Did Illinois make wholesaling properties illegal?
Earlier this month, the Governor of Illinois signed a new law than many folks said made wholesaling homes illegal in that state.
That’s not exactly what happened.
The change in the law now requires anyone selling an “interest” in a property to be a licensed real estate agent. And that is how wholesalers got around the law in the past.
Instead of selling you the “actual” home, they were selling you a contract to buy a home. In legal terms, they assigned their interest in a purchase contract to you. Since it’s only a piece of paper being sold, most states do not require a real estate license.
That’s now changed in Illinois, and I hope Tennessee also considers it in order to protect consumers.
To help you grasp the importance of it, I want to make sure you understand one of the key differences between a wholesaler, a real estate agent and a Realtor.
A wholesaler is not required to be licensed in TN and has no other duty but to themselves.
An agent is required to be licensed and has a legal duty to act in honesty and good faith.
The Realtor is required to be licensed, act in honesty and good faith, plus pledges to protect and promote the client's interest first. In addition, they promise not to mislead you about the fair market value of your home.
The wholesale model has been around for a long time. It started with investors looking for homes to flip, then picked up by companies that buy ugly homes, and most recently with instant offers from companies like Opendoor and Zillow.
This isn’t the best way for every homeowner because you can easily pay tens of thousands of dollars for the convenience and not understand the total cost.
You’ll only know the true cost by knowing who you are dealing with and learning the fair market value.
If you want help sorting this out with someone who puts your interests first, then give me a call at 615.519.0983.
I’ll be glad to share the fair market value of your home, get several instant offers for you, and then help you see what is the best path for you. I look forward to talking with you.