Fraud By Inducement, Unlicensed Brokering, Preying On The Elderly

[John Thedford]

All the gurus, etc promoting unlicensed brokering forgot to mention this: many of their ideas are illegal in some states. In Florida, you cannot advertise property you do not own even if you have a contract on the property. That is clearly set out in 475.43. Those using contracts as a way to broker without a license are operating illegally. It might be prudent to consider how to operate legally if you want to build a RE business. IMO, the only way to legally "wholesale" is to close and then resell (unless you are a licensee). 

The stuff has hit the fan in Collier County. A local guy put a house under contract, proceeded to bring "inspectors" through the house that don't appear to be inspectors, pushed the owner to sign a contract, allegedly made several misleading statements, and induced the owner by making a claim of purchasing the house when in fact they were brokering the deal (illegally). The seller backed out, and now the "buyer"--who wasn't a real buyer, and the person they assigned to, have filed suit. The seller has now hired a top notch RE law firm in the area, and a countersuit is being filed. Among the counter claims are FRAUD, violation of FDUPTA, preying on the elderly, brokering without a license, etc. 

Walking in, making untruthful representations, using deceit, and entering into contracts under fraudulent pretenses is NOT the way to operate. I believe this "buyer" believes they have the seller against the wall, will get a judge to order transfer, and receive damages. They have NOT seen the counter claim, and that is when their plan is going to probably fall apart. 

If you want to operate in Florida you need to know parts of 475, particularly 475.43. I just posted in another thread where a BP reader just got a house under contract and now asks "now what". Before you sign any contract, consider your obligations, not just your need to make money.