Is Wholesaling Real Estate Legal In Alaska? A 2024 Guide For Investors

Investing in real estate wholesaling offers significant advantages, including the potential for quick returns and relatively low initial capital requirements. This strategy allows investors to act as intermediaries, connecting property sellers with potential buyers while earning a profit from the transaction. However, the legality of wholesaling real estate in Alaska depends on strict adherence to state-specific laws, regulations, and licensing requirements, which begs the question: Is wholesaling real estate legal in Alaska?

Understanding the legal parameters surrounding real estate wholesaling is essential for those aiming to engage in this investment strategy within the state. This resource aims to equip investors with the necessary knowledge to navigate the market effectively and ensure compliance with all regulatory standards by providing a detailed guide to the legal landscape of real estate wholesaling in Alaska:

• What Is Real Estate Wholesaling?
• What Do You Need To Know About Wholesaling Houses In Alaska?
• Is Wholesaling Real Estate Legal In Alaska?
• What Are The Wholesaling Laws In Alaska?
• Do You Need A License To Wholesale Real Estate In Alaska?
• Final Thoughts

*Before we begin our guide on whether wholesaling real estate is legal in Alaska, we invite you to view our video on How To Wholesale Real Estate Step by Step (IN 21 DAYS OR LESS)!

Host and CEO of Real Estate Skills, Alex Martinez, provides a comprehensive, step-by-step guide for beginners to start wholesaling real estate!

Wholesaling real estate as an investment strategy has become one of the preferred real estate investments in today’s real estate market. Its increase in popularity can be attributed to the following:

• Easy access to available wholesale properties in a digital landscape that includes online auctions, foreclosure info sites, and websites like Zillow and Redfin, among others.
• Small capital requirements to complete the wholesale deals in terms of the earnest money deposit given in good faith.
• Quick turnaround times make wholesaling one of the quickest ways to make a profit in the real estate sector.
• Comparatively, real estate wholesaling is one of the least-risky investments in the housing sector. That's not to say there's no risk, but that there's less risk in wholesaling than with its counterparts: flipping and renting.

Real estate wholesaling has become synonymous with several benefits, but plenty of people still doubt its viability. For one reason or another, they still ask, "Is wholesaling real estate legal in Alaska?"

What Is Real Estate Wholesaling?

Wholesaling a real estate deal is simply an investment strategy in which the investor finds a home to buy that is typically priced below market value. The reason for the reduced price tends to center around the seller's financial difficulties.

When the terms of the transaction are agreeable to both, the seller and homeowner execute a legally enforceable purchase contract in which the buyer/wholesaler is awarded a saleable, liquid asset – equitable ownership of the contracted subject property.

The equitable interest is granted by the Principle of Equitable Conversion or Equitable Interest. As an asset, the contracted buyer has the right to sell their ‘equitable rights’ to another buyer or cash buyer – using the legal instrument known as an assignment of contract.

The final buyer in the wholesale real estate transaction is usually a cash buyer, one of many potential buyers a wholesaler may have an existing affiliation with.

A wholesaler can profit by:

1. Finding a motivated homeowner with a well-priced home – i.e., rental property or investment property.
2. Executing a contract to purchase the property.
3. Assigning the contract of sale to another buyer – for a higher price. By acting as a middleman, real estate wholesaling professionals profit by buying properties from owners in need of a quick sale and assigning the right to buy the property to another interested investor. The difference in price is known as the assignment fee or gross profit.

What Do You Need To Know About Wholesaling Houses In Alaska?

If you're considering wholesaling houses in Alaska, the first thing to know is that it's crucial to familiarize yourself with local real estate laws and the available strategies for wholesaling—like contract assignment, double closing, and wholetailing. Each strategy has its own ideal scenarios, and knowing which to use and when can greatly enhance your success.

Contract assignment is often the simplest form of wholesaling; it involves securing a contract to buy a property and then transferring that contract to an end buyer. Double closing might be necessary when contract transparency could impact the deal's terms unfavorably, as it involves you briefly taking the title before immediately reselling. Wholetailing is useful when a property needs slight improvements before it can attract retail buyers; you buy it, spruce it up, and sell it, aiming for a profit.

