Wholesaling as a Realtor?

Question

Hello BiggerPockets,

I was on the edge about wholesaling as a Realtor but after seeing local Realtors/Investors do it in my market, I figured I can too. I also heard it on a podcast about how an agent handles his business, he shows his seller both ways in how he can help getting the property sold as a Wholesale or Retail and I understand that sellers would much rather get the cash offer and be over with it.

I am here today in search of Samples of what a real estate agents assignment contract would look like? Do you guys disclose of your Agency on the assignment contract or do you structure them any differently than a Regular assignment contract?

Pratik P. · Answer

You can't do an assignment contract while at the same time represent the seller. It's a conflict of interest. If you wanted to wholesale a property, you should disclose within the contract that you are a licensed agent who is a principal in the transaction and do not represent the seller in any manner.

When we go on appointments, we always make our cash offer first. If they don't like it, we offer to list the property on the MLS and try to get them a higher price.

Albert Stancato · Answer

I would like to address the Realtor vs Investor hats in wholesaling... As a Realtor, you work for a commission. What allows Non-Realtors to wholesale is that they are working for a fee. As an example, if I offer a wholesale deal to another investor, I am offering to assign my signed purchase agreement to them for a FEE, and not earning a commission on the selling price. This type of transaction is completely detached from my Managing Broker & My License. The have no need to get involved nor know of the transaction.

I find the client, sign a purchase agreement with the client as my LLC. I assign the purchase agreement to an investor for a set fee (not included in the purchase price). The title company will use my purchase agreement which states the selling price, the name of the Assignee (investor), and my FEE the investor is to pay for the right to purchase to contract & close with my client. I am paid with a check at closing from the title company.

Chase Maher · Answer

What @Pratik P. said is on point.

Disclose, always. Tell the truth, always.

I place all my marketing around quick cash offer for sellers. In my market (SD) wholesaling is tough, sellers are savvy, so many times the seller and I both agree listing is better... at that point I have built rapport and seller wants a no BS agent.

Its just another tool in your tool belt, pick which you want to focus on, have that be your goal of your marketing, and use the other when needed.

Ben Stoodley · Answer

@Chase Maher would be an excellent resource for you !

Chase Maher · Answer

As a cash buyer.

No because I am not acting as an agent.

I disclose in my purchase agreement and if they ask, I am always truthful.

Kenneth Jester · Answer

@Chase Maher awesome! Extremely helpful thanks so much!

Albert Stancato · Answer

I had an attorney construct an agreement stating that I am a licensed Realtor, but acting on behalf as an investor when I conduct any business which is a known conflict of interest against my state license. Get it in writing!

Tracy Levy · Answer

@Albert Stancato

If you have your own LLC and your sponsoring broker does not offer wholesaling and/or consulting can you run wholesale deals on a 1099 basis?

Kenneth Jester · Answer

@Chase Maher how do you market for wholesaling? Do you have to put your brokerage on all advertising or can you advertise as an investor and disclose you’re an agent as first point of contact?

Albert Stancato · Answer

Additionally, disclose fully to your managing broker your intents to wholesale and have them place a copy of the disclosure I previously mentioned in their file. Not all managing brokers understand investing, and may not support it!

Wholesaling as a Realtor?

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