New law against abusive wholesaling is a big win for Realtors and homeowners

Predatory wholesaling tactics that take unfair advantage of property owners have risen sharply in recent years, but a new state law championed by Realtors will have a huge impact on curbing such practices. Act 52 of 2024 — formerly Senate Bill 1173 — will require wholesalers to have real estate licenses, which means they will be required to follow rules that regulate licensees, and consumers can go to the state’s Real Estate Commission if they encounter problems.

"The state law will regulate third parties in real estate deals called 'wholesalers,' who sign agreements of sale with homeowners and then sell those agreements to someone else," according to a recent Inquirer article. "Wholesalers solicit homeowners with 'We Buy Houses' signs, as well as texts, calls, mailers, and visits, and then often use high-pressure tactics to get owners to sign contracts."

The Pennsylvania Association of Realtors made passage of this law a top priority, and dozens of Realtors advocated for its passage in meetings with legislators during PAR's Realtor Day on the Hill in June. “We’re big believers in information and transparency and educating the consumer, and Act 52 does that well,” said Bill Lublin, the incoming PAR president.

Under the new law, which takes effect on Jan. 9, 2025, wholesalers also must tell people that they are participating in a wholesale transaction and that they have a right to a property appraisal and legal counsel. The law also will make it easier for homeowners to back out of deals they sign with wholesalers if problems arise. Read more and watch for updates at the PAR website.