Is it legal? - Posted by Michelle L. Matthews


#1

Posted by Michelle L. Matthews on December 06, 1998 at 14:03:15:

Thanks, that’s simple enough!


#2

Is it legal? - Posted by Michelle L. Matthews

Posted by Michelle L. Matthews on December 05, 1998 at 09:59:46:

I am new to real estate investing and I have recently moved to Georgia. Before I relocated I spoke to some people who were doing very well in investing, located just outside of Atlanta.

I worked a little with agents when I was in Alabama, but before I could get anything going I had to move due to my job.

Since I’ve been here I have been told by a few agents, that to contract a property and then asign it is illegal and acting as an agent without a license. One agent even advised me to read some Georgia statues in which I did, but I still don’t see where he’s coming from with this illegal business. He also told me that in Georgia you could only own so much property, which is again ???. He saids he’s been in the business for thirty years.

Another agent who happens to also have a school told me the same thing and is now sending me some information on his school, so that I can prepare for the license exam. I never really wanted a license because with that comes to many rules and regulations, not to mention that I would have to be under the control of a Broker for 3 years.

I’ve taking the course before in North Carolina, but I did not take the license exam, I basically took the course just for some basic knowledge about real estate.

Anyway, I would like to hear from some investors in the Georgia area, who can give me some guidance on investing in our area.

Thanks


#3

Re: Is it legal? (@#$% ??) - Posted by Bill Gatten

Posted by Bill Gatten on December 07, 1998 at 23:52:14:

I agree with Mark (whatever !@#$% means, I second it! Dogonne it!).

This broker your refer to is apparently very covetous of anyone who would dare to deal in Real Estate and be more successful at it that he.

My betcha is that he’s one of those who, for thirty years, has sold millions of dollars worth Real Estate, and never bothered to acquire any (except possibly his own home an a rental unit or two) for himself.

The key to true success in Real Estate is “owning” it, not selling it: selling some of it is just a vehicle to facilitate owning more of it.

On the subject of how many properties one can own… he’s full of baloney (Oh, so that’s what !@#$%^ means–I see). He’s undoubtedly referring to Dealer requirements, which say that you can’t acquire and resell more than a certain number of properties in a year. Most people don’t worry about that, as you’d have to be moving pretty fast and furious to be noticed: and if you were to get snagged for it, you need basically only say “oops, I’m sorry,” and start fresh next year.

On the subject of the license… it nice to have it (and I strongly recommend getting it) even though its not hung with anyone: so when you’re asked if you’re licensed you can say “Yes,” and when you don’t want the fact known, you can say, “No… I’m definitely not a Realtor®” - Realtor® being a term reserved only for members of the National Association of Realtors (which you can’t be if your license isn’t hung with a Broker).

Good sailing,

Bill


#4

Re: Is it legal? - Posted by rudy-austin

Posted by rudy-austin on December 06, 1998 at 15:56:38:

There is a very large Ga-real estate investors assn in Atlanta (700+ group) in atlanta. Join and get all your information there also…rudy


#5

My States REALTOR Contract - Posted by Mark(Stl)

Posted by Mark(Stl) on December 05, 1998 at 23:11:03:

I am A broker in St. Louis and I can tell you what is actually written on the back of our “standard” contract.It reads as follows.

“Paragraph 15: Assignability of Contract.
This contract is assignable by buyer, but not without the written consent of Seller if (a) Seller is taking back a note and deed of trust as part of the purchase price, or (b) Buyer is assuming the existing note. Assignment does not relieve the parties from their obligations under the contract.”

You can read this and come up with your own conclusion.
your state may have different laws on assignability, but it is my guess that they are all pretty close.

p.s. It would appear to me that your agent does’nt know his/her %@# from a hole in the ground,and if you are going to make money investing in R.E. what you don’t need is an ignorant agent.


#6

You might as well have asked your hairdresser - Posted by Irwin

Posted by Irwin on December 05, 1998 at 15:55:06:

to come over and repair your air conditioning. You’d think that experienced Realtors would know what they’re talking about when it comes to real estate related legal matters, but often they don’t. Ask ten Realtors if a contract for sale of property is enforceable without earnest money. Seven will probably tell you “no”. BUZZ-wrong

When you want to know what’s legal and what’s not, ask a lawyer.


#7

Re: Is it legal? - Posted by Rob FL

Posted by Rob FL on December 05, 1998 at 14:59:06:

Check the GA standard realtor contract. In FL there is an option on it as to whether the contract is (1) not assignable (2) assignable with liability to original buyer (3) assignable without liability to original buyer. See if GA’s has anything similar.

Secondly, ask that Realtor if they know how much RE Ted Turner owns in Georgia. Doesn’t he own half of the City of Atlanta or something?


#8

Thanks Re: Is it legal? - Posted by Michelle L. Matthews

Posted by Michelle L. Matthews on December 05, 1998 at 12:05:02:

I want to thank all of you for answering my e-mail. Your guidance is truly inspirational.


#9

Re: Is it legal? - Posted by JPiper

Posted by JPiper on December 05, 1998 at 11:24:39:

I would write these words down, and read them daily. ?Agents may be wrong, but they are never in doubt.?

First, the 30-year veteran. Clearly there is no rule limiting the amount of property that you can own ANYWHERE is the United States. From time to time there have been rules as to how many conforming loans a lending institution might give you. But nothing limits the amount of property you may own.