Now's a promising time to get into the Alaska market. According to RedFin, the median sales prices have increased by 2.3% year over year, showing healthy appreciation. Meanwhile, even though the number of homes sold has decreased by 3.5%, the faster sales pace—median days on the market are down by seven days—and the limited inventory of just two months suggest a high demand and quick turnover, perfect for wholesaling strategies. This dynamic creates opportunities for new wholesalers to step in and capitalize on.

There are many opportunities, but aspiring investors should consult with the state's leading real estate organizations to answer the question, "Is wholesaling real estate legal in Alaska?"

The following represents the larger trade and professional organizations in Alaska, each of which is a member of the National Association of Realtors (NAR):

• Alaska Realtors (AR): The Alaska REALTORS is a statewide organization offering a united voice for real estate property owners and agents throughout the state. In addition, the AR is the marketplace’s benchmark for ethical conduct, an exceptional source for continuing education, and an active legislative committee, to name a few.
• The Anchorage Board of Realtors (ABOR): Located in the state capital, the Anchorage Board of Realtors is known as Alaska’s voice for real estate in Anchorage. This professional organization is among the largest in the state and includes professionals working in real estate-related fields.
• The Southeast Alaska Board of Realtors (SEABR): The Southeast Alaska Board of REALTORS, with more than 120 active members, serves the communities in the southeastern portion of the estate, including Prince of Wales Island and Juneau.
• The Valley Board of Realtors (VBR): Located in Wasilla, the VBR is the voice for property owners, real estate, and related professionals throughout the valley. The Valley Board of REALTORS offers advocacy, continuing education, and community engagement.
• The Greater Fairbanks Board of REALTORS (GFBOR): With nearly 300 members, the Greater Fairbanks Board of REALTORS is one of the largest professional organizations in the state. It supports the rights of professionals and all property owners in the greater Fairbanks area.

The Alaska Real Estate Commission is a state-run agency housed within the Alaska Division of Corporations, Business, and Professional Licensing. AREC is responsible for administering and enforcing the laws that govern real estate activities and licensees in Alaska. Their duties and powers are found in 08-88-071 of the Alaska Statutes and Regulations—Real Estate Commission.

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Types of Real Estate Licenses Offered by The Alaska Real Estate Commission

A Real Estate Broker

A real estate broker who represents or provides specific assistance to a person in a real estate transaction when another licensee who is working for the broker represents or provides specific assistance to another person in the same transaction.

The Broker licensing requirements include passing the appropriate exam, not being under indictment for a felony or other crimes, applying for licensure, paying appropriate fees, meeting appropriate education requirements, and obtaining and maintaining E&O insurance.

Another requirement for a Broker's License is completing 30 classroom hours of approved broker training. A person must have completed 36 consecutive months within the last 60 months as a real estate licensee.

An Associate Real Estate Broker

A real estate licensee who works for a real estate broker and represents or provides specific assistance to a person in a real estate transaction when another licensee who is working for the same broker represents or provides specific assistance to an unrepresented person in the same transaction; or must complete 30 classroom hours of approved broker training and must have been a real estate licensee for 36 consecutive months within the last 60, and real estate must have been his/her principal occupation.

A Real Estate Salesperson

A real estate licensee who works for a real estate broker and represents or provides specific assistance to a person in a real estate transaction, while another licensee who is working for the same broker represents or provides specific assistance to an unrepresented person in the same transaction. A salesperson's licensing requirements include passing the appropriate exam, not being under indictment for a felony or other crimes in the judgment of the commission, applying for licensure, paying appropriate fees, and meeting appropriate education requirements.

Licensee Exemptions in Alaska - Article 6. General Provisions (§§ 08.88.900)

Sec. 08.9900 states the exceptions in this chapter, such as a person who is not licensed under this chapter who manages or makes a real estate transaction with respect to real estate the person owns or is seeking to own so long as the compensation the person receives does not include any portion of the commission or other compensation paid to a real estate licensee in the transaction.

Real Estate License Reciprocity In Alaska

Alaska has no active reciprocity agreements with any other state. The law offers this guidance as stated:

Sec. 08.88.263. License by endorsement:

A person who holds a valid active real estate license issued by another state shall be granted an equivalent Alaska real estate license if that person (1) passes the portion of the real estate examination that examines on state law, (2) meets the requirements of AS 08.88.171; and (3) satisfies the educational requirements under AS 08.88.095(a) if the person has not held the license issued by the other state for one year or more.

