Assignments in NJ considered unlicensed brokering

[Jason O.]

I just spoke to a NJ real estate commission investigator. He says that assigning contracts in NJ is brokering without a license. He said taking a home that you don't own and selling it for a commission is unlicensed brokering.

But, flipping homes (buying to own and selling) is legal and can be done the same day.

I think I'm going to get my real estate license in NY for rentals, anyway.

[Ryan Webber]

The verbiage used is EXTREMELY important.

Let's be clear, taking a home you don't own and selling it for a commission IS real estate brokerage, and if you don't have your real estate license, it WOULD be unlicensed brokerage.

Now taking a contract to purchase or an option to purchase that is between YOU and the seller and selling YOUR interest in YOUR contract is not real estate brokerage as defined by any state's licensing laws that I've read. Which to be fair I've only read 3 or 4 different states licensing laws.

You are NOT selling someone else's property for a commission. You should never allude to anyone that you are, because you are NOT. You are not selling someone else's property. You do not represent anyone. You are not their friend. And you are not giving them a service for a fee or a commission.

What you are doing is taking YOUR equitable interest in a property that you obtained via a sales or option contract and selling it to someone. You ARE selling YOUR interest in the property. Your interest is the right to buy the property for so and so price by so and so date. You are selling that interest, that right for a price.

You do need to be extremely careful how you present to sellers and buyers what you do. You are not an agent. You do not represent them. You are not there to help them. You are not trying to sell their property for them or to find a property for them. You are buying and selling properties for YOURSELF. You buy properties for yourself and you sell properties for yourself. That's it.

If you want to snuggle up to the seller and share with them that you are trying to find them a buyer for their property or in any way represent that you are working "for" them or "helping" or "serving" their interests then YOU NEED TO GET YOUR LICENSE!!! Because you are practicing real estate agency.

Wholesalers are NOT agents. We buy seller's houses. We do NOT find buyers to buy the seller's house. We sell houses. We do NOT find houses for our buyers to buy.

I just went through this with someone I'm training and you need to be very careful. There have been court cases over this very thing. You need to be careful how you present your services to buyers and sellers.