HARRISBURG – Legislation sponsored by Sens. Pat Stefano (R-32) and Greg Rothman (R-34) to protect homebuyers is set to be signed into law. Senate Bill 1173 would require anyone who conducts residential wholesaling in Pennsylvania to obtain a real estate salesperson license under the Real Estate Licensing and Registration Act.
“Residential wholesaling” is when the wholesaler, who acts as an intermediary between the seller and buyer, enters into a purchase contract from a seller and then flips the contract to a buyer without the seller’s knowledge or consent. Typically, wholesalers look for properties that are distressed with an owner who wants to sell quickly without making updates or repairs. The trade often happens at a price significantly below fair market value, where the wholesaler stands to make substantial profits.
“I appreciate the swift action the House of Representatives took to pass our bill giving homebuyers 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 – so I look forward to the governor signing it into law soon,” Stefano said.
The legislation would also provide consumers with disclosures making them aware they’re participating in a wholesale transaction. Additionally, the disclosures would explain that buyers have the right to seek an appraisal and cancel the contract.
“Residential wholesaling of real estate has become prevalent in recent years, often at the expense of the most vulnerable,” said Rothman. “Enactment of this legislation will ensure that both homeowners and homebuyers are fully informed of their rights and are equipped to make well-educated decisions.”
The bill will be sent to the governor for enactment.
CONTACT: Amanda Cuteri, (Stefano’s office), 717-787-7175
Morgan Wagner, (Rothman’s office), 717-773-3266