, you market, but get feed back that the price is too high.  Typical.  You need to cancel and re-nogotiate.  Unfortunately a 10% of wholesale deals end up in this bucket of getting canceled.   In the mean time the occupant signed a lease to rent some other place and has paid for a moving company.  Now you come back and cancel.  This is where wholesalers get sued for real damages done to the sellers.  And why licensing boards are ramping up cease and desists and tightening regs.

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    10y

    @Curt Smith

    If you have seen some of my posts you have an idea of what I think of unlicensed brokers. Never will I use the "w" word that lends any credence to their fringe activities. Actually, quite a few posters agree with me both online and offline. Regardless of these, FL Chapter 475 rules. Someone wanting to act as an unlicensed broker CANNOT control a property with a bogus amount of earnest money. Heard this right from the mouth of someone from DBPR that spoke at our meeting. The amount must be "reasonable" according to them. Exactly what that means is open but certainly trying to put $100 EMD on a 40K or more house would be considered ludicrous. People that try this will more than likely be shut down FAST if a complaint is filed. I have NO problem filing complaints. I have seen the victims!
    My BEST advice to new people that suffer from ED (education deficiency) is:
    1. Take some classes to LEARN before you put some plan into action that may or may not be legal, moral, ethical, etc. The frauds and scammers that promote dishonest dealings have done nothing to help the unlicensed brokering activities space:)
    2. Find funding. REAL wealth isn't made assigning contracts.
    3. Consider getting licensed. You might find more deals and potential partners/investors
    4. Consider a different career if you cannot do those listed above

    We all want to make a living, make a ton of money, enjoy life...but the fact is not everyone will. Some are destined to be a success and others not so much. We can all offer suggestions, but the person receiving them has to do SOMETHING to reach their goal.

  • Investor · Tampa, FL · Member since 2016 · 16 posts · 9 votes
    10y

    @Mike Cumbie, this is an excellent idea- which is why I am highly contemplating obtaining my license anyway. My question is this: Where does that leave the potential client who can't afford significant fixes and closing costs/commissions? Okay, so fixes can be negotiated, or the property can be sold as-is- which may or may not narrow their buying pool significantly. But, 6-7% commission and thousands in closing- when they're already destitute and may lack any significant or no equity? Where do they go? I'm not being snarky, I am genuinely interested. Thanks for you feedback! :) 

    @John Thedford Essentially. Two of which I would be very up front about- leaving no room for anyone to believe I was intending to do anything but (which seems to be the problem with a vast majority in contract assignment,) and if said seller is not okay with that- then my feelings will not be hurt, and they are absolutely free to go in another direction. The other of which I am apparently concerned about- whether I place equitable interest in the property or not.  Though, I am willing to place SOME interest, if it allows me to assist seller and buyer LEGALLY. (Obviously this is money the seller can keep in the event of a "default" of contract... it may or may not be "much".... but it is at least something for their 30-45 day amount of time- which is more than I've ever received from a realtor for taking a home off of the market, month after month, and ultimately not selling it. $100 was also just a hypothetical number.) 

    So I return to my original question- is it ILLEGAL in Florida to market and assign an agreed upon contract even if I have said contract and money, regardless the amount, on the table? And, if my intent is made clear, interest or not, does that entirely negate a deal from the get-go? As an investor, John, have you ever contracted a property via contract assignment? Again, not snarky...I am genuinely interested! Thank you for your feedback as well! 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Curt Smith  it is for this exact reason that if your to be compliant.. that wholesaling is just a non starter for most people.. because they don't have any buyers and the only way they can get them is to advertise the house...

    what ever happened to just doing your job saving some money and then buying rentals.. like most of America does.. why do you have to wholesale houses to presumably get enough money to buy rentals. by the time you pay your marketing costs ( beans) pay your income tax your really only doing another job.. When In fact if most of these folks want in the RE business they would be far better served to get a license go work on a big team get paid to learn and earn while you learn.. and create a career for one's self.. going at it this way has a 97% failure rate.. why do that and blow what little beans you have just to fail and flail.

