A few comments, thoughts to ponder:
Not taking away from your right to deal on your own behalf, personally investing, but what is you public duty as a licensee? You are a licensee 24/7/365, never a day off as a professional, as long as that license is active or you hold it.
Your first and foremost duty is to protect the public interest, that includes protecting other above your own self interests. Your next duty is to protect your principal as an agent. You do that by protecting the Broker's client, as an agent, buyers or sellers aren't "your" client, they are your broker's client!
If you are flipping contracts, not taking title to the property, you are not investing by definition, you are operating, facilitating an exchange of title.
There is no difference in the end result of you facilitating a transaction for an owner as a wholesaler or as a Realtor, the only difference is in the paperwork you use. On this side of the horse, it's white, on the other side it's black, it's still the same horse.
Then the question, why use a wholesaling tactic when you can use a listing? Well, obviously, you think you can make more flipping the contract, than listing it. Whose interests are you putting ahead of your broker's client, their prospective client? What is in that owner's best interest?
How is your service in facilitating a transaction of more value to the owner by wholesaling their property than listing it? If the owner is willing to accept a lower price, isn't the wholesale fee part of the equity held by that owner? Your commission comes from the owner as well, what makes you, the facilitator worth more to the owner by riding that horse on the side that costs them more? Do you really think that the difference in contracts or disclosures or your other marketing makes any valuable difference to a prudent owner?
If you look at the Fair Trades and Services Act, you will find that, basically, any service provided must be at a price that is usual and customary given the degree of competent services and relevant factors. What is it that you do by wholesaling that is significantly different from acting as an agent? Nothing! From a legal and ethical point of view, costs for your services need to be in line with alternative services available.
Another issue for an agent is the "net listing" adventure you might go on, often regulators look at the end result, what happened, then back track through a transaction. Instead of using a listing agreement, you use a sale contract and assign it to effectively do the same thing as a net listing.
Now, all of this is to flipping a contract. You avoid many of these issues when you take title, then you are the owner and you can pass title to a buyer, but that still has other implications if you have a big difference in the price you paid and sold at. Your broker probably won't mind if you take title, dust the place off and sell it.
As to disclosures in real estate dealings, seems most are thinking if they disclose it, they can avoid it. Totally wrong and mickey mouse disclosures can cause more harm than good. Think of it this way, if I tell someone I'm going to break their arm and they say sure, then I break their arm, I'm still assaulting that person, I still get arrested! No judge has to take your disclosure as a defense to you doing the wrong thing. My disclosing the fact that my intent was to break someone's arm is clearly established, I can't claim self defense now!
Showing that you told an owner the property was worth $100,000 and then getting them to sell to you for $70,000, is pretty dumb really, the question then is.....what did you do to motivate a prudent owner to do such a thing? In fact, I would have to question the owner acting prudently and would question competence! It would then be up to that owner to defend what they did, not you......or, were you dealing with an idiot? What convinced that owner to sell for less, some fast talking market ploy that misled the owner? Who knows.
I suggest instead of trying to use glazing disclosures that you document the facts surrounding the transaction, show justifications as to significant price differences, that is CYA. Otherwise, a judge may see you as another guy who has a briefcase open, holding a pen toward the owner and wearing a mask.
Listening to gurus or marketing guys who think they know legal aspects will probably get you into trouble. Prisons are full of smart people. It is more important to follow the intent of the law than it is the letter of it in most cases. Investors and especially licensees that attempt to devise methods of circumventing the law and accepted practice are simply dangerous.
Thoughts to ponder :)
