In 2010, the Washington State Department of Licensing (“DOL”) issued a ‘guidance’ stating there are situations where an individual or business who engages in ‘wholesaling’ of a real estate purchase contract may be required to be licensed as a real estate broker under Chapters 18.85, 18.86.030, and 18.235 RCW.
As this is merely a ‘guidance’, and not a formal rule, there is room for potential enforcement action against a wholesaler. For example, it is possible that the transaction is exempt because a licensed real estate broker is not a party to the underlying transaction.
Situations where the DOL might have a case is someone who: (1) is in the business of tying up multiple properties; (2) never intending to close but merely marketing her/his buyer’s interest; (3) get an assignment fee; (4) if the wholesaler couldn’t find a buyer for buyer’s interest; (5) had the right to terminate the deal at no cost to the wholesaler. In other words, the transaction is illusory from the seller’s position.
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