    And I am sure you know Joel Owens.. I had the pleasure of meeting him in Oakland we were both speaking at the event.. I have not heard or seen one person ask him on BP   HOW do I do what you do and cash 6 figure checks by being a commercial agent... Its real what he does.. its HUGE money and you just need a license to do it.. cost maybe 1,500 bucks.. apprentice at a commercial brokerage.. but there is no hype to it get rich quick in wholesaling BS... if these folks only knew and understood the big world of real estate out there other than this stuff.. sheesh.. pretty frustrating that these folks are so impressionable and really don't have a clue were the money is made in RE.

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    10y

    @Amanda Fishman

    You want to broker real estate without a license. No ifs, ands, or buts. What you are proposing is EXACTLY what an agent does. Why not get your license. See the four suggestions above.

    You came to the forum for legal help? Why not talk to an attorney in person instead of trying to find an unlicensed attorney on BP? Almost the same outcome:)

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    10y

    Sorry, I'm not an attorney.

    You know, the Florida Real Estate Commission really isn't full of monsters, they are in public service and are probably fairly nice people. Why don'y you just call them and tell them what you have written here and ask them if your planned activities would violate Florida Laws and real estate ethics? 

    Really, just call and ask, it won't cost you anything to ask and you'll be getting information from the horse's mouth! 

    BTW, your statement about ethics, I have a feeling you're off a bit on that angle.

    Business ethics, as I just recently posted, is not your opinion or anyone's opinion of what is acceptable in any industry, it's not a religious point of view, it's not what we personally feel might be right or wrong, business ethics are established expectations of conduct for those dealing in that industry. Each profession has a code of ethics, in real estate we have a bit of a problem;

    Just about every profession that deals in the real estate arena has a code of ethics except individuals or entities that operate as "investors", for investors it's the Wild West, each is left to make up their own ethical boundaries. 

    But what we can and should do is look to the established ethical boundaries established by those related professions as this will give you a guideline of what others in the industry expect as acceptable conduct. 

    Personally, I adopt the Realtor's Code of Ethics as that applies to real estate operations, I also adopt the Code of Ethics of lending institutions such as confidentiality, disclosures, fair dealing and much of that is also anchored in law. 

    The short of it is, is that you might do something that is perfectly acceptable in the auto sales arena but that can be highly unethical (and illegal) in real estate. An example might be helping you neighbor sell their car, you find a buyer and the car owner flips you a reward, that may fly without having to be registered as a car dealer, but that is not acceptable conduct in real estate. But, if you go into the business of consignment sales with cars, you'll need a dealer's license.

    Breaking laws is unethical conduct in all industries.         

    Real estate is not a commodity like cars or boots or cans of green beans or airplanes. Commodities can be produced, real property.....dirt, cannot be produced or reproduced. Real property is not personal property and we deal with it differently than personal property. 

    When dirt has a legal description it is real property. The bag of soil for sale at the garden center is personal property.  That's said just in case we have some wise guy remark in the forums. :)

    Now, IMO, what you outlined above is clearly broker without a license, I think you already know that.

    As to contracts, basic contract law requires certain aspects be present for a valid contract, two of those are -the ability to perform as written or agreed and the intent to perform as written or agreed. If one or both of those requirements are missing, you do not have a valid contract! It is voidable.

    We recognize that when we sell real estate the title must be clear of any defects. If you buy a new lawnmower, is there any expectation that it runs properly and is free of defects? Yes! So, one who holds a contract that is defective, it's voidable, are you holding your "product" out as being genuine and free of defects? That's what a wholesaler does, they assign defective contracts. Some may construe that as fraudulent dealing. 

    With just a tad bit of research on the elements necessary to contract you will see what the legal requirements are, it's pretty plain. 

    And, just because a contract is voidable doesn't mean one or both parties will void the contract, but they can and that is the point of the contract being defective. 

    After I did further in depth research into this wholesaling niche, reading opinions of lawyers and regulators, breaking through the glaze at the top, I have formed this more current opinion. I didn't pull my opinion out of my hat. 

    Other than protecting the public from scammers or people who don't have a clue as to what they are doing, I have nothing at steak in defending or attacking wholesaling activities that are carried out by assigning contracts.

