Comments on Illinois Wholesale Activity

[Bob Floss II]

The topic of wholesale activity came up in a discussion among Illinois real estate attorneys. One attorney shared an email exchange he had with an attorney at IDFPR.  I'm sharing here to help keep the community informed and protected.

********Email from counsel to IDFPR**********

S is selling their property for $95,000.00 and B signs a contract to purchase S' property, with the right to assign the contract. B then assigns the contract to A. At closing, B receives a $3,000.00 assignment fee from A. B is not a licensed real estate broker. The contract is not contingent upon B finding an assignee. If B doesn't find an assignee, B must still close the contract. 

********Response from IDFPR****************

You recently contacted the IDFPR regarding an inquiry about wholesaling real estate and whether the practice was prohibited under Illinois law. The practice you described in your inquiry is prohibited. Please see the pertinent sections in the Illinois Real Estate License Act of 2000. Any person or entity engaging in a form of the activities described may be engaging in activities that require a license.

This correspondence reflects the interpretation of the Department on the particular matter you described and is not intended as an official opinion of the State of Illinois. Only the Attorney General of the State of Illinois is empowered to render formal opinions concerning the laws of this State. Thank you.

[Darron Washington]

read a few articles this week about the matter even saw bill SB1872. Any updated thoughts?