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I had a Realtor tell me today that I was breaking the law because I was not licensed to sell other people’s real estate.
I told him that I was not selling real estate but flipping contracts by utilizing assignments.
Can anyone provide me with a good explanation (for example a legal explanation) that I could use the next time I am confronted with a disgruntled Realtor?
FYI: I live in Florida.
Hi Eric,
First thing you can do is avoid working with listed properties and that will minimize any conflicts with Realtors. Their business is really hurting this year and it will continue to be rough for them for several years. Anything that even closely resembles taking money away from them they will raise a stick about it. The last thing you want is to have to defend yourself with the real estate commission. I would avoid using the term “flipping a contract” as many realtors don’t understand what it means and automatically think it is illegal ( BTW – it is NOT)
But, the reality is that you are not “selling someone’s house for them”! You have a contract to purchase the property with a contingency clause that basically states that you will only do the deal if you find a buyer first. The contract gives you an equitable interest in the property and the right to market it per the terms of the contract.
So, when you are assiging a contract, and a realtor confronts you, you could say, “I’m selling my contract which has the right to purchase this property.” or see the statement below it wil work too.
If you’re doing a simultaneous close, and a realtor confronts you, you could say, ” The terms of the contract clearly state that I will only purchase this property when and if I find a buyer before I close. I am marketing for a buyer under the terms of the contract.
A FREE copy of my E-Book, Real Estate Profits on Steroids” is in the MEMBER ZONE – it will give you even more ideas.
Don’t let realtors get in your way. But to create less friction, don’t go after listed properties in the first place.
Jackie
hello eric, jackies ideas are great, yes they dont like the F word (flipping) it is much easier to do with unlisted properties, listed properties that have expired or fsbos that have been on the market for 6 months or more the sellers seem to be very easy to work with and really dont care who buys the property just as long as they can get there money and move on.
if buying listed properties i like to use a buyers broker who is familiar with investing explain that you want to make them a lot of money and do repeat business with them you will buy all the house you can sell. I will close myself though if i cant find a buyer in time this creates good credibility.
when you sign a contract you dont yet have legal title but you do have an equitable interest thats why they make you sign a release form if you cancel. the contract allows you to do what you want with it sell it, assign it, close it, as long as the contract doesnt say not assignable you are free to do as you wish. or you can put and or assigns after your name i say im not sure which entity im going to close in because im not sure if i want to keep it, sell it or rent it if they ask. but sometimes and or assigns raises attention leave it off if you can.
options work great for doing flips i mean (wholesaling, quick turning, assigning, selling etc).
good luck happy investing
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