Posted by Houserookie on October 10, 2003 at 12:14:22:
Logic behind laws? I think there’s a website that focuses on stupid laws a quick google search should lead the way.
This discussion is on the laws as they are now…not why. There’s not one reason why laws are created or even proven to benefit the mass. For all we know it’s some lobbying group pressuring people to use agents.
But then it might also help to track repeat offenders.
Cheerz,
RE license issue revistied - for Bill Bronchick - Posted by mattc - mi
Posted by mattc - mi on October 07, 2003 at 14:40:30:
Bill,
Do you have an update or link for the other states?
I’m particularly interested in L/O and Straight Options
for Michigan.
Thanks in advance,
mattc - mi
I’ve been reading the archives for an hour or so - and
came across your article here:
http://www.creonline.com/wwwboard/messages/19889.html
Reposted below.
Bill B wrote:
I have my associate working on researching all 50 states law on the real estate broker license issue, specifically, whether you need a license to buy, sell, option, lease or otherwise deal in real estate on your own behalf as a principal.
This is what we have come up with so far…
AZ, AK, CA, TX, CT, NY, OH, PA, MN & FL all have similar licensing statutes. They define broker as one who, FOR ANOTHER, lists, sells, manages etc. There is no doubt that an investor can buy, sell, lease or option properties in these state. CO and NM statutes, while somewhat fuzzy, still permit investors to deal in lease/options.
So far, MS (Bennie Brown’s state) appears to have the only confusing statute. Read literally, the statute requires a license to buy or rent real estate, even to live in. Silly, you say, which is why I think the common law definition of “broker” would still apply: one who brings a buyer and seller together for a fee (MS law uses the “in comensation by fee or otherwise” language, which presumes an employment or agency-type relationship). We’ll see how the Bennie Brown thing unfolds, but I cannot imagine it was anything other than a fluke; I know many MS investors that have been heavily engaged in this business for 10 years or more without a hiccup.
I will post a complete state by state summary when we are finished.
In the meantime, understand that confusion will always arise when dealing with uneducated people. Once in a while, a real estate broker sees you advertising houses and may report the matter to the state licensing authorities. The real estate commission may even write you a letter, investigating the matter, but these things, handled properly, go away.
In a recent newsletter from the Colorado Real Estate Commission, the #1 Honcho wrote an article in which he bestowed upon us his vast ignorance by using “deed of trust” synonymously with “deed.” This is the sh** we investors must deal with from the “educated professionals” that work for the state,
Re: RE license issue revistied - Posted by bill
Posted by bill on October 09, 2003 at 09:48:55:
anyone know of Wisconsin limits?
Re: RE license issue revistied - Posted by Bill Bronchick
Posted by Bill Bronchick on October 08, 2003 at 13:40:16:
Not finished with the list, but MI clearly states that all activities required a license when acting “as owner or otherwise.” There is an exemption for up to 5 per year.
license issue revistied - Posted by Houserookie
Posted by Houserookie on October 07, 2003 at 15:54:30:
And then there are states like Michigan that limit investors to five properties without a license.
In MN the limit is five transactions. Over five transactions will require either a license or what is called a limited brokers license.
Cheerz,
thanks Bill - will worry when I get 5 
- Posted by mattc - mi
Posted by mattc - mi on October 08, 2003 at 13:51:46:
Thanks Bill.
Since I’m working for my first deal part-time,
I can worry about that when I get my first
five done I guess! :–)
When I get ready for number 6 in one year - I can
find a Realtor to work with me I guess, and let
them make my offer.
Thanks a lot,
mattc - mi
HR - is that 5 per year in Michigan? - Posted by mattc - mi
Posted by mattc - mi on October 07, 2003 at 16:13:08:
HR,
Is that 5 per year in Michigan?
Do people get around that by doing say five in
one entity (LLC), and five in another, etc.?
Thanks for responding. I tried to read all that I could
in the archive - and MEGO!
mattc - mi
Re: HR - is that 5 per year in Michigan? - Posted by Houserookie
Posted by Houserookie on October 08, 2003 at 09:21:59:
Michigan has a limit of five PROPERTIES. Minnesota has a limit of five TRANSACTIONS …or two properties.
I can’t comment on the five per entity question and have not tried myself. I have heard that once the state has a file on you or your company, they really have their eyes on you.
I have a limited brokers license so I am protected from the limit. I costs $160 for the license and requires no classes or training. They may have something similar in your state.
Prior to getting my limited brokers license I included an agent in every transaction. I didn’t have to pay full commission I just had to use them to facilitate the process or list in the mls. This circumvents the licensing requirement.
Call your local real estate commission about the limit in your state.
Better yet search the web for state laws as they pertain to your situation.
Cheerz,
thanks - that sounds anti-free market to me - Posted by mattc
Posted by mattc on October 08, 2003 at 09:59:54:
Thanks for the info. This all sounds very
anti-free market to me. They have a file and
will be watching me? If so, they need to cull
ranks at the state offices - as they have too much
time on their hands.
