LandInvestors.com Forums **Ask A Question** Listing properties you don’t own

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  • #25360
    Moli Langi
    Participant
    Post count: 11

    A friend of mine who is a very successful land flipper from a different education group told me that he lists his properties without buying them or notifying the seller to see who would buy them. Then he would double close on the property.

    My first question is, is this even legal? And 2nd, is this a recommended way to market the properties?

    I have a few accepted offers on some 5 acre lots but I’m having trouble figuring out what I should do next.

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  • Lisa Demyanovich
    Participant
    Post count: 3
    ProAdvanced

    I have my sellers sign a 1 page agreement and 1 of the terms is that they allow me to market the property online and offline. That would include listing it. I then send that signed copy to the title company or attorney I’m using to do the closing and “open escrow”. If I’m having trouble getting it in front of enough buyers I will use a flat fee service and list the property. And when I have a buyer I send the second contract over and schedule both sides for a double close. It is legal where I am and in most states (check yours) because you have what is called “equitable interest” which makes you a principle in the deal. I do it this way most of the time unless the property is too good of a deal to wait and I’m beyond confident it will sell quick. Then I’ll just close and hold onto it for a minute until I find the right buyer. It’s a very good way to do this business with very little risk.

    Michael Aillon
    Participant
    Post count: 315
    Pro

    Selling real estate “for” someone is selling real estate without a license. So its important to understand what’s correct to be on the right side of the law. If you don’t, you’re eventually going to have a property where a realtor is going to call you and start probing about your ownership. You need to be ready to defend yourself and have the right paperwork in-place. Otherwise, you run a high chance of being labeled a scam and being reported to the State real estate commission. Then you’re in hot water.

    Sure you can get “Equitable interest” if you actually pay/contribute for a portion of the equity of the real property identified in the contract. (i.e.Y dollars of X sales price). So its important to understand what it means.

    Having a property “Under Contract” is not quite what it use to be. Different states are cracking down on so called “wholesalers” who waive the “I have it under contract” flag. So be sure to understand what your state requires.

    Now the good thing is that most realtors don’t care about land. So if you can make a deal happen where everyone gets paid, then most people won’t care. Just make a practice to have the right paperwork.

    I’ve referred to this video in the past to understand what’s legal and how to do it right. It talks about houses, but of course land is real estate too. Watch the video to understand what it means to have a property “under contract”

    The good thing about land are the low price points. So its easy to prove that you have the resources to close on the property.

    Best of luck

    Michael Aillon
    Participant
    Post count: 315
    Pro

    Here’s a MUCH shorter version of the important information from the previous video.

    Shawn Swisher
    Participant
    Post count: 64
    Pro

    In most states, it is not legal. Having your seller sign something giving you permission doesn’t make it legal either, because it’s not their permission to give. Real estate transactions are regulated by the state real estate commissions and they determine the law when it comes to selling property. However, real estate commission enforcement is driven by complaints and like Michael said, most realtors don’t care about land so they are unlikely to file a complaint. The short answer is it’s not legal in all but a very few states but you’ll probably get away with doing it. It just depends on the risk level you are personally willing to take on.

    "Buy land, they're not making it anymore." -Mark Twain
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