Do I Need A Realtors License To Wholesale Houses?
The answer to today's question is a very BIG NO! You do not need a realtors license
to wholesale houses! And here's why: Lets start with the realtor, a realtor has no real interest in the property that they are helping a client either buy or sell. A realtor is simply supply a service to a client by either helping that client Buy or Sell a piece of real estate.Now, the real estate wholesalers does have a real interest in the property that they are involved with. That interest is to BUY the real estate that he or she is interested in, The wholesaler actually put's the real estate under contract and is then controlling the interest in that contract to Purchase real estate. This contract on the property makes the wholesaler a true buyer of real estate.
The Realtor is paid a commission for they're role in the real estate transaction, usually a standard 6% for the listing agent if he sells the property and half that usually for a co-broker sell it off of the multi-list (the multi list is where property is listed for sale so that
ALL realtors who belong to the multi list can help sell the listing agents properties and get paid usually half of the listing agents commission which in this case would be 3% or $3,000.00 in this example) if they make the sale. This commission is negotiable and is paid by the seller of the real estate not the buyer. So on a deal where the house sells for $ 100,000.00 the Listing agent if he sells the property would receive his 6% commission of $ 6,000.00 at closing for his services. If a competing agent sells the property he would receive a 3% commission of $3,000.00 and the listing agent would also make 3% commission or $ 3,000.00 as well.
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Not bad, but nowhere near as lucrative as what a real estate wholesaler would make on a similar priced home. If a wholesaler was closing on a 100,000.00 dollar deal he would be dealing with a property worth at least 170K to 200K depending a lot on how much work may be needed to repair the property, because a wholesaler is buying at 40 to 60% of the properties Fair Market value.
There is no real science on how much a wholesaler will make on a real estate deal, no set commission percentages. The wholesaler can make whatever he believes he can "get" out of the deal. So speaking purely from experience on similar priced wholesale deals that I have closed on over the years, I would expect to make between $ 10,000.00 and 15,000.00 as a wholesaler on this deal.
So you can see from this example, the wholesaler makes a significantly larger pay check from the same piece of real estate that's being sold!
Again, the real estate wholesaler can sell 100 properties a year and not need a realtors license because he has a real "contracted interest" in the property between himself and the seller of the real estate, and the Realtor has absolutely NO CONTRACTED INTERST AT ALL IN THE PROPERTY WHATSOEVER. Realtors are just being paid for the services that they provide to the Sellers and Buyers of real estate in the form of a commission which is why they need a license.
Wholesaling is a perfectly legal way to buy and sell multiple pieces of real estate with No licenses needed ever!
20 More Free FAQ Wholesaling videos! www.WholesaleSmarts.com
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by: Eddie Case