Originally posted by @Will Barnard:
Originally posted by @Storm S.:
Originally posted by @Will Barnard:
Originally posted by @Storm S.:
Assigning purchase and sale agreements on a one-off basis with the original intent to close does not violate the law but its specifically mentioned if you do it 8 times you need to be a broker
Again, we all would like to see this verbiage from the CA department of real estate you claim you have.
My research on the subject direct from the CA DRE states: “Without a license, an individual cannot receive compensation for the performance of any of the acts defined as being within the purview of a licensed broker or salesperson. In addition, the law provides penalties for a person who acts or purports to act as a real estate broker or salesperson without being duly licensed.”
Acts defined within the purview of a licensed broker or salesperson include bringing a buyer and seller together with the expectation of receiving a fee & publicly marketing a property you do not own or hold title to. Anyone expecting to negotiate a purchase contract with a seller with an assignment clause, then marketing that property and/or contract for sale to other potential buyers and receiving an assignment fee fully violates CA DRE regulations and is a misdemeanor punishable by fines, jail, and/or restitution. Feel free to read the CA DRE regs yourself if you don’t believe me. There are no 8 freebies to the rule.
Perhaps you are confusing becoming “dealer status” as defined by the IRS which has nothing to do with the legalities of brokering without a license as defined by the CA DRE and most other states real estate department statutes.
I am definitely not mixing it up with dealer status. Here is a link to the state law in the Business and Professions Code.
https://leginfo.legislature.ca...
10131.
A real estate broker within the meaning of this part is a person who, for a compensation or in expectation of a compensation, regardless of the form or time of payment, does or negotiates to do one or more of the following acts for another or others:
(a) Sells or offers to sell, buys or offers to buy, solicits prospective sellers or buyers of, solicits or obtains listings of, or negotiates the purchase, sale, or exchange of real property or a business opportunity.
(b) Leases or rents or offers to lease or rent, or places for rent, or solicits listings of places for rent, or solicits for prospective tenants, or negotiates the sale, purchase, or exchanges of leases on real property, or on a business opportunity, or collects rents from real property, or improvements thereon, or from business opportunities.
(c) Assists or offers to assist in filing an application for the purchase or lease of, or in locating or entering upon, lands owned by the state or federal government.
(d) Solicits borrowers or lenders for or negotiates loans or collects payments or performs services for borrowers or lenders or note owners in connection with loans secured directly or collaterally by liens on real property or on a business opportunity.
(e) Sells or offers to sell, buys or offers to buy, or exchanges or offers to exchange a real property sales contract, or a promissory note secured directly or collaterally by a lien on real property or on a business opportunity, and performs services for the holders thereof.
https://leginfo.legislature.ca...
10131.1.
(a) A real estate broker within the meaning of this part is also a person who engages as a principal in the business of making loans or buying from, selling to, or exchanging with the public, real property sales contracts or promissory notes secured directly or collaterally by liens on real property, or who makes agreements with the public for the collection of payments or for the performance of services in connection with real property sales contracts or promissory notes secured directly or collaterally by liens on real property.
(b) As used in this section:
(1) “In the business” means any of the following:
(A) The acquisition for resale to the public, and not as an investment, of eight or more real property sales contracts or promissory notes secured directly or collaterally by liens on real property during a calendar year.
(B) The sale to or exchange with the public of eight or more real property sales contracts or promissory notes secured directly or collaterally by liens on real property during a calendar year. However, no transaction negotiated through a real estate licensee shall be considered in determining whether a person is a real estate broker within the meaning of this section.
(C) The making of eight or more loans in a calendar year from the person’s own funds to the public when those loans are held or resold and are secured directly or collaterally by a lien on residential real property consisting of a single dwelling unit in a condominium or cooperative or on any parcel containing only residential buildings if the total number of units on the parcel is four or less. However, no transaction negotiated through a real estate broker who meets the criteria of subdivision (a) or (b) of Section 10232 shall be considered in determining whether a person is a real estate broker within the meaning of this section.
(2) “Sale,” “resale,” and “exchange” include every disposition of any interest in a real property sales contract or promissory note secured directly or collaterally by a lien on real property, except the original issuance of a promissory note by a borrower or a real property sales contract by a vendor, either of which is to be secured directly by a lien on real property owned by the borrower or vendor.
(3) “Own funds” means either of the following:
(A) Cash, corporate capital, or warehouse credit lines at commercial banks, savings banks, savings and loan associations, industrial loan companies, or other sources that are liability items on the person’s financial statements, whether secured or unsecured.
(B) Cash, corporate capital, or warehouse credit lines at commercial banks, savings banks, savings and loan associations, industrial loan companies, or other sources that are liability items on the financial statement of an affiliate of the person, whether secured or unsecured.
(4) “Own funds” does not include funds provided by a third party to fund a loan on condition that the third party will subsequently purchase or accept an assignment of the loan.
This is pretty cut and dry to me if you do more than 8 wholesale deals a year and you are unlicensed there are no loopholes to save you.
