Do you need a real estate license to wholesale?
In most states you do not need a license to sell your own contract rights, but some states now require one or limit how often you can wholesale without it. A licensed agent or attorney in the property’s state can tell you what applies to you.
The line most states draw is between acting for someone else, which is brokerage and needs a license, and acting as a principal who has bought a contract. Wholesalers stay on the principal side by contracting for their own account and being open about it.
Rules are changing, and each state is different. Check before you work in a new state, and keep your contracts and marketing consistent with what you are allowed to do.
Common mistakes
- Relying on an online post instead of the state’s current law.
- Negotiating for a seller or buyer as if you were their agent.
- Forgetting that rules can count deals done through related companies.
More questions
Does getting a license make wholesaling easier?
It can remove some licensing questions, but licensees have extra duties, such as disclosing that they are licensed when acting for themselves. Some states also require licensees to use approved forms.
How many deals can I do without a license?
It depends on the state. Illinois, for example, treats a pattern of two or more covered transactions within 12 months as brokerage, while other states look at the activity rather than a count.
Does an LLC avoid licensing rules?
Generally not. Licensing rules look at the activity, and some states count deals by related companies together.