Do You Need a License to Wholesale Real Estate in Florida?

Do you need a license to wholesale real estate in Florida? This is a valid question among today’s investors. As a result, we’ve written this article to assist you. Every wealth-building plan should include real estate investment.

After rebounding from the historic crisis and global recession a decade ago, investors in Florida have enjoyed a booming real estate market for many years. Wholesale investing, sometimes known as “wholesaling,” is widespread, particularly among rookie investors. We’ve seen investors who have made a lot of money via wholesaling.

However, there are several widespread misunderstandings concerning the technique. This essay should clarify wholesaling and assist investors in comprehending the relevant legal issues.

What is Wholesaling?

Do You Need a License to Wholesale Real Estate in Florida

Wholesaling is crucial because it allows you to start making money in real estate with a bit of investment. Many of the “become wealthy fast with no money down” solutions advocated in seminars and infomercials are more sophisticated in reality.

Real estate may be profitable with just a minimal initial investment. However, it takes a tremendous amount of effort, the development of a solid skill set, and perseverance in a competitive atmosphere.

The niche of the real estate wholesaler

Next, consider the niche that a real estate distributor occupies in the market. A real estate wholesaler gets into a binding agreement with a seller to get the seller’s equity in a particular property. Furthermore, after that, the real estate distributor seeks an end buyer for the asset and assigns the seller’s agreement to the end buyer.

The distinction between the seller’s price and the buyer’s bid is the real estate wholesaler’s fee. A real estate broker is not the same as a real estate wholesaler. A real estate broker is someone who has a license that allows them to advertise and broker real estate.

Do you need a license to wholesale real estate in Florida?

Do You Need a License to Wholesale Real Estate in Florida

Some people think that wholesaling is illegal or needs a Florida real estate sales associate’s license. The fact is that a real estate license isn’t needed to participate in wholesale transactions in Florida lawfully. However, specific procedures must get performed to comply with the law. The phrase “wholesale” isn’t a legally defined term, and it might imply various things to different individuals. Generally, investors wholesale in one of two ways:

Obtaining a contract for a wholesale property

A potential buyer may place a wholesale listing agreement to acquire it in two ways. Contractual legal holdings between clients and sellers can be easily assigned to other persons unless stipulated otherwise in the agreement. The rights of a buyer may also be given to another client who will then come up and finish the asset transaction.

It is lawful for a contract buyer to transfer or sell their contract rights for a price, generally referred to as a “spread.” For example, you can authorize a contract with a landlord to get a house for $50,000. Next, visit another purchaser to offer to transfer or sell your rights as the buyer.

 You’re in a good position if you’ve negotiated a fantastic deal with an owner to purchase their home for $50,000 while its market worth is $75,000.

The end-buyer may find it worthwhile to pay you a $5,000 or more assignment fee to “step into your position” as the buyer and conclude the transaction with the seller.

In such a case, the “assignee,” or the final buyer, would essentially pay $55,000 for an asset worth $75,000. The “assignor” of authority under the contract would stand as the first buyer here.

Irrespective of whether any of the participants in the transaction has a real estate license, everything we’ve explained here is lawful. “Flipping the contract” is a term used to describe this technique.

This is valid because, like a “flip,” the buyer’s contractual rights get transferred rather than the property itself. The contractual right to purchase a property at a specific price is an asset in and of itself.

This may get sold with the aid of an assignment agreement between the buyers. A real estate license isn’t necessary since the authority to acquire the property gets flipped in the place of the property.

Method of “Double Closing.”

A “double closure,” which is another popular way to close a wholesale agreement, operates as follows: Returning to the preceding scenario, instead of transferring your customer’s contract rights to a new buyer, you may close on the property’s purchase and take ownership.

Then you may resell the property to an end-buyer for a more fantastic price than you paid for it, even if it was just for a short time. This is a different take on the “spread.” This situation is known as an “A to B to C” agreement, with “A” representing the seller, “B” representing the initial buyer, and “C” representing the ultimate end buyer.

His double closure is often accomplished on the same day. Major misunderstandings about whether or not you need a license to wholesale real estate in Florida

Wholesalers’ flawed marketing efforts are the cause of much misunderstanding and the false idea that wholesaling is unlawful or needs a real estate license. Inexperienced investors may sometimes promote a property under contract as if they own it entirely.

Wholesalers who don’t understand the difference between marketing a contractual right versus selling a home will frequently post signs offering to sell a house they don’t own and without a real estate license.

The contractual rights of the buyer are what a wholesaler genuinely holds, and they should represent what they’re selling. Also, when investors act as brokers, bringing parties together to earn a virtually real estate sales commission fee, they may be breaking the law.

The essential distinction that makes this unlawful is that investors act on behalf of others. This is in exchange for a cost rather than for themselves as the contracting party.

Real estate law in Florida

The laws regulating real estate brokers and sales associates are summarized in Florida Statute Chapter 475. Selling or trying to sell real property “of another” for remuneration needs a license, according to the law.

There is no problem selling the property “of another” whether you’re marketing your rights under an agreement or a property to which you’ve obtained legal title. You either hold contractual rights that may be transferred for a charge, as in the first instance, or you own assets that can be resold for again, as in the second scenario.

Frequently Asked Questions

Do you need a license to wholesale real estate in Florida?

Some people believe that wholesaling is illegal or requires a Florida real estate sales associate’s license. The fact is that a real estate license isn’t needed to participate in wholesale transactions in Florida lawfully. However, specific procedures must get performed to comply with the law.

What is the definition of a real estate broker?

A real estate broker is anybody who appraises, lists, bids, sells, swaps buys, or leases real property for the advantage of another and remuneration or valued consideration.

People who propose, try, or accept to evaluate, auction, or mediate the sale, transfer, acquisition, or rental of business operations, investment opportunities, physical assets, or any interest in or linked to such items are also referred to as brokers.

Real estate brokers may get payment, value consideration, or be promised such things for their efforts regarding deals. This can either be directly or indirectly.

Furthermore, suppose a person acts on behalf of another intending to collect or earn pay or valued acknowledgment in a real estate-related deal. In that case, they must hold a real estate broker’s license.

Although this is not the standard used by all states in the USA, it does include all of the operations that real estate agents engage in. Real estate wholesalers must not engage in any functions that come within the authority of a certified real estate broker to be on the right side of the law.

How can I lawfully wholesale real estate?

You’re not selling houses for someone else while you’re wholesaling. That means you must buy the property from the original seller and complete the deal before reselling it. Before you can legally sell a property, you must first possess it.

What kind of profit can I expect from wholesaling real estate?

Real estate wholesalers may anticipate earning $5,000-$10,000 in compensation per asset on average. This procedure may go rapidly if you have a property, a contract, and a potential buyer.

In real estate, what is a wholesale fee?

On the other hand, a real estate license permits you to assist sellers and buyers in real estate transactions and receive a commission. When you sell the equity position in a real estate contract wholesale, you are paid a wholesale fee (a.k.a. the contract rights).


In conclusion, Florida provides an excellent market for wholesaling real estate. And if you need more help in this regard, the above highlight on “do you need a license to wholesale real estate in Florida” will aid you immensely.

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