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Jan 26

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Real Estate Investing – Agents Sell Real Estate, Wholesalers Sell Contracts… Know The Difference!

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wholesalingThere is much confusion about the position of the wholesaler. Many people feel that a Wholesaler is a person selling houses without a license. Others feel that Wholesaling is not legal or that Wholesalers advertising a property for sale is illegal. This is the misconception that I wish to clarify with this post.

Since the recent market drop there have been many new wholesalers jumping on the bandwagon to quick cash. This has allot of people questioning the position of the wholesaler and many Real Estate Agents putting their guard up.

Real Estate Agents have a license to sell real estate because legally you need a license to sell real estate. Wholesalers do not need a license because they are not selling real estate they are selling their contract rights to a certain real estate property. Because contract rights are considered property, they can be transferred to others just like a piece of property such as a home or car.

A Wholesaler finds a property, negotiates the price and then locks it up with an “Agreement to Purchase” contract. Since many Wholesalers are also Real Estate Investors they will either choose to go through with the purchase and take title to the property or they will sell their rights to the property to another Investor for a profit. This process is known as selling your equitable interest in a property.

Once you have a property under contract with a seller, all rights of the contract is considered “property” and therefore under your control. Therefore you reserve the right to do what you want with it. The Wholesaler who has a property listed for sale is not selling the property but their rights to the property that they have under contract with the owner of the property. Once you have the right to buy a property through a signed purchase agreement you have the right to sell your equitable interest in that property. So let me repeat the above sentence in case you missed it…. Wholesalers do not need a license because they are not selling real estate!

One other distinction between a Realtor and a Wholesaler is that the Realtor waits for the seller to come to them to list their properties and relies on the MLS ( Multiple Listing Service) to sell their properties to buyers. The Wholesaler continuously recruits buyers for their wholesale deals by building their buyers list. A wholesaler focuses on developing two things: finding deals and their network of investors to sell their deals to.

In essence it truly does not matter what your position is in the real estate world. With the real estate market at an all time low and foreclosures on the rise there has never been a better time to make money in real estate. Whether Wholesaler or Realtor you are sure to profit in today’s market if you are determined to do so.

 

Check Out These Real Estate Wholesaling Posts

How to Build a Massive Cash Buyers List
How to Get That First Wholesale Deal Done
20 Ways to Find Wholesale Properties

 

To Your Success,

Carol Stinson

About the author

Carol Stinson

Permanent link to this article: http://realwholesaling.com/real-estate-investing-agent-or-wholesaler/

4 comments

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  1. Harry

    Carol,again you have feed use new and season investors with some good information and i enjoy reading what you have for use next. Keep up the good work as always.

  2. Dan Maines

    Thank you Carol, for taking the time to explain this so clearly, and for making this resource available to all..Thanks..

  3. rick mays

    thx mrs,stinson for such a great website,the resources are tremendous.thx for your articles etc. as everytime i read them i can feel my confidence building that i can do this too. congrats on your new book. i’ll be wanting a copy. i never knew you were out here til i saw you on dg video and i kept trying to figure a way to contact you. funny because i ran this idea thru my mind so much ‘that if only i could find a way to talk to you,i could get your input and succeed too’ that i actually dreamed about trying to find you and in my fitful sleep in a dream it came to me…why not google your name!!! it was like a light bulb turned on!!!! i woke up and googled your name and sweet jesus , you are all over the web;)…i am learning so much from the things you do in your business and i so want to thank you in person someday for how much you are helping me to realize my dreams. i have a deal i am working on, i’ll let you know how it goes.the great thing about it is if i get stumped on what to do or something i just check your sites and dg’s and i usually find an answer. i love you all so much,thx for reigniting my dreams and the confidence to get it done. god bless you and yours. rick

    1. cstinson

      Thank you so much for your comment. It blesses my heart to know that I can help someone else in this journey. I wish you much success!

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