Predatory Real Estate Wholesaler Prohibition Act Effective November 1st, 2021
On November 1, 2021, the Predatory Real Estate Wholesaler Act will officially go into effect in Oklahoma, requiring real estate wholesalers to obtain a real estate license and abide by Oklahoma laws designed to promote consumer protection and ethical practices. The practice of real estate wholesaling occurs when an individual enters into a real estate purchase contract with a homeowner and subsequently markets and sells an assignment of that contract to a third party for a profit.
Over the past few years, wholesaling has generated complaints about misleading sales tactics, predatory contracts and clouding title to properties. Further, many Oklahomans who agree to sell their homes to a wholesaler are upset when they learn that the person or entity who offered to purchase their home is actually assigning the purchase contract to a third party for a profit instead of purchasing it themselves.
The Oklahoma Real Estate Commission received numerous calls and complaints from the public and from our licensed professionals related to the practice of wholesaling. With an increasingly seller-friendly real estate market, the practice of wholesaling has become more prevalent, and thus its associated problems.
Oklahoma is one of the first states to take action to address the issues created by this growing trend. Oklahoma's common sense approach of requiring wholesalers to obtain a license and abide by the same laws and regulations as other real estate professionals will help increase accountability and protection for the public. While the barrier to obtain a real estate license is fairly low, the benefits that licensure requirements provide for the public are substantial. Oklahomans can rest assured that a real estate license holder has passed a felony background check and a real estate examination that is administered nationally to all real estate sales associates and brokers.
After obtaining a real estate license, wholesalers will now be required to comply with the Oklahoma Real Estate License Code and Administrative Rules, which mandate a number of common sense duties and responsibilities that cannot be waived. The Predatory Real Estate Wholesaler Act reflects a simple truth – that real estate professionals often gain unique access to our homes and help represent Oklahomans in some of the largest financial transactions they will ever make. As such, it's important to make sure the real estate industry in Oklahoma operates ethically to protect citizens, as well as the role and reputation of our professionals.
Over the course of this fall season, the Commission will be working with a diverse group of real estate stakeholders and professionals to review, discuss and promulgate new administrative rules to address the practice of wholesaling. We strongly encourage any unlicensed individuals or entities engaged in wholesaling to apply for a real estate license as soon as possible.