Can you post a wholesale deal on FB marketplace?

Bloomsburg, PA · Member since 2020 · 44 posts · 11 votes

I currently have a property under contract in Portland, Oregon. I'm curious if I'm allowed to post a Facebook marketplace listing for it? Is this something I am allowed to do being that I'm marketing my equitable interest? Let me know what you guys think.

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Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

Originally posted by @Joe Splitrock:

Originally posted by @Jared Hettler:

Marketing involves any sales activity. Posting on Facebook is most certainly marketing, but even e-mailing a deal to someone in private is marketing. The difference is in one place you are doing it in the public, where it is easier to get caught. @Jay Hinrichs though

Yup violation of real estate brokerage laws.. this state does not agree with the equitable interest theory taught by the gurus..

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Joe SplitrockPro Member
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Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
5y
Originally posted by @Jared Hettler:
I currently have a property under contract in Portland, Oregon. I'm curious if I'm allowed to post a Facebook marketplace listing for it? Is this something I am allowed to do being that I'm marketing my equitable interest? Let me know what you guys think.

Marketing involves any sales activity. Posting on Facebook is most certainly marketing, but even e-mailing a deal to someone in private is marketing. The difference is in one place you are doing it in the public, where it is easier to get caught. @Jay Hinrichs thoughts?
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Account Closed
Investor · San Antonio, TX · Member since 2020 · 11 posts · 3 votes
5y
Yes. I'll rather stick with specific groups on FB. Just be aware FB users are not as serious as folks on BP.
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Bryant Brislin
Title Representative · Irvine, CA · Member since 2017 · 874 posts · 519 votes
5y
I usually wouldn't use FB Marketplace until maybe week 3 of the disposition process, if I'm getting desperate. If your seller is local, and especially if it's a small town, they or someone they know may see that you are trying to sell for a higher price, and that could cause problems.
1 Reply
Joshua Haynes
Aurora, IL · Member since 2019 · 125 posts · 39 votes
5y
It doesn't sound like it should be a problem but I'm not sure. Interested to hear the respones.
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Jared Hettler
OP
Bloomsburg, PA · Member since 2020 · 44 posts · 11 votes
5y
@Bryant Brislin I see. I've contacted several real estate agents also asking if they have anyone who would be interested with no luck. Even though I secured this property 40k under asking, I've begun to wonder if it still isn't a good deal.
1 Reply
Brian Pulaski
Flipper/Rehabber · Montgomery, NY · Member since 2016 · 2k+ posts · 1k+ votes
5y
Is the property from the MLS? If so and you are trying to wholesale it, I'm almost sure if you put it on FB someone will see it who you wouldn't want seeing it. Does the realtor/seller know you are wholesaling it?
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y
Originally posted by @Joe Splitrock:
Originally posted by @Jared Hettler:
I currently have a property under contract in Portland, Oregon. I'm curious if I'm allowed to post a Facebook marketplace listing for it? Is this something I am allowed to do being that I'm marketing my equitable interest? Let me know what you guys think.

Marketing involves any sales activity. Posting on Facebook is most certainly marketing, but even e-mailing a deal to someone in private is marketing. The difference is in one place you are doing it in the public, where it is easier to get caught. @Jay Hinrichs though
Yup violation of real estate brokerage laws.. this state does not agree with the equitable interest theory taught by the gurus..

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Steve Morris
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
5y
"I currently have a property under contract in Portland, Oregon. I'm curious if I'm allowed to post a Facebook marketplace listing for it? Is this something I am allowed to do being that I'm marketing my equitable interest? "

Jared, I'm here to help. Send me your contact info and the property address.

