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Wholesaler vs. Direct Cash Buyer: How to Tell Who You're Dealing With
Some "we buy houses" companies buy and close themselves. Others sign a contract and then sell (assign) it to another buyer. Both exist in Utah. You deserve to know which is which.
- Any condition, any situation
- No fees or commissions
- No obligation to accept
- You choose the closing date
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Side by side
| Direct buyer | Wholesaler (assigns the contract) | |
|---|---|---|
| Who closes | The company you signed with | Often a different investor |
| How they make money | Fixing, renting or reselling the house | An assignment fee from the end buyer |
| Risk of the deal falling apart | Lower, if they have the funds | Higher if no end buyer is found |
| Price | Set by the buyer's own numbers | Must leave room for the wholesaler's fee |
| Disclosure | N/A | Should be disclosed clearly to you |
What assignment means
An assignment is when the buyer on your contract transfers their right to buy your house to someone else, usually for a fee. You still sell at the price in your contract. Many standard contracts limit assignment without the seller's consent, so read yours carefully.
How we handle it
Settled & Sold Home Buyers is a real estate investment company, not a real estate brokerage. We buy properties directly. In some cases we may assign our purchase contract to another buyer, and we'll tell you if that's the plan before you sign. Your price and terms do not change, and we close through a licensed title company.
Questions to ask any cash buyer
- Will you close with your own funds, or might you assign the contract?
- Can I see proof of funds?
- Which title company will close, and can I choose one?
- What happens to my earnest money if you back out?
- Is there any fee to me?
What Utah regulators have said
The Utah Division of Real Estate has said that assigning a contract is legal, but that using wholesaling as a business model to bring buyers and sellers together for compensation without a license can amount to unlicensed activity. If you have questions about a particular company, you can contact the Division.
Laws change. This is general information, not legal advice. Talk to a Utah attorney about your situation.
Common questions
Is wholesaling legal in Utah?
Assigning a contract is legal. The Utah Division of Real Estate has cautioned that some wholesaling business models may require a license. Talk to an attorney if you have concerns about a specific deal.
Will I get less money if my contract is assigned?
You receive the price in your contract. The end buyer pays the assignment fee on top of it.
Does Settled & Sold ever assign contracts?
Sometimes. If that is the plan for your house, we will tell you before you sign.