Im a young aspiring investor wanting to began a wholesaling career and will soon be a licensed real estate agent in Texas. I was wondering if there are any laws or regulations for wholesaling as an agent? And any tips for dealing with disclosures?
@Zachary Canada I'm an agent in California; I wholesale in CA and TX, but mostly in TX. In California, I always add some type of verbiage to the contract that states I am a licensed agent, but am acting as a principal for profit. That's basically what a lot of the gurus have recommended. Of course, you could always talk to a real estate attorney, too.
@Zachary Canada Step one is to ask your broker. He or she will likely refuse as wholesaling is indistinguishable from a net listing. See: https://www.trec.texas.gov/use... It appears that you would have to get your seller to "require a net listing". I don't know how you could do that honestly. You would have to explain how something that is obviously not in their interest is in their interest.
You would also have to explain to your broker (or the real estate commission) how selling for less than the seller could get from a standard MLS listing is ethical - especially if you're taking a bigger fee than a commission would bring. That's really messy.
The underlying issue is that wholesaling takes advantage of sellers who are either ignorant of the true market value of their property or are in such a bad jam that they'll take a garbage lowball offer to get out of whatever the situation is.
There is literally NOTHING that a wholesaler can do for a seller that a licensed agent can't. No matter how bad the condition of the property (a standard wholesaler excuse), an MLS listing will find cash buyers just as fast as a wholesaler, and will probably find more because he will expose the property to millions of people instead of the handful of "buyers" on a wholesaler's list.
Go ahead and get your license. Work hard, serve every one of your clients like they were your mom or dad. You'll build a great reputation that will get you repeat business and lots of referrals. It will take some time, but if you stick with it, it will pay off - and you'll be able to sleep at night.