Read Also: The Pros & Cons Of Wholesaling Real Estate: An Investor's Guide

Is Wholesaling Real Estate Legal In Alaska?

Yes, wholesaling real estate in Alaska is legal if the real estate investor/wholesaler avoids violating Alaska's real estate and license law. In other words, unlicensed wholesalers can wholesale real estate as long as their actions don't require a license. In addition to license law, they must also follow the rules and regulations governing contracts and real estate transactions.

A real estate wholesaler’s ‘equitable rights’ are delineated by the terms denoted in the contract or sale or purchase agreement. Most contracts are, by default, assignable, although a real estate attorney or fiduciary representative may modify the contract and ask that these revisions be initialed by all parties to the contract.

Remember, a real estate wholesaler is awarded the right to assign their ‘right to purchase the contracted property’ to another willing buyer if there are no prohibitions or required conditions provided for in the purchase agreement. Most real estate contracts are, by default, assignable, although the motivated seller or their representative may choose to modify the contract in this regard.

Wholesalers are advised that it is prudent to consult with an Alaskan real estate attorney should a question of legality arise regarding the contract or the overall transaction.

What Are The Wholesaling Laws In Alaska?

The two primary legislative acts in Alaska that govern real estate practices and activities in the Alaskan industry.

• The Alaska Statutes AS 08-88 – Real Estate Brokers & Other Licensees, with these specific articles:
  • Article 1 – Real Estate Commission
  • Article 2 – Licensing
  • Article 3 – Miscellaneous Provisions
  • Article 4 – Real Estate Recovery Fund
  • Article 5 – License Relationships and Duties
  • Article 6 – General Provisions
• The Alaska Administrative Code 12 AAC 64
• Proposed Regulations & FAQs

Alaska real estate law offers this guidance with regard to the need for obtaining an Alaska real estate license. Sec. 08.88.161 states that; unless licensed as a real estate broker, associate real estate broker, or real estate salesperson in this state, a person may not, except as otherwise provided in this chapter; sell, list, collect, negotiate for a contract to practice, assist in or direct the procuring of prospective buyers and sellers of real estate.

The potential consequences and penalties for violations, as stated in Sec. 08.88.167, that a civil penalty may not exceed $5,000, or the amount of the gained realized plus $5,000, whichever is greater for each offense.

Read Also: How To Wholesale Real Estate In Alaska: Step-By-Step

Do You Need A License To Wholesale Real Estate In Alaska?

No, real estate wholesalers working in Alaska are not required to hold a state-issued real estate license (as a real estate agent, associate broker, or real estate broker) if their choices/actions remain within the legal confines of license law in the Frontier State.

To sidestep potential legality issues in the state of Alaska, wholesalers will find these suggestions quite insightful:

• Actions should be done with integrity and full transparency. Seek an attorney’s help to ensure the contract is correctly worded and without ambiguity.
• Manage the expectations of all parties with honesty and candor.
• Do NOT sell or market real property – sell or market the equitable rights awarded when signing a real estate contract.

Final Thoughts

In wrapping up the discussion, the answer to "Is wholesaling real estate legal in Alaska?" is a definitive yes. Wholesaling is perfectly legal as long as you abide by the law. Key to this legality is ensuring that, as an unlicensed wholesaler, you do not engage in activities that require a real estate license, such as representing others in the purchase or sale of property. Instead, your role is to market and sell only your equitable interest in the property, which you've secured through a contract.

Now that you understand the legal framework surrounding wholesaling in Alaska, it's an excellent time to turn this knowledge into action. I recommend enrolling in Real Estate Skills' free training program. This program can equip you with the necessary tools and insights to effectively capitalize on the current market opportunities, helping you launch or advance your career in real estate wholesaling.

*Disclosure: Real Estate Skills is not a law firm and the information contained here does not constitute legal advice. You should consult with an attorney before making any legal conclusions. The information presented here is educational in nature. All investments involve risks and the past performance of an investment, industry, sector, and/or market does not guarantee future returns or results. Investors are responsible for any investment decision they make. Such decisions should be based on an evaluation of their financial situation, investment objectives, risk tolerance, and liquidity needs