Is Wholesaling Real Estate Legal in Texas? | Wholesaling Real Estate for Beginners
Is wholesaling real estate legal in Texas? If you are looking into wholesaling real estate for beginners, then this video is for you. We will discuss the legality of wholesaling, how to find potential deals, pitfalls you want to avoid and where you can focus your efforts when it comes to wholesale real estate in Texas. We'll also talk about laws that support wholesaling as well as the wording needed for marketing purposes. When you are getting started wholesaling or virtual wholesaling, determining if wholesaling is legal in that state and the laws surrounding wholesaling is important!
If you are wondering how to wholesale houses and real estate investing, wholesaling in Texas is a great place to start. You'll be flipping houses in no time and making money in real estate.
Texas Occupations Code Section 1101.0045
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Texas Property Code Section 5.086
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You’re one of a few KZhead real estate channels that have mentioned govt lists. Subscribed
Glad you found this helpful!
Thank you so much Erica!!! This video just motivated me so much!!!
Thanks for this very informative video Erica!
Hello there! I'm getting into wholesale real estate and this video was just what I needed! Thanks!
Investor-friendly real estate agents are worth their weight in gold. So happy I found you and your channel Erica, thank you!
Very good information on this video, Really needed this info. Thank you so much!!!
Wish I found this video earlier! You’ve disclosed information that I needed to spend hours studying to find. Keep up the good work!
Great information in your video as well as the comment section. I am subscribed and will be following your channel. I'm currently looking for my first whole sale deal.
Awesome, thank you!
Great Vid!
Thank you. I appreciate the feedback.
Very good information Thank you!
Glad it was helpful!
Thanks!
❤❤❤ good Day . How are you doing today 🌹
Thanks for your info. Do you have a video explaining how to fill out the TREC contract ?
I do not. That isn’t a bad idea. I’ll record one this week.
@Chris Rodriguez kzhead.info/sun/rK6ccbWogat4q4E/bejne.html
Question... when wholesaling.. can u wholesale a REO in texas? and what fees do u pay including at closing? Also, if the agent agrees to apply my llc /and or assigs.. on buyer info, can I move forward with intention of wholesaling the property?
AMAZING video Erica, Do you recommend wholesale property in El Paso, TX?
I recommend wholesaling where you have a cash buyer. If you have a couple of cash buyers buying in El Paso with particular wants then you can find what they are looking for and wholesale to them.
@@ericaparkerthank you Erica!
Where do I find the investors/buyers
Great video Erica!. I have a quick question, I'm starting to wholesale in Texas but I'm trying to wholesale properties on the MLS and listed with agents and try to implement the double dip strategy (dual representative) but I read online that dual agency is not permitted in Texas unless there is an intermediary. I am super confused on what that means. Is there a way or loop hole to have dual agency without any risks to myself or the agent?
Dual Agency is not legal in Texas, but Intermediary is or offering to remain an unrepresented party is. An intermediary cannot provide negotiation advice to either party but can draft and facilitate the transaction with title companies, preferred vendor recommendations, etc. However, some Sellers may not be ok with that, because they want the agent to negotiate on their behalf. Therefore, if the agent is not allowed to be an intermediary by the seller, your options are as follows: (1) remain unrepresented, if you are confident in your negotiating abilities and understanding the contract, (2) have the listing agent refer you to one of their buyer's agents to represent you (they may be able to still get a referral fee), or (3) use your realtor that gives you CMAs, possibly access to the MLS, and deals when you flip them.
how did you first start, where did you begin , it’s hard to find to find people Who are berly starting whole sailing I’m looking into doing whole sale 🙏🏼😅
@@idairachavez5095 I started by getting trained. If this is a career you can either have intense learning before diving in (similar to college) or dive in with someone knowledgeable and learn on the job (similar to an apprenticeship). I suggest starting with finding legit cash buyers that are doing multiple deals a month and narrowing your search to areas around there.
