Is it appropriate for a Real Estate Agent to wholesale an "as is" property that is not marketable on the retail market (due to poor condition, deferred maintenance)? And if so, does there need to be a discussion with the broker since they would want a slice of the pie?
The short answer is no. As a wholesaler you are not representing the buyer or the seller. You have placed a property under contract to purchase and are selling your rights in that contract. If you are selling the property as a listing agent then you are representing the seller and thus would fall under the normal parameters of a property listing and commission splitting. If you are doing this while employed under a broker you need to discuss his/ her take on it first anyway but standard commission structures do not apply to wholesale deals because... You are signing a contract to buy the property, you personally, you are selling your personal rights to that contract, you are NOT selling the house.
@Bryan Chuchta is technically correct, but it may depend on the laws in your state. As he mentioned you ABSOLUTELY should discuss this with your broker. He is assuming liability for you and your actions. Additionally, make certain that you disclose that you are a licensed agent, and I would highly recommend that you get something in writing from the seller, signed, stating that he understands you are not offering to represent him as an agent and are entering into the purchase contract with the intent of making a profit.
Discuss it with your broker. All real estate activities you engage in need to be approved by your broker as their insurance can have a clsim filed against for any of your activities.
I did this for years as a licensed broker in CA.. basically that's all I did.
I did not enter into an agency with the seller I bought the property from the seller
I disclosed I was an agent and buying for profit or loss...
I paid cash closed then did my thing with the asset and resold it..
hopefully for pofit but sometimes it was a loss :)
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