    All is not lost, you can do basically the same thing a wholesaler does by taking title so you can sell. You don't need a ton of cash or good credit, and there are several ways to close a deal as required. It's not rocket science! You will then have the intent and ability to purchase, you won't be brokering without a license if you take title then sell. This is not a "double closing" which is now restricted by ALTA, but is a back to back settlement. You buy and immediately sell minutes later. Now, you're ethical and legal at least with regards to the wholesaling thing. :)    

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Bill Gulley  No license needed to broker aircraft.. and if these wanna be wholesalers understood the commissions involved in selling aircraft you would have a flood of videos showing how to tie up a Citation 2 for 4 million and flip it for 4.2  all with no license... or buy them at auctions  Drugs ,, IRS bank repo's polish them change the oil clean the interior and make a few hundred grand  !!!

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    10y
    Originally posted by @Jay Hinrichs:

    @Bill Gulley  No license needed to broker aircraft.. and if these wanna be wholesalers understood the commissions involved in selling aircraft you would have a flood of videos showing how to tie up a Citation 2 for 4 million and flip it for 4.2  all with no license... or buy them at auctions  Drugs ,, IRS bank repo's polish them change the oil clean the interior and make a few hundred grand  !!!

     Real estate isn't for everyone! LOL

    However, doing that as a business I believe you would have a business license, :)

  • Investor · Tampa, FL · Member since 2016 · 16 posts · 9 votes
    10y

    @Curt Smith Thanks for the feedback! This is what I was concerned about. My intent is not to lie to anyone to make a sale (saying I am an investor when I am, at the moment, NOT) but to fill and fix a gap I see daily. There are so many dilapidated, uninhabited, uninhabitable homes in our area. Realtors wont touch them here- I've seen it- because that then forces them to actually scout and research the properties with the same diligence the wholesalers are- and to top it off, it's not worth their "effort" to make 6% on a hill of Pintos (the $50k and under properties.) Especially when there are new developments in the area yielding a much higher return, for barely leaving their computer. 

    I was also wondering about the marketing aspect of it. I see assigners consistently acting as realtors and I always question their ability to do so, seeing as they don't have a property to market, but a piece of paper. Thank you for clearing that up, along with all of the other input!

    @John Thedford- Are there any written parameters as to what an acceptable EMD is, or is this just decided with the change of the wind? How can one, though in authority, decide on a whim what is considered equitable interest; what $10,000 may be to one, $500 may be to another. I've tried to thoroughly understand Chapter 475- but have never found anything specifically regarding, there or otherwise, EMD or what is considered acceptable. Thanks!

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    10y

    @Jay Hinrichs

    Brokering aircraft? Can it be done with no money down? Do I need earnest money? What contracts do I need? What happens if I can't find a buyer? 

  • Attorney · Winchester, VA · Member since 2015 · 726 posts · 387 votes
    10y

    If you are looking for legal compliance advice, get an attorney. Do not rely on the advice of anyone other than a license attorney in the particular state you want to do business in. As well-intentioned as anyone may be on this website, there is no substitute for a locally licensed attorney given the complex regulatory nature of these things. 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @John Thedford  absolutely it can be... I have sold 4 of my aircraft through brokers they get listing agreements.. they advertise them.. take the potential buyers on pre buy flights to make sure the avionics autopilot etc is all working.. they help arrange financing..

    they wash the plane and fill it with fuel when its delivered to the new owner..  in my case fill up is 82 gallons and 520.00 dollars  LOL...

    No licensed needed they charge between 4 and 6%  some only sell jets that cost 2 to 25 million.. so you can do the math... but I sold mine in the 200 to 300k range and paid 12 to 18k in commission.. I don't have the time to meet and qualify buyers.. although when someone is buying a 200 to 300k aircraft or more they are usually serious and have the dough.

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Matthew Kreitzer  Listening to attorneys on state regulatory issues has gotten me in trouble.

    I now only have my attorney write  a letter to the state and outline what we want to do and I get it in writing from the state first... Attorney slant on code may not jive with the state and then you have to go to battle at the administrative law court... and that is quite expensive..

    I like @Bill Gulley advise simply call the department of RE and ask them... its pretty black and white out our way

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    10y

    @Jay Hinrichs

    Sincerely, thanks for the response. My post was in jest. Did the questions sound familiar to some of the posts on the BP forums:)

  • Attorney · Winchester, VA · Member since 2015 · 726 posts · 387 votes
    10y
    Originally posted by @Jay Hinrichs:

    @Matthew Kreitzer  Listening to attorneys on state regulatory issues has gotten me in trouble.

