When you're a wholesaler and a licensed broker question

Question

Does anyone know if there are any additional disclosures or rules to follow in you're assigning a Purchase and Sale Agreement (as a broker) other than disclosing that you're a broker?  To keep it simple, let's assume there seller is not a distressed seller.

I've had quite a few brokers tell me that I couldn't assign a PSA now that I'm licensed and that everything has to go through my brokerage.  I don't think this is correct because I know brokers that are also wholesalers, by my response of "well I know people who do it" isn't a strong argument.

Does anyone know what RCW's or regulations I could use to double check my assumption and also help educate those that think this is wrong?

Thanks!

Jan Wanot · Answer

Account Closed I poked around on the web a bit and found the same thing as Alex. Most importantly, you'll want to separate your retail broker transactions from wholesale activity by acting with transparency and spelling out the potential to assign in contracts.

Here is another thread with some discussion and opinions on both ends: https://www.biggerpockets.com/forums/93/topics/77001-can-a-licensed-real-estate-agent-wholesale-property

I'm not a broker and don't know what set of regulations they abide by, but I'd also love to see someone quote the specific guide/rulebook providing us direct reference on any articles that would allow or prevent executing retail and wholesale transactions.

I can't imagine this would be defined by the Revised Code of Washington but I've been surprised before!

Shawn Ackerman · Answer

Account Closed I'd suggest opening a separate entity and go to town my friend.  Then your concerns about jeopardizing your firm becomes null.

Andrew Hill · Answer

I would be very very very careful with that. I see a lot of potential problems with that. Its why these large companies hire non licensed people to go door to door seeking deals.

Aaron Klein · Answer

Any agent has to disclose they're an agent, that they're not representing the seller, and they're acting on their own behalf with the intention of making a profit. There's no law I've ever seen saying you have to do the transactions through your broker - they just want to make money on your deals. Same as buying your own home, you wouldn't be required to run it through your broker unless you're representing yourself as a buyers agent and want to claim the buy side commission on a listing. You can buy and sell whatever you want for yourself, but your licensing requires you to disclose that you're licensed and not representing the other party, right?

Alex Capozzolo · Answer

I ran into a similar situation ... started off wholesaling and just recently became a real estate agent. I asked around quite a bit, and the answers I most closely landed on was that if you're licensed and you are trying to wholesale, you must complete the transactions under your broker and disclose to the seller that you will be wholesaling it for a profit. Not positive on this, and would also be interested in finding a definitive answer !

When you're a wholesaler and a licensed broker question

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