Hi, this is Jeff with Kendall Partners. Hey, I wanted to take just a minute and shoot another quick video about what’s going on in regards to wholesaling real estate in Illinois. A few months ago there was a new law that was passed that basically says, if you’re going to try and sell more than two homes in any one given year, then you have to be a licensed real estate broker. Now, I am not a licensed broker. I am not a licensed attorney, nor do I care to be. But I wanted to make a few differences about wholesaling real estate and what we do here at Kendall Partners.
In wholesaling, someone or an investor would normally try and get your property under contract and then assign their interest in the property or assign their interest in the contract to another end user. That could be another investor, that could be a owner occupied, it could be anyone. But they’re basically taking a cut in the middle for a fee and that fee could be $500, I’ve seen them as high as $50,000. And it’s not necessarily illegal, but now it’s going to become more challenging to do so.
I did want to make it known that at Kendall Partners since 2007 we’ve been buying hundreds and hundreds of homes and we have never wholesaled. We’ve thought about it and we’ve looked into going that route. We’ve just never done that. So obviously we’re not going to go down that road now. But with wholesaling, technically the wholesaler or the investor, whoever’s handling that transaction, needs to have a couple of things. They need to have intent and they need to have capacity. They need to have both of those things in order to move forward and actually do a real estate deal. If they have one or don’t have both or don’t have either, then technically, in my opinion, as the way I read the law, then the contract really isn’t a contract and they are not wholesaling. They really never had intent to purchase the property.
So in other words, if someone approaches you, if you’re the home seller and approaches you and you sign a contract with them and there’s some language in there that allows them to assign the contract, oftentimes the buyer may say that they need two or three weeks to do an “inspection” or a “second eyes appraisal”. A lot of times I’ve seen they want to make sure that they have enough time to go ahead and get the property under contract at let’s say $200,000 and then go remarket that contract, your property, at $250,000 or whatever the price may be. Mark it up a little bit and go after the next buyer to try and make their cut or their spread in the middle.
Again, perfectly legal from my understanding, but now they can only do two of those a year unless they’re a licensed broker. And I think that they’ll have to disclose that they are now a licensed broker as well. And that’s fine. And I’m not here to say that that’s wrong or I’m definitely not here to say that that’s illegal to do that now if it’s done properly. I just want to make sure that everyone knows, especially people that are working with Kendall Partners, that we do have the intent and we do have the capacity and we have 12 years to back that up.
So one thing I… a suggestion I would say, is to any home seller out there is read the contract. If it’s four or six or eight or 12 or 15 pages, I know they can get very lengthy, but read the contract and understand what you’re signing. At Kendall Partners we use a simple one-page contract. Attorneys really seem to like that. They may want to modify the contract a little bit and that’s okay. We’re used to seeing that after as many deals as we’ve done.
But the point is simple. We’re going to lay it out in simple, easy to read English and we are not assigning our interest. Kendall Partners actually takes title to the property. So if we end up doing a deal with you and we’re negotiating the sale of that deal, you should know, and in our contract it states that we are taking title. We’re actually paying for the title, we are paying the closing costs, we are doing all of that. And again, We’ve been doing this since 2007. 300 or 400 houses later, our experience and our reputation has been proven in the marketplace and that’s verifiable with attorneys and brokers, and of course Chicago Title Company has handled most of our business since then.
So again, read the contract. If it’s not our contract, even if it is our contract. Myself, if I’m working with you, then I will go through the contract with you. There’s no the ‘big print gives it to you and the small print takes it away’. You know that little fine print at the end. We don’t have any of that. So a simple one-page contract, we take title to the property and we’re not looking to assign our interest.
Again, biggest thing is if you’re looking to sell your home to a cash buyer, make sure you know who you’re working with. Make sure you understand are they looking to assign their interest or are they actually purchasing the property? Oftentimes we will get calls here at the office or I’ll get a text message from somebody we have worked with in the past and they will say, “Hey, I’ve got a deal that’s falling apart. My purchaser is no longer able to perform because their buyer couldn’t perform.” It’s kind of a daisy chain or a domino effect, if you will. Their buyer can’t execute or can’t perform and the whole thing falls apart or you have to start over again.
So we get emails all the time saying, 123 Maple Street in Lisle, for example, is under contract. We’re looking to assign our interest. And again, perfectly legal from my standpoint, I don’t know that to be illegal. Now again, if they’re doing two or more deals per year, which most business people are, then they will have to be licensed and disclose that to you and to all parties involved to my understanding. And if that deal falls apart, then you are back to square one.
So read the contract, know who you’re working with. They should be above board of course. Do your due diligence on them. Go to their website, call their office, stop by their office. You’re welcome to stop by our office. We’re here in Yorkville. This is my office here I’m shooting this video in now. And make sure that the purchaser, whether it be us or someone else that you’re working with, has the intent to purchase it, to go through with the entire transaction and the capacity. Do they have the financial wherewithal to perform? We are a cash home buyer so we are not going out to look for a mortgage. There’s no appraisal process. We don’t need to go to a second set of a board or council or any type of a committee for approval, whether it be $100,000 purchase price or a $1 million purchase price. It’s all the same to us. If we write a contract with you then we are saying that we have the intent and the capacity to perform. And again, our track record of of 12 years of doing so since 2007 speaks to that.
So again, Jeff with Kendall Partners. Do your research when you’re working with a purchaser on your home. We buy things as is, we buy all of our homes as is. We normally are always handling the clean-out or cleanup and that can be a a couch left behind or a few boxes in the corner. It could be a whole house of stuff. We’re open to working with you in all those situations. We just bought one a few days ago that the whole house, the garage, the yard was full of contents. So we’re not looking for you to do repairs. The house could be in really good condition, it can be in not good condition.
A good portion of what we do is work with people that have lost a loved one and they’re doing an estate sale or the property is tied up in probate and we’re working with the family, the heirs, the executors, the administrators, whoever’s involved of course mostly an attorney and to get this approved via probate. We’re experienced in doing all of that. And we have no trouble or no problem waiting patiently to… Again, we have the intent to purchase the property so we’ll work with you on that.
So anyway, those are the updates on the law. Do your own research. The bill that was passed here in Illinois, the wholesaling bill, was SB1872 and you can Google that. Do your own research and get your own understanding as to what that means to you and your transaction if it pertains to you. We look forward to working with you. Jeff with Kendall Partners. We hope to work with you soon. Thank you.