I'll consult with the REA here on the legality of your deal - I love doing this.
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Erik W.
Real Estate Investor · Springfield, MO · Member since 2017 · 1k+ posts · 2k+ votes
5y
In my state, you advertise and flip the CONTRACT, not the house itself....same as if you held a note or an option contract. Could a lawyer try to argue otherwise? Probably. Will a Seller hire a lawyer?  Maybe, but lawyers are expensive, and unless there's a decent promise of a quick, easy payout the lawyer will want a retainer fee of a couple thousand in case there is no payout and/or the Seller gets cold feet and backs down. Most people in general are too cheap to pony up several thousand dollars unless they know they will win.
A better strategy in my view is if the Seller sees what you're doing and balks, be ready to walk from the deal. Not worth it to fight it. Have them sign a release for your earnest money and go find another deal.  Odds are even if it does go to court I don't think you won't get jail time, but there could be fines if a judge decides to find you guilty of practicing brokerage without a license.
Again, odds of it going to court are small unless you decided to dig your heels in and fight it. If there is major trouble, just let it go.  Many other fish in the sea.
This is the kind of stuff gurus never tell you to check on until AFTER you spend big money on their courses. Do your due diligence proactively, not reactively.
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Steve Morris
Real Estate Broker · Portland, OR · Member since 2019 · 4k+ posts · 2k+ votes
5y
In my state, you advertise and flip the CONTRACT, not the house itself....same as if you held a note or an option contract. Could a lawyer try to argue otherwise? Probably.
Better yet what does the MO REA say? You're arranging the sale of real estate in expectation of a fee without a license.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y
Originally posted by @Erik W.:
In my state, you advertise and flip the CONTRACT, not the house itself....same as if you held a note or an option contract. Could a lawyer try to argue otherwise? Probably. Will a Seller hire a lawyer?  Maybe, but lawyers are expensive, and unless there's a decent promise of a quick, easy payout the lawyer will want a retainer fee of a couple thousand in case there is no payout and/or the Seller gets cold feet and backs down. Most people in general are too cheap to pony up several thousand dollars unless they know they will win.
A better strategy in my view is if the Seller sees what you're doing and balks, be ready to walk from the deal. Not worth it to fight it. Have them sign a release for your earnest money and go find another deal.  Odds are even if it does go to court I don't think you won't get jail time, but there could be fines if a judge decides to find you guilty of practicing brokerage without a license.
Again, odds of it going to court are small unless you decided to dig your heels in and fight it. If there is major trouble, just let it go.  Many other fish in the sea.
This is the kind of stuff gurus never tell you to check on until AFTER you spend big money on their courses. Do your due diligence proactively, not reactively.
In Oregon this has nothing to do with lawyers.. a simple fill in the form complaint to the DRE is all you need to do . its free and they will decide if the transaction meets the regs.. the issue is when wholesalers say they are advertising hte contract they still have to describe the house and that is were the violation comes in.

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Erik W.
Real Estate Investor · Springfield, MO · Member since 2017 · 1k+ posts · 2k+ votes
5y
@Jay Hinrichs, no argument here.... I know this is how it's done in my area. We have 3 "big boy" wholesalers in town--including the "We Buy Ugly Houses / HomeVestor" franchise--who do wholesaling all the time. I think the owner of that has a real estate broker's license, but how he gets away with wholesaling while simultaneously representing the Seller is beyond me. All I know is, it happens all the time. I've bought two contracts (i.e. properties) from one of the other major wholesalers. Went thru without a hitch. The 4 different title companies I work with give investor volume discounts to them and it's bread and butter for them with all the closings (20+ per month). So like you say, maybe it doesn't take a lawyer to sue anyone....maybe all it takes is someone filing a complaint. For whatever reason, no one is filing any complaints.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y
Originally posted by @Erik W.:
@Jay Hinrichs, no argument here.... I know this is how it's done in my area. We have 3 "big boy" wholesalers in town--including the "We Buy Ugly Houses / HomeVestor" franchise--who do wholesaling all the time. I think the owner of that has a real estate broker's license, but how he gets away with wholesaling while simultaneously representing the Seller is beyond me. All I know is, it happens all the time. I've bought two contracts (i.e. properties) from one of the other major wholesalers. Went thru without a hitch. The 4 different title companies I work with give investor volume discounts to them and it's bread and butter for them with all the closings (20+ per month). So like you say, maybe it doesn't take a lawyer to sue anyone....maybe all it takes is someone filing a complaint. For whatever reason, no one is filing any complaints.
PLUS MO might not care maybe they have bigger fish to fry.. I know in my day job of funding purchases all over the US the larger wholesalers that bring inventory to my clients are all licensed..

