I would like to start doing lease options/tennant buyer placement and or subject to sales but I can’t quite figure out how to do it without violating license law. I have thought of just giving up my license, or knuckle down and get through my brokers–any suggestions??
Can you explain what license laws you think you would be violating?
If you work for Coldwell Banker it won’t make any difference. They have prohibited their brokers and agents from writing up lease options due to the anti-lease option legislation popping up in various states such as Colorado and Maryland after Texas has already banned them.
i heard about that but don’t know too much about it…could you elaborate a bit?
Lease options aren’t banned here in Texas. Well, not completely. As of now, you can still have a lease option for up to 6 months. It used to be up to 3 years. Once the 6 months is up, you cannot renew it to the same person. Seller financing options have also been scaled back. Depending on your lender, you could invoke the Due on Sale clause. If you own the property outright, there is no issue with doing seller financing.
In the next legislative session, they will be reviewing the new Lease Option bill which should allow for more lenient restrictions on them.
As to law violations, I would like to tie up a few deals via contracts and flip them to a well funded investor that I know for some much needed quick cash, can’t do that. Also, any deposits I might take from potential tennant buyers would be against the rules (all funds must go through my broker) and last but not least I work for Coldwell Banker and as one of you already pointed out they don’t allow even the purchase of more than one home every two years for your personal use with conventional financing let alone lease purchases. So, I am asking the collective brain trust out here, what is an indexperienced but determined real estate investor wanna’-be to do? Any input is most gratefully appreciated.
Why don’t you buy and hold as rentals for yourself?
wow, I didn’t know anything about all that. I would say contact the state board law division and ask them about legal ramifications. I’m not sure what state you are in, but California Association of REALTORS has a legal hotline for us to use for free, and they are GREAT!
I am studying to get my RE license now but only for self-serving reasons. I want to have my own MLS access and also want to keep the seller’s commission in my pocket when we sell properties later on. My spouse and I are planning to start doing lease options/tenant placement as well. If all contracts are handled by him, would I be violating license law? I never thought that doing lease options could or would be banned or limited by law, other than regular contract law. Now I’m wondering if we need to change our plans. I don’t see why a brokerage would care if an agent is doing this. What am I missing??
Thanks! I’m in NV if anyone has state specific info.
well, you are not violating any license law because you are not licensed. Dealing with an agent IS dealing with the brokerage, the agent is a representative of the brokerage. EVERYTHING that agent does in that transaction, the brokerage is resposible for. An agent is merely a leveraged person. Agents are for the most part considered independant contractors simply for tax reasons. However, all actions in a transaction is 100% the brokers resposiblity. Like laws differ from state to state, I happened to be licensed in NV and lease options are legal there. Are you in Las Vegas?
It is not against license law to invest. If Coldwell Banker does not allow you to do what you need to, then get another broker… it is not really difficult. As far as collecting the payments…etc, why should the broker get the funds? you are the principle in the transactions, so you get it not him.
Find an investor friendly broker and talk to him. I am licensed, and I never ran into any issues. I sold one of my properties on MLS and gave my broker a $250 check for it.
What do most Realtors know about real Real Estate? NOTHING! They are in Sales, not the Real Estate Business. Investors are in Real Estate. Do you think they teach Realtors about Real Estate in Real Estate School? No, they teach them how to list and sell houses. Most Realtors don’t have a creative mind or a mind of their own. You can’t tell them that, of course. Do you know how many Real Estate Investor Wannabes have become disenchanted with the Real Estate Business because they thought they would learn about Real Estate by becoming an Agent? You learn about investing from successful investors.
i think obtaining a real estate license is useful; a person can learn about the specifics of a RE sales transaction, network with other ppl in RE related fields, receive commissions (or discounted purchase prices), and a few other perks…
it’s a matter of the individual opening his/her mind to creative and unconventional ways that weren’t taught in licensing school…which i think would be somewhat easier since he/she knows what the “right” way is…
Ouch!! Somebody is bitter at Real Estate Agents…Let me clarify somethings here. Real Estate school does not teach you how to sale houses AT ALL. Real Estate school teaches you the language, terminology, ethics, and principal of Real Estate transactions. Trustpro is correct in saying agents are not trained in investment strategies, however it does not mean agents a dumb. If you need glasses do you go to a regular doctor or an optometrist? Same thing, some real estate agents have different specialties. Did you know REALTORS can get designations (certifications) on certain aspects of real estate? Visit http://www.realtor.org/runivers.nsf/pages/designation?OpenDocument It’s all about further education. Don’t be bitter at all agents because you didn’t know how to hire the right agent. Trustpro, without the Retail level of Real Estate, investing would be pointless. I did get into real estate because I do want to learn about investing, but working in the computer field did not expose me to the deals I have been able to find while working as an agent.
as someone who is not an agent, the restriction placed by Coldwell Banker and others looks pretty much like an attempt to minimize conflict of interest (or the appearance thereof). I’m sure there have been few agents in the past who were spending a little too much time on their own deals and not enough time on their clients deals. At best that means a unhappy client who does not come back to the brokeage/brand and worst case lawsuits and similar fun stuff. It is probably a case of poor judgement of a few individuals in the past has necessiated the institution of a blanket policy