Do you have any type of mentorship
Do you deal in gas stations ?
Very informative. Could you recommend wholesaler friendly title companies in Houston,TX?
I have someone to recommend. Can you please send me an email are Erica.parker@exprealty.com? I will email you my title company contact.
@@ericaparker Newbie wholesaler in Houston. May I email you as well in regard to title companies?
@@fp6228 sure
@@ericaparker May I email you as well?
@@blicka7.62 sure
Idk if this was asked yet but what trec contract should we use when selling land? I’m confused on if it should be the farming contract or the unimproved contract?
The Ranch and Farm Contract is generally used for rural properties with metes and bounds legal description from a survey and contains provisions to deal with items that are relevant to farms and ranches that are not specifically addressed in other types of contracts. Unimproved Contract is for property that does not have physical buildings, additions or fixtures on the land. It is generally used for property that has been platted (has a recorded Lot/Block legal description). More often Urban and Suburban areas.
hey erica, if I state on my contract that I need a certain inspection period, NOT AN OPTION PERIOD like mentioned on the TREC form, then do I have to pay the seller any fee to get that inspection period? Can the seller later sue me for backing out during the inspection period, and say that that was not enforceable if he already agreed to it in the contract?
No fee is owed. It is an inspection contingency. However, I recommend having an attorney draft the language to ensure that the thought is fully formed. You cannot just say there will be a 5 day inspection period. You have to be able to say what will happen at the end of those 5 days (ie will the seller be allowed to fix something you don’t like), if not then are you as the buyer free to move forward or terminate. All of those types of items need to be addressed. Hence hiring an attorney of 15-30 minutes to write that language for you one time for you to reuse over and over would be important.
Could you make a video how to fill out a contract if you are wholesaling?
Please check out my Texas Purchase Contract video. I go over what you want to fill out as an investor vs. a retail buyer/seller.
Great information. Is this still the current situation in 2024?
Yes. As of April 1, 2024, this is still the case and the information is still accurate.
@@ericaparker Thank you.
when marketing the equitable interest, what would stop the buyer from just skipping you completely and going straight to the seller behind your back?
Your under contract with buyer. So investor can’t buy until you are out of the pic.
I’m trying to start wholesaling in Texas through agents with incentivizing them through the dual agency technique but I heard dual agency is not allowed here. How can we get around that?
Dual Agency is not legal in Texas, but Intermediary is or offering to remain an unrepresented party is. An intermediary cannot provide negotiation advice to either party but can draft and facilitate the transaction with title companies, preferred vendor recommendations, etc. However, some Sellers may not be ok with that, because they want the agent to negotiate on their behalf. Therefore, if the agent is not allowed to be an intermediary by the seller, your options are as follows: (1) remain unrepresented, if you are confident in your negotiating abilities and understanding the contract, (2) have the listing agent refer you to one of their buyer's agents to represent you (they may be able to still get a referral fee), or (3) use your realtor that gives you CMAs, possibly access to the MLS, and deals when you flip them.
Do you do mentoring? Been wanting to get into wholesaling but don’t know exactly how to go about it.
Hi Jesse. I don’t. I have my hand in a lot of businesses and coaching/mentoring is not one I’m pursuing at this time. However, I can point you in the direction of some good courses if you want to learn where to begin.
@@ericaparker please do I’m wanting to get more into wholesaling instead of actually buying a property just tryna find the right direction into a different career path I stay about 2 hours outside of Houston be I’ll take all the help I can get to be successful
Hello dear friend, are you a virtual real estate wholesaler in Texas?
What if you’re working with a Realtor for an on market property… do they do the assignment contract? If so, will it be a TREC contract? Do I have to disclose to the Realtor that I am an investor looking to purchase the property (or is there another wording I must use)?