    I now only have my attorney write  a letter to the state and outline what we want to do and I get it in writing from the state first... Attorney slant on code may not jive with the state and then you have to go to battle at the administrative law court... and that is quite expensive..

    I like @Bill Gulley advise simply call the department of RE and ask them... its pretty black and white out our way

     Like all professions, there are a few bad apples out there or attorneys who try to push the envelope and get their clients in trouble. However, I think a person is far more likely to get actionable advice from an attorney than a non-licensed individual. Not only that, but there are some built in protections for relying on the advice of counsel as opposed to non-attorneys.

  • Investor · Tampa, FL · Member since 2016 · 16 posts · 9 votes
    10y

    @John Thedford I'd just been perusing this site, and seeing as there seemed to be an abundance of people in various niches of real estate- figured I would throw it out there and weed through what was relevant, and what was not. Even better if it happened to be an ACTUAL RE attorney. Though I now see a general consensus among realtors, I still plan to contact that attorney! Thank you for reaching out! It is appreciated! 

    @Bill Gulley Thank you for the advice. I will most certainly give them a call! Question: If an assignment contract on the whole is defective- why is there no stop put to it by closing attorneys/title companies before it ever hits the closing table? Is it just being misinterpreted as legal, or is there a lack of knowledge in what to look for? As far as ethics- whether what I said was ethical or not- if the practice is illegal or unethical, then I don't wish to partake. Like I said, there is nothing worth my conscience or my family. Thanks in advance! 

    @Jay Hinrichs I actually have quite a few investors in place, after months of plan development, who are interested in the exact houses I was seeking to place under contract- without ever having marketed an actual house. So, though they could decide the EXACT house is not for them, that wasn't entirely my concern. My concern WAS doing it with little to no funds, legally. And, since you asked, I currently have four mouths to feed, on one income that doesn't cover many of the things required to allow me to enlarge my bank account. MOST of America is sitting in a toilet waiting for the flush- no matter how hard they work. Like most, my family seeks financial freedom- not billions necessarily, but stability.  We didn't say we weren't willing to work our butts off with honesty and intrgrity, or budget for it- just that some plans, without running yourself to the absolute bone, are a little more lucrative and even more feasible to personal situations than others. I was always taught to work smarter, not harder- and did so prior...but that's an entirely different story. If you feel you have the know how to mentor someone on where the REAL money in real estate is made, as opposed to me sitting here, remaining impressionable about pipe dreams- please reach out to me! I'd love to find the hear about the real secret! Or, maybe now I'll look into airplanes. Thanks for the feedback! 

  • Investor · Tampa, FL · Member since 2016 · 16 posts · 9 votes
    10y

    @Jay 

    @Jay Hinrichs I think @John Thedford was being snarky. 

    I wonder why so many, who are obviously annoyed by someone asking an honest question, choose to actively comment extensively on such? You'd think they'd disable the notifications or spread their knowledge where they feel it put to better use, if they believe it's continually falling on deaf ears or being shared with those less intelligent for even considering such. Though, I do lean toward heeding your advice Mr. Thedford. Rest assured. 

    @Matthew Kreitzer Thank you for your honest feedback, and for not partaking in the unwarranted repartee. It is much appreciated! 

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Amanda Fishman  going to an attorney for this will probably blow most of your marketing budget.

    Bills advice to call the state is free and that's the bottom line.. get it writing from them.

    Wish you the best of luck !!!

  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    10y

    @Matthew Kreitzer  Totally agree with you on listening to the peanut gallery here on BP :)

    I think Bill's advice to contact the state is appropriate and free...

    this person is on a budget from the sounds of it and you know an attorney would probably charge an hour or so.. not sure what attn.s  in that part of FLA make we pay 275 to 500 an hour out our way is the going rate.

    given this is a business they want to start getting with the state seems a prudent approach and cost effective..

