Pennsylvania Enacts New Legislation on Residential Wholesaling

News provided by

Pennsylvania Association of Realtors

Jul 10, 2024, 11:53 ET

LEMOYNE, Pa., July 10, 2024 /PRNewswire/ -- The Pennsylvania Association of Realtors^® applauds the Pennsylvania General Assembly and Gov. Josh Shapiro for passing a new law aimed at protecting home sellers and buyers in residential wholesaling transactions.

Senate Bill 1173 (Stefano, R-Fayette; Rothman, R-Cumberland) amends the Real Estate Licensing and Registration Act to define a residential wholesale transaction, requires anyone who conducts residential wholesaling to have a real estate license and ensures consumers are made aware that they are engaging in a wholesale transaction. Shapiro signed the bill into law on July 8, making it Act 52 of 2024.

"This legislation brings much needed uniformity to residential wholesaling, which occurs throughout Pennsylvania," said PAR Incoming President Bill Lublin. "It will provide protection for consumers by requiring they receive proper disclosures, ensuring transparency throughout the transaction and giving them recourse if they encounter a problem."

Residential wholesaling involves the practice of transferring property between buyer and seller through a third party, equitable interest. Typically, a wholesaler approaches a homeowner and signs a contract for sale. The wholesaler then goes out and markets their equitable interest in the purchase contract to another buyer, sometimes for a significantly larger profit than the original purchase price with the property owner.

Act 52 will ensure that all parties involved in wholesale transactions have a knowledge and understanding of the transaction they are party to.

"The swift action on this legislation will now give homebuyers and sellers critical information about what is often one of the biggest purchases of their lives. Greater transparency will offer safeguards for all parties – something we can all support," said Sen. Pat Stefano.

Wholesalers often maximize their profits by targeting seniors and people who are unaware of their home's true value. A wholesaler enters into the purchase of a property, never intending to own or take title of the property. The new law will provide recourse for consumers who believe they may have been harmed to address the wrongdoing that occurred.

"Residential wholesaling of real estate has become prevalent in recent years, often at the expense of the most vulnerable," Sen. Greg Rothman said. "Senate Bill 1173 would ensure that both homeowners and homebuyers are fully informed of their rights and are equipped to make well-educated decisions."

Act 52 will take effect in 180 days.

The Pennsylvania Association of Realtors^® is a trade/professional association that serves more than 39,000 members in the commonwealth of Pennsylvania.

SOURCE Pennsylvania Association of Realtors