Is wholesaling considered illegal in New Jersey?

Question

Jonathan Herron · Answer

@Joy Jones it is legal in NJ so long as it is done right.  If it appears that you are merely acting as a broker for the original seller that would not be legal.  However; as a wholesaler, you are contractually adverse to both the original seller and the ultimate buyer.  By trying to make the original sale price as low as possible and the assignment fee as high as possible you are not an agent of either party.

That said if it appears you are claiming to sell the property and not the contractual rights to purchase the property it might be deemed that you are acting as an unlicensed real estate agent.  Every state has its own laws regarding this so it is important to make sure any information you are getting is NJ specific.

Joy Jones · Answer

Thank you so much!

Karen Rittenhouse · Answer

@Joy Jones

Check with a real estate attorney in your state, but wholesaling is pretty much legal in every state because you are purchasing a property. Legal. You then mark it up and sell it - like a for-sale-by-owner. All perfectly legal. You can sell any property you own without a license.

The second part of your question, selling a contract, is called assigning or assignment. That is not legal in all states so, again, check with a local real estate attorney. In most states assigning contracts is perfectly legal however, again, not in all states.

Real estate law is very state specific so be sure to check your state laws to be certain.

Irina Belkofer · Answer

If you are finding a seller and a buyer for the same property, making them sign an agreement and receiving the commission for that - it's brokering without license, depend on your state, it's a lot of money and sometimes jail time.

There are plenty of lawyers on Ytube trying to make it as selling a contract: unless they give their advice in writing to be responsible when you pay $10K+ to the state, I wouldn't hold my breath.

you are not selling a contract: you bring to the seller a purchase agreement (as a listing agreement) to buy his property yourself or someone you know....then you find a buyer to buy it for cash. So you're de facto realtor practicing real estate without license......do you think it's perfectly legal?

I know people do it .......but it's still doesn't make it right

There are plenty of tricks to make it look decent but the best approach is to get your real estate license....it might cost you cheaper than get into trouble

Is wholesaling considered illegal in New Jersey?

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