Q: I wish to sell an investment house I own personally. Do I need a license? I live in Washington DC. Also, can I give the buyer financing (it would be seller-financing) to buy the home. Would I need a license for that as well?
A: Good questions. In most places, if you sell, lease, market, show or advertise real estate for sale, you must have a real estate salesperson or broker license. That license is issued by the state in which the real estate is located. However, licensing laws generally carve out an exemption for an owner selling his or her own properties.
In your case you might not need a real estate license to sell the investment property you own personally in Washington, DC. However, you will have to show the property yourself and may have to indicate to prospective buyers that you own the property and it’s being sold by owner.
Remember, you can’t have a family member or friend show the property for you nor can you have them step into your shoes or undertake the role normally taken by a real estate salesperson or broker. Generally for those real estate activities, the person performing those functions needs to be licensed.
You generally can obtain more information about licensing rules and regulations by going to the website for the governmental agency that regulates real estate brokers and salesperson licenses. In your case that agency would be the District of Columbia Real Estate Commission and you can get more information at http://www.vue.com/dc/realestate/
The same rules generally hold true for seller financing in real estate transactions. If you plan on financing any portion of the purchase price your buyer might need, you probably don’t need a mortgage license for those actions.
Recently, however, there have been certain state laws passed that may restrict your ability to give a buyer seller financing if you are dealing with a residential transaction. So if you plan on selling a single family home or other residential property, certain jurisdictions may require additional documentation from you for review for various purposes.
Some states are trying to avoid issues that deal with predatory lenders and to do that they have restricted private mortgages. Recently, the State of Illinois passed a law that prevented any private mortgages to be recorded in the counties in and around Chicago due to gap in the anti-predatory lending law that had been passed. Until they fixed the law, no private mortgages could be recorded during that time.
Certain anti-predatory lending laws require first-time buyers to get mortgage counseling to go along with their home purchase. In other instances, if a loan is deemed predatory, that loan may not be allowed by the state. (There are strict state guidelines on what constitutes a predatory loan.)
While you may not be impacted by an anti-predatory lending law in Washington DC, there may be other local laws or rules that regulate seller financing that you should keep in mind.
Back to your original question: No, you don’t need to hire a real estate agent to you’re your home. But you’d be foolish to do it alone without any professional assistance. Talk to a real estate attorney to assist you in the sale and any financing arrangements you might make with your potential purchaser before you sign on the dotted line.