Most people refer to flipping houses, houses wholesale. Simply it means acquiring a property at a lower and sell it at a higher price to make a profit price.
Flipping involves buying houses cheap and then sell high, just like any other business. The business of real estate investing is misunderstood due to the fact that transactions in real estate can be complicated. And, of course, some real estate investors have not been honest, there ended in trouble.
So is it illegal to sell houses?
First, do not take this article as legal advice; You should always consult your attorney. Real estate investors who get in legal trouble usually the law in one way or another break.
First, what does flipping houses?. While the above definition means buy low, sell high, the details of the transaction may vary, leading to misunderstandings. We will review each method and explore whether it is legal or not.
How to sell the home? One-North Eden site will offer the best tips. The implementation will require the skills and excellence of the owner. The understanding of the requirements is excellent at the platform. The selection of the right method will provide the desired results.
1) Contract Awards Contract
allocation means identifying a house below market value, put it under contract and then assign the contract payment to a real estate investor or wholesale buyer.
In this case, what you sell the right to buy the house, but you do not actually sell the house.
2) You go home with a quota allocation at closing.
This is the simplest method of flipping houses. Note that represents no one, not even own the property at any time during the transaction. You just need to put the property under contract, then sold his right on the contract.
simultaneous closure of simultaneous closure means putting the house under contract, the identification of a wholesale buyer, purchase, and then sell the house to the buyer.
Both transactions occur at the same table closing one where you buy and one that sells. So only the owner of the house for a few minutes before selling.
There are two sets of closing costs and walk home with the difference between the purchase price and the selling price.
3) Purchase, then setting sell
Although moving a flip houses not normally fit this description, some people buy a house, fix it then sell it for profit.
There is nothing wrong with this, just buying low, enhancing the value and then sell high.
What can go wrong with flipping houses?
1) represents one-third without license
Flipping houses does not mean they represent a third party to the transaction. You or sell the right to buy the property, or to buy the property and then sell it for a profit.
A real estate agent performs the transaction on behalf of a buyer or seller and walks away with a commission. A license is required for it.
2) Mortgage fraud
course, is against the law to commit mortgage fraud. No matter what type of transaction is involved this will certainly get into trouble.
3) Be dishonest
When buying houses motivated sellers, it is crucial to be very clear and specific let them know exactly how he is handling the sale. All you need to know is how much they are receiving as their agreement and when the deal closes.
I like to go a step further and let them know exactly how I’m handling the transaction, so if there is any delay, it is understood why.
While you are clear and never misrepresent anything, then you have nothing to worry about.