When you are just entering the real estate investing world, you might wonder whether a license is required to wholesale property. This investment strategy appears to describe the job of a real estate broker for those who are still learning the wholesaling process. It is after all just a matter of bringing two parties together. Several people are looking to sell their properties and others are looking to buy. Wholesalers are responsible for more than just finding property buyers and sellers.
Real estate brokers facilitate the sale of properties and represent buyers, sellers, or both parties. Wholesalers, however, either acquire ownership rights or receive contractual rights to purchase properties. Investors do not need wholesale real estate licenses because of this distinction between wholesalers and brokers. Find out why you need a license to wholesale real estate.
Are Wholesalers Required to Hold Real Estate Licenses?
It is not necessary to hold a wholesale real estate license, however, you might also wonder if you need a real estate salesperson license as a wholesaler. Holding a license certainly has its advantages and disadvantages. Generally, it’s a personal decision based on your personal goals. There is one case in which you may need licensing to work as a real estate wholesaler, and that is if you live in Illinois.
You should consult an attorney in your area before discussing specific state laws regarding real estate wholesaling. State laws determine wholesaler licensing requirements; there are no federal rules. Consequently, the laws change frequently. As a result, it is always a good idea to have the assistance of an investor-friendly real estate lawyer. Getting your real estate license may be a good idea in the following situations.
Why Hold a Real Estate License?
The following are the reasons to hold a real estate license:
It’s a state requirement:
A law enacted in Illinois in 2019 requires all wholesalers to have a license if they conduct more than one deal per year. There is no licensing requirement in any other state, but this might be the beginning of new regulations. The license ensures that no matter what changes your state laws make, your practice still meets the requirements for your area.
When you’re willing to spend more
Getting started in real estate wholesale requires no investment of time or money. Then you might want to consider getting licensed if you are willing to spend money on courses, exams, and brokerage fees.
When you want the benefits of licensing:
A real estate professional networking event, property databases, and attorney-approved contracts await agents and brokers. You need a system of support to work efficiently if this matters to you. Licenses make it easier to connect with other real estate professionals and learn about selling.
When you’re fine disclosing your real estate occupation
It is your responsibility to follow certain rules when you are an agent. You can disclose your license whenever you purchase or sell a property, for instance. While wholesale deals are unlikely to fall through because you’re a licensed agent, it’s not impossible. It is simply more convenient for some people to work with non-licensed individuals.