In your endeavors you will come across agents and others who believe, and have no question about, that assigning, simultaneous closings, and lease/options are ?illegal?. Read the licensing law for yourself. You can probably find the Georgia law through www.findlaw.com. Typically the licensing law in most states has words to the effect that a real estate broker is any person, who, for another, and for a fee, does or attempts to do ?sells, exchanges, purchases, rents, or leases real estate.? Key words here are ?for another? and ?for a fee?.

When you enter into a contract for yourself you are acting as a principal?.not ?for another?. If you then resell the property or assign the contract, you are still acting as a principal and well within your contractual rights. Where you could heighten your risk somewhat in some states is to find a buyer first, specifically look for a property that fits that buyer?s requirements, tie the property up, and then assign it. You?re still acting as a principal, but you?re getting perilously close to acting ?for another?.

Having said all this, read the Georgia law. Speak to a qualified real estate attorney in your area regarding the licensing law. I think you will find that there are MANY investors throughout Georgia who are doing exactly what you intend to do. The agents are wrong.

JPiper


#10

Re: Is it legal? - Posted by Johnman

Posted by Johnman on December 05, 1998 at 11:06:37:

Join the Georgia Real Estate Investment Association. I believe they are in the phone book and they have a website. Use yahoo to seach for this site.
They are the biggest investment group in the country (about 1400 members). Go to www.wealthnetwork.com and this will take you to most of the investment groups in the country.

Good luck!

Johnman


#11

First things First - Posted by PBoone

Posted by PBoone on December 05, 1998 at 10:43:15:

Michelle,
In the beginning of our REI listening to “Agents” was commonplace after all they are the “Experts”. Much to my suprise I found out the “Experts” only knew what was “Standard” and nothing else.
I would suggest to you, find an attorney in your area of investing that specializes in real estate to find out the laws of your area. Also find a REI group and make freinds, you will need someone to flip properties with ready cash.
Agents play a big part of our business, but we stay in control. you must do the same.
Pat


#12

Re: Is it legal? (@#$% ??) - Posted by Rob FL

Posted by Rob FL on December 08, 1998 at 21:22:34:

I have found that if you are a principal in the transaction that most states REQUIRE you disclose whether are not you are licensed. To skirt around the issue could be considered deceptive. I just disclose it in the fine print of the contract, but advertising must state owner/agent or owner/broker.


#13

Re: My States REALTOR Contract - Posted by Michelle L. Matthews

Posted by Michelle L. Matthews on December 06, 1998 at 08:14:29:

Mark:

What would you suggest as a standard amendment to the contract to relieve the buyer of the contract after assignment?


#14

Re: My States REALTOR Contract - Posted by Brad Crouch

Posted by Brad Crouch on December 06, 1998 at 02:07:35:

Mark,

I’m curious . . . this assignment paragraph you quote . . . is this a Real Estate Commission “regulation” or is it an actual “law”. Is there any difference between actual law and RE Commission regulations? Or do the “regulations” simply reflect the laws?

I’m wondering if this paragraph would be in effect even if the “standard” realtor’s were not used, perhaps using an investor’s “standard” contract, which did not contain the language you quoted?

Finally, I’m wondering about whether or not as a NON-LICENSEE, I have to worry about the real estate commission’s “regulations” at all?

How can they dictate their “wishes” upon me if I have not joined their “fraternity”? (other than the licensing regs which, I believe, are statutory laws)

Thanks,

Brad


#15

Re: Is it legal? - Posted by MilNC

Posted by MilNC on December 05, 1998 at 13:08:53:

Having read several of your informative posts today,
you seem an appropritate person to answer my question
about “finders’ fees”. I’ve posted several times before
but never get an answer. I was under the impression, while I was in Florida (early 80’s)that a finder’s fee could not be paid to anyone who did not have a RE license, yet I’ve not seen this issue addressed on this
board, though many people suggest getting a finder’s
fee.

Any clarification on this would be helpful.
Thanks.


#16

Re: Is it legal? - Posted by Tom

Posted by Tom on December 08, 1998 at 01:04:15:

Thanks for the tip on www.wealthnetwork.com. I trotted over there breifly and it looks like I’ll have to load the printer up with reams of paper over the weekend. Tnx


#17

Re: First things First - Posted by Carol

Posted by Carol on December 05, 1998 at 17:12:49:

Just be sure to chose the atty carefully - many of them are also very good on STANDARD things …start with some local investor contacts to find your pros.

Good luck!


#18

Re: My States REALTOR Contract - Posted by Ed Wachsman

Posted by Ed Wachsman on December 06, 1998 at 04:41:38:

Brad -

Not knowing the laws of the state, my very strong suspicion is that without the specific language quoted in Mark’s post and without any contract language to the contrary, the contract would be assignable but with the original buyer remaining liable for the terms as they were originally written. That is, if the assignee failed to perform, the seller would have a cause of action against the assignor/original buyer. In most cases, any deviation from having the right to assign but remaining liable, has to be spelled out.


#19

Re: Is it legal? - Posted by JPiper

Posted by JPiper on December 05, 1998 at 13:51:39:

In most states collecting a ?finder?s fee? would not be enforceable in a court of law.

I think you may be misinterpreting what you have read?.but just in case, knowledgeable people are NOT suggesting that you collect a ?finder?s fee?. Rather, you should be locating properties, tying them up with a contract as a principal, and then either assigning the contract or flipping the property in some other way.

What you receive in return is not a ?finder?s fee?, it?s a profit. While the distinction may seem small, it?s a very important one in the law.

JPiper


#20

Re: My States REALTOR Contract - Posted by Michelle L. Matthews

Posted by Michelle L. Matthews on December 06, 1998 at 08:00:22:

Ed:

What would you suggest as a standard amendment to the contract to relieve the buyer from the contract after asigned?