Assigning this type of property? Legal or not!?

[Jason K.]

Can a LICENSED investor, with intent to Wholesale the property or assign it, get a property under contract listed by a realtor?

Basically the same scenario as going directly through the homeowners, but instead, you go through their agent, using your same verbage, contingencies, etc.

For this scenario -- Buyer, who is also an agent remember, will allow listing agent to reprsent him in sale.

Buyer, even though licensed, still has equitable interest in property & is capable of marketing property to end buyers after execution of contract, correct?

He Collects assnmt fee @ closing, the agent gets double commish, endbuyer is new homeowner.

Is this transaction permissable, or not? If not, what issues are you aware of, or buyer expect? If you are licensed, have you done a deal like this?

If you have a thought that does not include "seek legal advice or your broker", please do share!! All feedback welcome.

(ps. investor has disclosed to all parties his licensure) :D

[Bill Gulley]

All valid good points IMO.

IMO, your strategy will be up to your broker first of all.

If you are using options and never buying I can see a problem becuase you will not be the buyer, your buyer will take title from the seller. Giving up your commission is irrelevant (and I have done the same thing to have the listing agent push the deal too, so nothing wrong there).

Look at it this way, I;m the seller. My listing agent says he has another agent who wavied his commission as a buyer. In my state all contracts are assignable unless stated otherwise, so as the seller and my listing agent never suggests I address assignability. Then you go out and find a new buyer who pays you more and assign the contract.

Now look up the definition and intent of a net listing. Where a licensee sells for more than the seller is willing to accept and pockets that difference.

If you take title you don't have a net listing issue, you can buy low all day and sell for a profit, no law against that.

Next are disclosures required to be given by a licensee, even if you are not benifiting from a sale transaction, you must inform, usually at the first opportunity, that you are a licensee. No problem, disclose.

But, even if you did sign a dual agency agreement as a buyer, that does not limit your responsibilities as a licensee. Having a RE license you will be seen throughout the transaction as being a sophistacted buyer and the lising agent will not be representing you.

A listing agent who later goes into a dual agency relationship does not, at that point, represent either party, they can not, all they do is facilitate the transaction.

So, really, IMO, a dual agency would not be the thing to do. I would want the listing agent to represent the seller because if they do not and the deal blows up, whos fault would it be, there would be no responsible agent, no E&O insurance policy to cover certain acts or ommissions. I want the seller represented as it provides a deeper cut to carve out if legal action is ever required.

I would represent myself, but I can simply waive my commission and allow the listing agent (and broker) to get the entire fee.

On your side, you might check on your E&O policy as it may only cover closed transactions where a commission is paid, so you might be doing deals as an agent without coverage. Your broker will know how this aspect works. Then comes the issue of your broker having some risks involved with you out there doing dealsand not receiving any compensation, that is rather unusual, but some brokers will allow you to buy X number of properties for your own portfolio without paying the office.

Good luck