    Now my dealings with regulators are far more complex and had to do with securities and my attorney gave me some bum advice.. and they are a top law firm.. attorney had his position the state had theirs.. and it was off to administrative law judge if we wanted to change the states interpretations .. I ended up with a 5k fine and promise not to do it again.. and blew about 40k on attorneies.. so from now on I would rather pay my attorney 500 bucks to write a letter to the state and get what ever new model I may be cooking up .. blessed first

  • Mike CumbieBusiness Member
    REALTOR® · Brockport, NY · Member since 2015 · 3k+ posts · 4k+ votes
    10y

    "his is an excellent idea- which is why I am highly contemplating obtaining my license anyway. My question is this: Where does that leave the potential client who can't afford significant fixes and closing costs/commissions? Okay, so fixes can be negotiated, or the property can be sold as-is- which may or may not narrow their buying pool significantly. But, 6-7% commission and thousands in closing- when they're already destitute and may lack any significant or no equity? Where do they go? I'm not being snarky, I am genuinely interested. Thanks for you feedback! :)"

    No Problem,

    You can charge whatever commission you want. Honestly our board is quite specific about informing people of that and NOT saying "Standard commission is 3% or 6% etc" In one hand you charge a "fee" to assign the contract of whatever you choose. In the other hand you charge a "commission" to sell the house. If they are already low on money the only difference is what you charge as a fee or commission, the rest is all parts of closing. If you are licensed or not the amount you take out of the deal is agreed upon between you both... in both cases. If you charge a 5K assignment fee or a flat 5K commission either way they are in the same boat. One way you are licensed and can advertise everywhere legally, the other you can advertise secretly and not mention the address or put pictures out etc.

    @Matthew Kreitzer is correct though, as a lawyer would be the best avenue for an official answer. I would guess it is hard to find one who says "I recommend Wholesaling instead of paying $300 for a license" though.

    I wish you the best!

  • Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    10y

    @Amanda Fishman

    @Amanda FishmanYou said "Question: If an assignment contract on the whole is defective- why is there no stop put to it by closing attorneys/title companies before it ever hits the closing table? Is it just being misinterpreted as legal, or is there a lack of knowledge in what to look for? As far as ethics- whether what I said was ethical or not- if the practice is illegal or unethical, then I don't wish to partake. Like I said, there is nothing worth my conscience or my family. Thanks in advance!"

    A title company or closing attorney isn't there to question your intent or ability to perform, an assigned contract by someone who had the intent to buy as well as the ability to buy may have other business reasons to assign the contract and not purchase as they originally agreed to do.

    This is the guru twist, they took a perfectly legal function that can be used and twisted the the proper use or method by applying as a scheme to be used by those with no money, no credit, no job and no knowledge. It made a great guru product for them to sell and build upon to make money teaching this. But it is flawed when contract requirements can't be met, but those gurus could care less about you or how you do things, there is no skin off their nose if you get in trouble. 

    IMO, contracting, promising to do something, knowing you're not going to do it as you say or imply and not even having the ability to do what you say or imply is simply fraudulent, you know you're lying and yes this is unethical conduct in real estate.

    Now, if you think the ethical matter goes away by disclosing to an owner that you're just marketing a contract to sell their property for them, you're acting in an agency position for a principal, you're they agent the owner is the principal. This is just Agency Law, you can look up the different types of Agency and how they are formed with or without consent.

    Your RE Commissions will look at giving such a disclosure as forming an agency relationship, without a license, = ZAP! And that is what you're doing, acting as an agent.

    So, disclosing your true intent or lying about it, either way it's unethical and/or illegal. Period!

    I think I know how some regulators think because I use to be one, but I'm not your regulator, IMO this assignment of contract stuff passes the test of scamming homeowners, it's unethical. 

    The only alternative is to learn how to close deals in your name and then act as a seller, that is the only way to avoid these issues.

    And Matthew's post is exactly correct, see a local attorney and a reputable one! :) 

  • Investor · Tampa, FL · Member since 2016 · 16 posts · 9 votes
    10y

    Thank you, again, Bill and Mike! Your input is fair, and something I will heed! I really appreciate all of the input here today- no matter the fuel. Definitely gave me more to think about! 

  • Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
    10y

    @Amanda Fishman

    Yes Amanda, the post was in jest. The brokering real estate without a license realm is huge, heavily promoted, and often with the worst advice and lack of integrity. Do call the state regulatory agency...DBPR...Division of Business and Professional Regulators. www.myfloridalicense.com. I still believe that getting your license and working in the realm will offer you the most possibilities of making money. 

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