Are You Illegally Acting as an Agent?

Are you Illegally Acting as an Agent?
I have been communicating with someone in the program who received a letter from a local detective with the police force. A real estate agent has reported that she is illegally acting as an agent in her business, which is wholesaling.
She seems to be following all of the principles of the program, which would make all of her operations legal, but in spite of that, there is an agent who has somehow decided she is breaking the law and reported her.
I am writing this post to define the difference between agency and ownership, and how that applies to us. I am also writing it to warn you against the activity that can get you into trouble.
Ownership of a property is a bundle of rights, benefits, and obligations, and is actually divided into two categories, according to the law.
1) Legal ownership--Basically means that your name is on the title;
2) Equitable ownership--All incidents of ownership except legal title.
Contracts between owners and other individuals transfer some of the rights away from the legal title owner of the property. A purchase contract or option agreement constitute a transfer of ownership rights to the buyer or optionee from the legal title owner.
From the time that the seller and the buyer sign the agreement until the closing, the owner holds what is called "naked" title, and the buyer has an equitable ownership claim to the property--they are now an owner.
The law says this is true because of their right to sue in court for specific performance on the contract for the transfer of legal ownership.
In other words, anyone who has a signed purchase contract or option agreement for the purchase of real estate is an equitable owner of that property--and they share that ownership with the legal owner.
So if that equitable owner wants to market the property for sale or assignment, they have a complete legal right to do so as an owner, and would be a principal in any transaction, NOT AN AGENT.
It is not possible to be a principal and an agent in the same transaction, because it is not possible to be yourself and not yourself at the same time.
As long as you place the property under contract first, you are allowed to do the things that owners do in marketing their property for sale or lease (of course, subject to the terms of the purchase contract or option agreement).
But, and here is the warning part, if you do not have a property under contract and begin sharing specific information about that property with a potential buyer for the purpose of marketing it and making a profit, you are acting as an agent, and unless you have a license, you are acting illegally. DON'T DO THAT!
In this program, we never advise people to do things that are illegal, unethical, or immoral. Using the real example above, this is not something to play around with. It can have real and severe consequences, and you never know when an insecure agent who doesn't understand what you are doing is going to feel that their position and livelihood are being threatened by a non-agent. We wish you a successful real estate investing career without being bothered with legal issues.

For more information from this post thread, go to: http://www.deangraziosi.com/real-estate-forums/contracts-and-offers/1455...