Why Investors Are Struggling with Virtual Wholesaling?

Virtual wholesaling used to be a low-barrier entry to real estate investing. The technical advantage allows you to build a scalable business. Without a physical office, you can find motivated seller leads online, assign the contract without ever stepping into the property, and earn your assignment fee.

Legislations passed a few months ago could shake this whole wholesaling industry, including virtual wholesaling. In this article, we will discuss virtual wholesaling:

• Is it real, legal, and viable given current changes in the legislation?
• Do you need a license for virtual wholesaling?
• Is it legal to advertise a wholesale deal? If not, how can you do it?

HB 1081—Washington

HB 1081 will go into effect starting January 1, 2026, in Washington. The new policy applies to off-market and direct-to-seller properties. It applies to retail buyers, buy-and-hold investors, flippers, and wholesalers. It is applicable to all forms of marketing: search engine optimization, social media, direct mail, or knocking on the door. Here is exactly what the law says:

• The seller has the right to get an appraisal by the appraiser of their choice. The homeowner can request the appraisal within 3 days of executing the sales agreement, and the buyer must pay for the appraisal.

• The seller can use the appraisal results to cancel the sales agreement within 4 days without any penalty.

• These clauses must be present in the original sales agreement, and the seller must acknowledge that in writing.

• The seller can notify you by mail, email, or telegram if they are exercising their right to cancel the deal. The new legislation passed in Washington hurts the wholesaling industry. You must pay the out-of-pocket appraisal fee without any guarantee of closing the deal. The law doesn’t apply to buyers and sellers represented by licensed agents.

• The only way to get around this hurdle is to get a real estate license.

HB 7287—Connecticut

This new law will go into effect on July 1, 2026. According to HB 7287, all wholesalers must register with the DCP (Department of Consumer Protection) to protect consumers. Your wholesaling contracts must allow a cancellation window of 3 days. The seller can cancel the agreement within this timeframe. To be on the safe side, structure agreements with clear deadlines for assignments and closings to avoid legal risk.

HB 124—Maryland

In Maryland, a recent law has been passed that went into effect on October 1, 2025. HB 124 and SB 160 require a transparent approach to wholesaling in Maryland whenever a residential property of less than 4 units is involved:

• You must disclose your intention to assign the contract to a 3rd party.

• Have a written, clear disclosure clause for the end buyer mentioning that you are assigning the contract and may not be able to convey the title.

• The seller can cancel the contract anytime before closing if required disclosures are not provided. The assignee can also back out of the contract if the disclosure clause is missing.

HB 1125—North Dakota

The bill (HB 1125) in North Dakota went into effect on August 1, 2025. According to this new law:

• A wholesaler must disclose to all parties that they hold an equitable interest in the property and may not be able to convey the title.

• The seller can cancel the contract and retain the earnest deposit if the law is violated.

SB 1075—Oklahoma

The state of Oklahoma has strict regulations for wholesalers. The law (SB 1075) will go into effect on November 1, 2025.

• The definition of a wholesaler in Oklahoma is anyone who contracts the property for financial gain without the intention of occupying the place.

• The law gives homeowners 2 days to cancel the sale without any reason.

• You should provide appropriate disclosure to all parties of your intention to assign the contract.

• The contract is considered null and void if proper disclosure clauses are not included in the agreement.

SB 909—Tennessee (Effective March 25, 2025)

Tennessee is one of those strict states regarding wholesaling. Wholesalers in Tennessee must create acquisition contracts with the intention to assign and spell out their equitable interest to the buyer. The disclosure must appear in bold, large-font print within the agreement. A cause of action may be brought within two years after the contract’s execution if the disclosures are not made.

States Requiring Licensing for Multiple Transactions

States like Illinois, Pennsylvania, Kentucky, and even South Carolina require a license before you can wholesale a deal. In Illinois, you can do one deal per year without a license. Of course, that doesn’t help wholesalers who are doing 5–10 deals in a month.

In Pennsylvania (Act 52, formerly SB 1173), wholesalers are now classified under the broker or salesperson definition. That means you need a license and explicit disclosure about the nature of the transaction. You must also provide cancellation rights to sellers under certain conditions.

The state of South Carolina clearly defines wholesaling as a brokerage activity under HB 4754. Publicly marketing someone else’s real estate without owning it is considered brokering and requires a license.

How to Stay Compliant Regardless of Local Laws?

Virtual wholesalers are often operating in multiple markets. That means you need to adjust contract language and stay up-to-date regarding laws in various states. It also means that you could get a real estate license, but it’s not enough to cover your operation in various states.

Real estate wholesaling has become different. To be on the safe side, all marketing must be tied to the contract. It’s best not to advertise the property.

Always include comprehensive disclosure clauses in your contracts. They ensure transparency and protect you from legal complications down the road. Double closings work well in highly regulated states. They involve two separate transactions, which helps you avoid legal gray areas. Combined, these strategies can help you build a sustainable wholesaling business.

Is Wholesaling Legal in All 50 States?

Wholesaling is legal in all 50 states of America, as you are transferring your interest in a contract. But there are rules about licensing, disclosures, and marketing. That’s where things can go south if you don’t understand the laws.