Advice need in Maryland for wholesale property!

[Leah Taylor]

Hi, I'm a new investor and believe I have a good potential. Listed at 120k, comps are solid at $250k. Problem is haven't seen the property, owner is still in property and it's been listed for 1 day. What are the risk if I offer full ask sight unseen?  It's a 1100sq ft home, imagining Reno can't be too excessive especially if owner occupied. I don't want to loose a good deal because I'm nervous I haven't seen yet. Any advise?  

Thanks!

[Russell Brazil]

Originally posted by @Leah Taylor:

@ Russell Brazil - why do you say not to participate in wholesaling as a real estate agent?  I would be conducting the wholesaling aspect as an investor.  

 If you are a licensed agent in the state of Maryland (as well as DC), who is your first duty to? Is it your client? No. Is it to yourself? No. Your first duty in those states is to the public. So if you misrepresent the value of a sellers home to them, then you have broken the law. So I'd highly suggest then that while you are attempting to wholesale that you tell the seller I'll find a buyer for your house at X, but if I list it on the open market and I could sell it for Y.

Also does your broker know that you are wholesaling? If they do, then you have shifted much of the risk onto them. If they do not, then you are in violation of the law. Your broker (or manager in multI site brokerages) needs to be aware of all of your real estate activities, and approve of them. The brokers act requires their supervision of all your real estate activities.

Also does your e&o insurance cover you for wholesaling? 

When you get your license you subject yourself to the terms of the brokers act, and all related avenues of law assosciates with it. (Guidance memos for example)

Note, I'm not commenting on whether wholesaling is legal or not, but rather I am saying in this state I do not believe it to be prudent for licensed individuals to participate in it.

So definitely talk to your broker about it. If they say you can not do it, you can't as you are under their supervision. If they say you can, most of the risk shifts to them, but not all. If they do say yes, I'd suggest contacting the real estate commission to just be sure.