I really need to know if a Licensed Real Estate Agent can legally wholesale Real Estate…?
I’m going to become a Real Estate Agent very soon, in order to learn more about the RE industry, but I’ve heard in the past Realtors and Real Estate Agents can’t wholesale real estate or do Lease Options, because they could lose their license or end up in jail…
Is that true ??
You will take classes that will tell you the rules in your state before you take the test. I believe the wholesaling in every state is legal for the agent but questionable for a non licensed agent.
The only thing is that if you wholesale a defective property and you have a license you can’t say you didn’t know because by virtue of the fact that you have a license you are a real estate professional and should have known you passed on a defective product. That is why I don’t have a license. I can prove I am ignorant.
What do you mean by defective property?
If you act ethically, then you’ll be fine. If you fail to disclose a material latent defect in the property (meaning a defect that cannot be readily observed by the average person when walking the entire property) that you’re aware of, then you’ll have problems, AS WELL YOU SHOULD. If you are not aware of an issue, then you can’t be held liable, even if you’re an agent. Hell, agents aren’t omniscient.
You need to disclose that you are a RE agent, but you are not acting as an agent on behalf of any other parties in the transactions. You are only acting on behalf of yourself, and if this is a double closing you need to indicate on the agency disclosure form that the seller is “unrepresented”, and the seller needs to sign it. Same thing with your buyer.
See I didn’t know that. I would have sued you because you should have known and warned me.
Thats why its best to always check your local laws and most of all with the company you work for if you are an agent under a broker. :biggrin