Andrew Ikeda 0 Report post Posted July 30, 2009 Hey Everyone, Spoke to a realtor this morning who had responded to one of my emails on selling on a lease option. She is the owner/seller. After a short discussion on the property, she asked about me so I told her what I was doing and she told me that what I was doing was illegal, i.e., collecting a fee or commission without a license. She told me to look up WA state law which I did and I cannot find anything that makes me illegal. All the information I gathered is for the licensing and practices of real estate brokers and licensee - of which I am neither. Before I came onto naked investor and read the post by JerseyJeff in 2005, I was thinking about this. If what I was doing was illegal, then why are all the investor clubs still operating? There are other investors out there too doing the same thing I'm doing. What about sellers and especially FSBO's? How can they sell then without the services of a realtor? Well, it's personal property that they have an interest in. Ok, but then why would I as an investor, need a license to help sell something I don't have a financial interest in (ownership or holder of the deed/note?) I don't have anything to lose or vested. At this time, I'm just doing pure options. I've got two deals going (with signed consulting contracts) with sellers who have inactivated their realtor licenses and neither of them have said anything negative and they seem all too happy to work with me. The response to JerseyJeff's post by Daniel Ng JD/LL.B still seem to be vaild. I'll keep doing my due diligence in this matter but to the best of my understanding, I don't think the laws have changed to reflect that charging a fee for our type of services is illegal. All the best, Andrew Share this post Link to post Share on other sites
Guest Diver Report post Posted July 30, 2009 As usual, another Realtor thinking they know it all and not liking the competition. If you're doing a CA and I'll assume you are, you're not selling a house but rather your contract. Diver Share this post Link to post Share on other sites
Andrew Ikeda 0 Report post Posted July 30, 2009 Good point Diver, thanks! I just discovered this: RCW 18.85.411Violations — Penalty. (Effective July 1, 2010.) Any person acting as a real estate broker, managing broker, or real estate firm, without a license, or violating any of the provisions of this chapter, is guilty of a gross misdemeanor. Yes, it doesn't take effect until next year ... but, is there any legal recourse, even now, if I'm missing something? The only thing that comes to mind is we are investors and not brokers. But could being an investor with lease options, CAs, and pure option type transactions be construed as being a broker since we are all involved in selling real estate? But as diver wrote, we are not selling properties but rather contracts. Just would like to hear and learn more angles on this. Andrew Share this post Link to post Share on other sites
jhanson8 0 Report post Posted July 31, 2009 RCW 18.85.411Violations — Penalty. (Effective July 1, 2010.) Any person acting as a real estate broker, managing broker, or real estate firm, without a license, or violating any of the provisions of this chapter, is guilty of a gross misdemeanor. Simply put, we are not "acting as a broker" and are not affected by this law. The only two (obvious) ways that an investor could get in trouble from this are if the person 1) marketed themselves as having a license when they did not, or 2) actually operated as a broker by connecting buyers and sellers and collected a broker fee. As Diver said, we are not selling real estate, but rather our interest in the property. That is why having the seller under contract is so important before you begin advertising. Share this post Link to post Share on other sites
vballdarin 1 Report post Posted July 31, 2009 I hear ya my brotha.... I just recently got into a little battle on the Trulia.com forum with a Broker from California. He said that what we were doing required a license, was shady, and that "why would anyone want to do a Lease Option"...etc, etc. After he copied and pasted the California rules and regulations about what "he" thought I was doing, I referred my "somewhat unfounded" concerns to two other friends here on the Naked Forum. Simply stated here is what they said: "Here's what I say: "I own the Option. It's mine. I signed the Lease. It's mine. I can -- with the seller's permission -- assign those documents for any fee the assignee and I agree on"." When I'm talking to tenant/buyers, I tell them that I may be able to find&acquire a house for them to look at. That, to me, should cover all bases as it gives it away that i'm the principle in the deal. I'm finally starting to like NOT having my RE license while feeling very confident in defending my position to currently licensed agents. Knowledge is POWER! Share this post Link to post Share on other sites
MichaelC 160 Report post Posted July 31, 2009 Good responses all. In a nutshell, you are a principal in the deal. Offer to meet the next Realtor who threatens you in an alley and settle it the New Yawk way! Share this post Link to post Share on other sites