No. Agents in Texas are not allowed to use any contracts other than those provided to us through TREC (Texas Real Estate Commission) and TAR (Texas Association of Realtors) when representing a client, UNLESS that client gives us the document they want to use. Hence the reason for you to have your own Assignment of Contract or hire a real estate attorney to draft one up for you for a flat fee and use that one for all of your transactions thereafter. If told to use that AOC from the client, we can use it and take care of filling it out. As for letting the Realtor know you are an investor, I say yes. Let them know. “Hi! I’m Erica Parker and I’m a real estate investor. I am very interested in making an offer on 123 Banana St. Can you tell me more about it…” We can discuss what questions to ask Realtors or sellers in another video.
@@ericaparker as a wholesaler what form do I use and where can I locate them? I’m looking for the Purchasing agreement for the seller and a assignment contract for the buyer. Happy New Year
kzhead.info/sun/oZiydslog32Oq6M/bejne.html Watch this video of mine about the TREC purchase contract.
Are smaller towns like Abilene, population of over 100K worth wholesaling in? Or should one stick with the major metro areas?
I would say it is only worth it if you know of a cash buyer in the area. Look up “sell my house fast in Abilene, TX” and call the people that are advertising there. See if you can reverse wholesale to them.
As a real estate agent, can we work with wholesalers? What are the do’s and don’ts for licensed agent? Are we able to list for the wholesaler or only able to provide a buyer?
Hey @Itsplmartin, I'm a wholesaler in the real estate game and I've got a proposition for you. Let's talk partnerships, alright? I'm willing to give you 50% of every deal we close. That's right, half the pie, no crumbs. lmk what you think :)
Yes. If they are buying, then make sure they are giving a legit offer. My wholesalers can close on a deal if they can’t get it assigned prior to Closing. They have done their homework and know they have a HML or PML that will help them close until they selling to someone else. If they assign the contract, they must also assign the buyer representation agreement or cash buyer signs a new one with me.
My investors also send me retail seller leads, if they can’t make a deal out of it. It’s a great relationship.
Are you allowed to blackout your sellers price on the contract before giving it to the cash buyer so they wont try to negotiate from the price you got from the seller?
If you trust your cash buyer and have a working relationship with them, it shouldn't matter if they see the price. If they have agreed to your price, then they shouldn't try to renegotiate it. If there are more repairs than you had originally estimated, that is a different situation. As I stated, the cash buyer is taking the bigger risk so I do not recommend taking a $50,000 wholesale fee on a property that will only return $30,000 profit to your cash buyer. This is the difference between a "feast or famine" wholesaler and a wholesaler that puts food on the table for a living and eats well every night. Relationships are key in the investing world. On another note, if you are sending it out to multiple cash buyers, then you can redact the purchase price before sending out, if they have asked to see the other terms of the contract. Purchase price of the home shouldn't matter to them so long as the numbers work with the price you are asking.
@@ericaparker that makes perfect sense. Thank you
Do we have to use a Trec contract?
That’s a great question. If you are making offers on properties listed in the MLS, you need to use the TREC contract. Agents are required to use the TREC contract. If you are making off market offers, then you can use your own contract. However, I have found it gives sellers a sense of ease if you can tell them that you are using the TREC form which was written by a group of attorneys to ensure that the sellers and buyers’ rights are equally protected.
Great video! Quick question the contract you described for wholesaling is the same contract realtors use when selling houses? And then adding an assignment contract for the buyer ?
is daul agency legal to do is Texas can a agent represent a wholesailier is this legal in Texas ?
Dual Agency is not legal in Texas, but Intermediary is or offering to remain an unrepresented party is. An intermediary cannot provide negotiation advice to either party but can draft and facilitate the transaction with title companies, preferred vendor recommendations, etc. However, some Sellers may not be ok with that, because they want the agent to negotiate on their behalf. Therefore, if the agent is not allowed to be an intermediary by the seller, your options are as follows: (1) remain unrepresented, if you are confident in your negotiating abilities and understanding the contract, (2) have the listing agent refer you to one of their buyer's agents to represent you (they may be able to still get a referral fee), or (3) use your realtor that gives you CMAs, possibly access to the MLS, and deals when you flip them.