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Jared Hettler
OP
Bloomsburg, PA · Member since 2020 · 44 posts · 11 votes
5y
@Jay Hinrichs yeah that's the smartest thing to do is just get licensed. I'm getting ready to begin the process of being licensed. My only question is, do you need to be a BROKER to avoid issues as a wholesaler, or just simply a licensed AGENT? I believe those are two totally different beasts, aren't they?
Thanks for any input and insight, Jay.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
5y
Originally posted by @Jared Hettler:
@Jay Hinrichs yeah that's the smartest thing to do is just get licensed. I'm getting ready to begin the process of being licensed. My only question is, do you need to be a BROKER to avoid issues as a wholesaler, or just simply a licensed AGENT? I believe those are two totally different beasts, aren't they?
Thanks for any input and insight, Jay.
when you become an agent you MUST work for a broker for the first 2 to 3 years depending on the state.. then you can sit for your brokers license.. now in Oregon we are all brokers there are no agents.. what you have then is you must as a new broker work for a PRINCIPLE BROKER.. then after your apprentice you can sit for your principle brokers exam.. ANd once you pass that you can work solo..

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Jared Hettler
OP
Bloomsburg, PA · Member since 2020 · 44 posts · 11 votes
5y
@Jay Hinrichs
I never knew that. So you need to get your license, and go work for a brokerage for 2 years before you are allowed to label yourself as an agent? So in order to avoid any legal issues with illegally acting as a broker you'd need to work under a broker for two years?
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Nate Sanow
Investor & Agent · Tulsa, OK · Member since 2016 · 1k+ posts · 1k+ votes
5y
@Jared Hettler
It’s interesting to me this turned into a debate.
In my opinion, the cure for the debate on should you wholesale or not is to not simply wholesale. Get funding to execute on the deal lined up, if it's that big of a problem... there are HML companies with "transactional funding" I suggest getting familiar with this.
Basically at that point you can move toward “wholetail” deals or even what I call day trading properties. You can’t “market” the deal, sure. But if you’re buying something at 9am, can you sell it at 10am that same day? Probably yes unless there’s a crazy law I don’t know about.
There is a lot of bad with wholesaling, but with national inventory shortages we don’t need to throw it away completely, that’s usually only real estate agents and brokers saying that. We do need better ethics & regulations yes. But learning how to source good deals is a skill and and art and can pay well. Don’t get discouraged.
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Chris S.
Investor · Golden, CO · Member since 2015 · 8 posts · 4 votes
5y
In many states, it comes down to what your purchase contract says you can and can't do. Does it specifically say that you're allowed to ASSIGN your contract to another party? Did the Seller agree to that? If not, you're clearly doing something wrong.
Finally, do you not have a network of Buyers to send it to?
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Jared Hettler
OP
Bloomsburg, PA · Member since 2020 · 44 posts · 11 votes
5y
@Nate Sanow
I appreciate the insight. When you say there is a lot of bad with it what are you referring to, the plethora of scammers that enter the business? My situation is that I don't have extensive employment history, which as far as I know (which isn't much about this,) is necessary for transactional funding/hard money lenders, correct? I'm not asking anything to be sarcastic or anything, I'm still really green and just trying to build knowledge. I come here because I know BP is filled with some pretty experienced and knowledgeable people and I'd like to learn as much as I can. I wanted to get into wholesaling because I have little capital, no steady employment history but a serious passion for real estate. Just trying to get into it any way I can.
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Jared Hettler
OP
Bloomsburg, PA · Member since 2020 · 44 posts · 11 votes
5y
@Chris S.
I thought that all contracts are assignable unless stated otherwise or bank owned? Also, if you sign a P&S agreement, as long as you perform on the contract, which means the seller sells their house, it isn't the seller's business what you do with the property at that point. At least that's what I was taught. In situations where at closing the agent/seller finds out you assigned the contract and gets mad, what is the purpose? The house was sold, the agent gets their commission and the seller gets their money. I never understood the issue there.
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Chris S.
Investor · Golden, CO · Member since 2015 · 8 posts · 4 votes
5y
Depends on the contract. Our standard state contract in Colorado, for example, states "" But many wholesalers choose to use their own versions of contracts- so you just need to read what the terms of your contract says.
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Bryant Brislin
Title Representative · Irvine, CA · Member since 2017 · 874 posts · 519 votes
5y
The other thing to keep in mind is this: yes, we usually have the right to assign to whoever we want, BUT the seller can hold things up. For example, if they see you are marketing on FB marketplace, Craigslist, etc and get angry with that, they can decide not to sign the Addendum for the buyer assignment. Or if you cancel, they can decide to just not sign the cancellation form nor the deposit release form. It can get ugly. Yes, technically, it could be argued that they are not performing and what-not, but do you really want to have to sue them into compliance? Do everything you can to market to your individual buyer list, as opposed to blasting it, if you don't have to.
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