Permission to market equitable interest?

Question

Hello BP!  I'm working as an agent for wholesalers.  The listing agent on a contracted property discovered they wholesaler was marketing the property.  She claimed they are not allowed to do that or take pictures of the property without the permission of the seller.  She also stated that the buyer was deceiving the seller with their intent on the deal.  The sellers thought they had a "real buyer" and are upset the wholesaler is marketing it for $10K more than the contract price.

Question - Does the wholesaler have any obligation to ask permission from the seller or disclose marketing their interest (i.e. the contract for sale) in the property?  Any legal references would be helpful.

Secondary question - Is there anything unethical on my part (the agent) in writing contracts with advanced knowledge that the buyer intends to wholesale it?  Thoughts?

Many thanks!

Jay Hinrichs · Answer

Well Don  you ask on BP and your will get a thousand answers  LOL... don't you have a hot line to your free legal aid at your real estate agency.. or talk to them.. don't talk to the internet  they are not the rule makers  good luck with it.

Jay Hinrichs · Answer

Well then Don as an agent what do you think this wholesaler is doing then.. do you think he is selling real estate without a licesne  or is he hiring you to do this for him ?? that is a big distinction

and if he is.. then yes I would think you would need some disclosures.. I would talk with your managing broker and get their blessing then off you go.

Jay Hinrichs · Answer

Well if your selling a contract / through the equitable interest noxious why the need for pictures or inspections or anything else...

Well the reason is your ( and I am not talking about you directly but the act of so called wholesaling)

YOur selling real estate your taking pictures doing invespection etc etc..

if your selling a contract no pics needed. you just say I have a contract on this address.. no pictures no inspections.. Anything past that in my mind is selling RE without a licesne

and totally misleading the sellers as to intent.

Don Nelson · Answer

Thanks @Jay Hinrichs - I'm the managing broker.  He's selling a contract, as he doesn't own the property - pretty simple.  There are legal definitions involved here and that is more what I was hoping to get help with.  I know a lot of listing agents get offended at what wholesalers do - I am not one of them.  I just want to know what the law says about getting permission from the seller for the buyer to wholesale, or whether they can take pictures or use pictures from online, etc

Don Nelson · Answer

@Walter Roby jr, the properties are not marketed until they are under contract.  I am the agent working with the buyer/wholesaler.  @Jay Hinrichs - this debate is an old one I think.  No one markets or buys a contract without knowing what the contract represents/is for, right?  You don't buy a stock option without knowing what the stock is, nor can you market a property contract without knowing about the property.  Thank you for the input, gents.

Walter Roby jr · Answer

They should not market a property they do not have under contract; meaning if they haven't agreed upon a price with the seller/listing agent and signed a purchase agreement, they should not be marketing their interest in the contracted property.

Secondly as an agent, it is your fiduciary duty to disclose all known facts to your seller. So if you are aware that the wholesaler is not the end buyer then make sure your seller is aware. If the seller is ok with it and signs the purchase agreement then its fair game.

Don Nelson · Answer

Wow - no replies out there?  Thoughts?  Anything would help.

Permission to market equitable interest?

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