Do you do consult calls?
Thank you for the response. I am not currently doing mentoring calls.
I’m looking into wholesaling and I have a buddy that’s a realtor. How exactly could he be a help to me? other than having relationships with buyers
Realtors are a huge help to wholesalers. They can provide comps for ARV, contacts of certain contractors if you need more help in estimating costs, comps for renting as an exit strategy (note their comps can include off-market deals), or as said herein they can provide you assistant access to the MLS if they are too busy to run those comps. They can also help you calculate the holding costs more accurately. They should understand the housing market better, ADOM and inventory. These are all important when trying to calculate your numbers for the end buyer and your fee. I think an important question is how will you bring value to the Realtor so he will continue to provide this knowledge to you.
@@ericaparker Amazing, Thank you so much!
As a licensed agent in tx. What do I have to disclose while I’m wholesaling?
Disclosure is the biggest thing. You have to disclose on the contract that you, as the agent, are a party to the contract or an LLC you manage is a party to the contract. Wholesaling the contract is separate from the actual purchase contract. It is a payment for the rights to the contract and is done in the assignment; in addition, you can get paid twice by remaining the representative for the cash buyer (now the Buyer in the purchase contract) and collecting the commission as the buyer's agent. As for disclosure to the listing agent, you have to determine that. Right now the TREC purchase contract is automatically assignable. You do NOT have to do anything special to it in order to assign your contract to someone else. In the first paragraph as "buyer name" you could put "name of company and/or assigns". But it's completely unnecessary and often causes more alarm with the sellers and their agents. With the brokerage I work for, we have to agree to close on the property if we cannot find a cash buyer, otherwise they will stop our E&O coverage. It is important that you know your brokerage's policy on wholesaling.
@@ericaparker what broker are you with?
@@oxychuy_372 eXp Realty
In marketing, cant I just say "I am selling equitable interest in a property" instead of mentioning the property address as well
That is correct. The big item is that you disclose that it is equitable interest. If you do not want to disclose the address until you’ve spoken to the potential cash buyer and they are meeting you at the property to walk it, then you can wait for that.
@@ericaparker k thanks. So when you say market your contract on social media, then as long as i say selling my equitable interest in the property, i can display pictures of the property, right?
@@shashgo Yes
@@ericaparker On the TREC contract, it says the EMD has to be paid within 3 days after signing the contract, can that number be changed to a different number, like say 5? Is that contract still valid if the buyer agrees to it
@@shashgo If you and Seller initial off on the change from 3-5, then it is valid. Both parties have to initial the change since it isn’t how it was originally drafted.
I don't suppose you have any contracts with all of this in it do you? 😅
The main contract is the TREC contract. That is what you can use to get the property under contract. Look up the Texas One to Four Family Residential Contract (Resale). The assignment of the contract and/or consultation fee agreement are not forms provided through the real estate commission. I unfortunately cannot provide those contracts because it would violate my real estate license in Texas. But I do have some that I use and I recommend reaching out to other Wholesalers (that are not real estate agents) to see if they will share their contracts or talk to a real estate attorney. You might also be able to look up a form assignment of real estate contract.
@@ericaparker to clarify the TREC Contract may be used to have a motivated seller's home under contract, however the assignment of contract to a buyer is another form?
@@fp6228 That is correct. It is a separate contract.
Any investors? I wanna grow my list of trusted investors.
No its not legal do not do it. Find another state
John, there are thousands of investors that wholesale real estate in Texas every year. If you watch the video, I go over the laws and what you need to make sure you do/say when wholesaling and marketing your equitable interest in the property. If you have any questions about ensuring you stay within the regulations, please let me know. Thanks!
@@ericaparker lol 😂 people shouldn’t do it in Texas especially DFW
I'm sorry to hear that you had a bad experience. Good luck on your new state of choice! 😊