Is wholesaling the same as net listing?

Question

Newbie realtor here! Wholesaling sounds a heck of a lot like a “net listing”- which is illegal in my state of New York. Can anyone clarify? Thanks!

Steve Morris · Answer

"Any fee paid is NOT a fee for real estate services provided"

I dare you to go to the MA REA and tell them that.

You are arranging the sale of real estate in the expectation of a fee for your activity.  Any activity is directly related to the sale of real estate.  No activity = no fee.

At least be honest.

Wayne Brooks · Answer

Yeah, that’s the theory/justification used by wholesalers.  But most states have revised their real estate brokering laws to address this...in most, advertising a property for sale you simply have a contract on, violates the current licensing laws. Simply stating “contract for sale” doesn’t skirt the laws.

Steve Morris · Answer

"Regarding, the assignment fee - it is not a fee for real estate services, it is a fee for assigning the contract."

Which is directly related to the property transacting.

If I call my fixed-price commission, a fixed-priced consulting charge based on pricing, you really think any is going to buy that it's not a commission?

Moises R Cosme · Answer

@Steve Morris    The only wholesale transactions we engage in are situations where we take possession of the property through a formal closing and resell at a profit.  Regarding, the assignment fee - it is not a fee for real estate services, it is a fee for assigning the contract.  Again, my response was to the post not indicative of what I do.

Moises R Cosme · Answer

Rebecca, I am NOT an Attorney & I do not practice real estate in New York...

The key to a wholesale is to have an assignable contract.

1. You as the wholesaler find a property owner

2. you & the property owner make a deal and sign an assignable contract

3. you then find another Buyer, that is willing to pay an assignment fee for transfer of the contract to them

Any fee paid is NOT a fee for real estate services provided, it is a fee for the right to take over the contract.

Is wholesaling the same as net listing?

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