It should not be anyone’s business if you buy
and sell homes, as long as you are being fair
and ethical with everyone.
look at it from the other side… - Posted by Houserookie
Posted by Houserookie on October 08, 2003 at 15:21:29:
From the State’s POV they want to make sure that you do what you say and that you are doing things ethically, responsibly, and that you don’t rip people off.
You wouldn’t want me to perform surgery on you, would you? It’s no one’s business but mine after all.
“Should” doesn’t matter - Posted by rm
Posted by rm on October 08, 2003 at 13:49:45:
and it never did.
And being “fair and ethical with everyone” is a matter of opinion.
First, focus on actually buying and selling five homes.
Once you get to that level, then you can worry about the broker’s license issue.
And this really isn’t about active enforcement- to my knowledge, there isn’t a state agency with detectives trying to find out who’s in violation of this rule.
But it only takes one person, one time, who decides after the fact that they don’t like the deal you made with them, to get you into trouble.
Or, the competitor or petty real estate agent who’s deal you “stole.” Or just someone with a burr up their … who wants to make your life difficult for awhile.
A call/letter to the state AG is enough to launch and investigation… and believe me, those people DO have too much time on their hands.
Re: look at it from the other side… - Posted by Tom PA
Posted by Tom PA on October 09, 2003 at 09:11:43:
I can’t see how limiting the number of transactions or properties is going to ensure ethical and/or responsible behavior.
The surgery analogy was a bad one. But that really doesn’t matter anyway. I think your point was that other people are involved in the transaction so it isn’t ‘no one’s business but mine’. Which is a valid point.
What it boils down to is you have to follow the rules or be subject to the consequences. That may mean different entities, Limited brokers license, or other some such method.
You’re missing the point… - Posted by Houserookie
Posted by Houserookie on October 09, 2003 at 11:11:40:
there is no LIMIT to how many houses you buy or sell.
You can buy and sell 1000 a year if you could.
From the State’s POV, anybody that buys or sells more than two a year is a professional. The State is just trying to protect the sheep from the wolves.
That is not to say that all wolves are dangerous all the time.
Cheerz,
Re: You’re missing the point… - Posted by Tom PA
Posted by Tom PA on October 09, 2003 at 11:25:19:
OK, symantics seems to be getting in the way here. Although, ‘limit’ was a term that you used and I reused in my reply.
I still don’t see how this would protect anyone. Please explain the protection provided and who receives that protection.
Well first of all… - Posted by Houserookie
Posted by Houserookie on October 09, 2003 at 16:24:55:
The state can eye those that buy and sell regularly so that they are actually buying and selling and not providing services, for a fee, that would normally require a license.
It protects the consumer.
Re: Well first of all… - Posted by Tom PA
Posted by Tom PA on October 09, 2003 at 16:33:17:
But, if I am providing services for a fee then there will be no purchase and sale on my part.
Sorry, I just don’t see this as a method for protecting the consumer. More of a method to generate revenue for the State. Which is fine as long as it is recognized as such.
Re: Well first of all… - Posted by Houserookie
Posted by Houserookie on October 09, 2003 at 22:21:11:
There’s not enough investors that pay $160 to make it profitable for the state. Most investors dont even know about it.
Many investors still live in the dinosaur era when principles were license exempt.
Things are not as simple in the real world as you have described. If there’s no law to break then there would be no need for enforcement, would there?
There have been investors that portrayed themselves as agents to take advantage of consumers.
Probably the same reason that there are labels on knives that say don’t poke in eye.
Cheerz,
Huh?!?!?! - Posted by Tom PA
Posted by Tom PA on October 10, 2003 at 05:25:36:
Ok, I was questioning the validity of this particular law’s ability to protect the property owner from the investor. Not whether or not there should be a law. You must have got my message confused with someone else’s because I don’t think that I have ever described the real world as simple.
Anyway, I have yet to see a good argument that this law actually protects sellers from investors. There are already laws to prohibit people from brokering without a license. There has to be another reason.
and which laws would that be? - Posted by Houserookie
Posted by Houserookie on October 10, 2003 at 10:11:42:
that prohibit people from brokering? Is that the law that says you can’t brokr without a license? LOL
Search the archives and maybe you’ll find a few hundred posts on what brokering means to different people.
You’re thinking too hard. Whatever the missing reason is that you’re thinking of only you will be able to come up with it.
I still can’t even figure out why the speed limits are in multiples of five.
Cheerz,
Re: and which laws would that be? - Posted by Tom PA
Posted by Tom PA on October 10, 2003 at 10:52:07:
I would like to think that you know what I meant by brokering without a license. If not, then that explains a lot.
Actually, I am not thinking that much about it. Just logically looking at the impact that it would have. If I had to operate in that environment I would do what was necessary to operate. I just am not able to see the purpose of that particular law (you know the one with ‘limits’). I still don’t see what it accomplishes. Nor have I read an explanation that makes sense.
Oh well, this topic is probably taking up more disk space than it is worth. LOL.