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Im looking to wholesale real estate in where I find people…

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I'm looking to wholesale real...
I'm looking to wholesale real estate in where I find people behind on their mortgage and plan on selling the the house to an investor for a profit. What kind of contacts would I need to be sure I can secure the house and get paid by the buyer.
Submitted: 8 years ago.Category: Legal
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Answered in 28 minutes by:
6/29/2010
Lawyer: LawTalk, Attorney replied 8 years ago
LawTalk
LawTalk, Attorney
Category: Legal
Satisfied Customers: 37,876
Experience: I am a practicing attorney with more than 3 decades of experience in the legal field.
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Good afternoon,

I'm sorry to hear of your dilemma.

To act as the middleman in the real estate market and be paid for pairing the buyer and the seller, both Texas law and Federal RESPA law require that you be a licensed real estate broker. Unless you are a broker it will be a federal crime for you to engage in bringing buyers and sellers together like that for a fee.



I wish you the best in 2010.

I understand that you may be disappointed by the Answer you received, as it was not entirely favorable to your situation. Had I been able to provide an Answer which might have given you a successful legal outcome, it would have been my pleasure to do so. I do work diligently to provide you with the correct Answer under the law, and because I have no control over what the law is, I ask you not to hold that against me. It has been my pleasure to assist you, and it would be greatly appreciated if you would click the green Accept icon so that I can receive credit for having answered your Question. Thank you in advance.

Best regards,

Doug

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Lawyer: LawTalk, Attorney replied 8 years ago
Good afternoon,

Federal law, the RESPA regulations, which are federal regulations cover the sale of single family homes which have a federally related loan, hold: "No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mortgage loan shall be referred to any person." In other words, RESPA prohibits either giving or receiving any thing of value pursuant to any agreement or understanding that it is in exchange for referral of business relating to a real estate settlement. The law does not prohibit the payment of fees to licensed brokers, but specifically forbids the payment to an unlicensed finder. Under a strict interpretation of the law, if the sale was anything other than an outright cash transaction where no mortgage or federally insured bank loan was part of the financing of the home, it appears that a payment of a finders fee to the neighbor, while not necessarily violating WV law, would violate federal law. Here is an article on the interaction of RESPA and kickbacks in real estate. Make particular note of the jail and fine possibilities for violations of the law:

Here is a link which leads to a good discussion of the RESPA laws and the types of fees which are prohibited under federal law: http://activerain.com/blogsview/1636696/commission-splits-kickbacks-and-referral-fees-by-real-estate-attorney-peter-n-brewer

Please, remember that I only receive credit for helping you when you Accept my answers. Until then your payment is simply held on deposit. Thanks again.

Doug



Edited by LawTalk on 6/29/2010 at 8:19 PM EST
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Customer reply replied 8 years ago
In a nut shell you're saying I need a real estate license to find people whom are forclosing on a home then finding a buyer for there house and making a profit in doing so?
Lawyer: LawTalk, Attorney replied 8 years ago
Good afternoon,

You need a Brokers license to do what you are proposing. It is the advanced license that you can generally only qualify for after you have has a real estate sales license for a number of years.

Without the license you would be violating the law if you go ahead with your planned business.

Please don’t forget that I only receive credit for having helped you when you click on the Accept Button located at my Answer.

Best regards,

Doug

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Customer reply replied 8 years ago
If you could kindly please clarify http://www.biggerpockets.com/renewsblog/2006/11/25/wholesaling-real-estate-basics/

More so the first paragraph

Thanks
Lawyer: LawTalk, Attorney replied 8 years ago
Good afternoon,

I am sorry but I am not your personal attorney, and I am not allowed to review documents for you under the Terms of Service of JustAnswer--because to do so would to be the practice of law. I certainly will not waste my time trying to explain why a blog may be legally faulty. A blog is not to be relied on for legal advise---sorry.

I have fully answered your question initially asked. While I suspect that you may have more questions as regards XXXXX XXXXX as time goes on, under the rules of JustAnswer, users are supposed to ask only one question per question thread. While your many follow up questions do relate to the facts you have initially stated, they are in fact new and different questions and should be placed into a new question thread.

Please remember that I only receive credit for helping you when you Accept my answers. Until then your payment is simply held on deposit. Thanks again.
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