Legal Advice on Wholesaling Through Realtors
So I am in the process of setting up a wholesale business (Roanoke first, then Knoxville). I have been working very hard at developing the "backside" of my business before going live; getting budgets and accounts in place, establishing my LLC, website registered, extensive buyer list, etc.
One tactic that I have been introduced to has been working with local realtors to find deals before they reach the MLS. In a nut shell I establish relationships with local realtors who list homes in rental areas (check). Next, I find a realtor who is willing to work with me on writing deals and representing me (check).
But here’s the snag I’ve hit, the realtor and firm who is willing to work with me turned me down once I reached their legal group. This after meeting with the realtor, their broker and their in house title agency. All three of the former were good to go, just the legal group who said, “pass.”
The legal concern was the liability in representing me as the wholesaler. According to their legal group “wholesalers are always being taken to civil court” presumingly because the wholesaler does not follow through on the contract they wrote to purchase the property. The assumption from the legal group is that the wholesaler was unable to find a buyer for the contract so they do not close, thus moving the issue to civil court.
So a long story short, the legal group does not want to be exposed to such liability. I hate this because up to this point the realtor, broker and title agency are all on board.
How can I work around this as a newbie wholesaler? Has anyone else experienced this as a wholesaler? Is double closing the only option to solve the problem (I understand I then need to have the cash to close)? Or is there another work around to having them represent me as the wholesaler and me limit their liability?
Thanks for the input!