Oklahoma’s proposed legislation HB3104 the “Predatory Real Estate Wholesaler Prohibition Act”
Oklahoma state representatives have proposed legislation to help protect homeowners from predatory practices. On February 25th, HB3104 known as the“Predatory Real Estate Wholesaler Prohibition Act” passed the initial house subcommittee unanimously by a vote of 7-0, and will now move on to the House floor to be voted on by the full House at a later date to be announced.
Being full-time Real Estate Investors in Oklahoma, who buy houses fast in Tulsa and statewide, and who occasionally assign a contract aka “flip” to other investor friends, whenever the deal doesn’t fit our portfolio, it was almost inevitable the laws would eventually be changed due to those parties who do operate unethically.
I’m not calling wholesaling unethical or illegal, but the way many unethical people do it is shady.
What most people call Wholesaling, aka “assigning”, is getting out of control nationwide. There’s way too many gurus making their money teaching people to use “weasel clauses” and “shady tactics” to basically broker real estate without a license, when they have absolutely no “intent or ability to close”. Their sole intent is to find an end buyer before the closing date, or they just walk away, never even trying to secure funding themselves. Many times, leaving homeowners in a much worse position. It’s extremely unethical, and also gives all of us who are legitimate investors a bad reputation.
There are legitimate legal reasons to cancel a contract, such as discovering additional repair needs during an inspection period, or funding being unapproved, etc. as long as its legitimate and is allowed within the contract. But “not being able to find an end buyer”, is not a legitimate, ethical, or legal reason to not perform on a contract. And if the contract states the purchase price is to be “cash”, funding isn’t really a legitimate reason either.
We’ve purchased multiple properties from homeowners who had previously been under contract with wholesalers who claimed to be investors but failed to perform.
There’s “virtual wholesalers” from out-of-state, who are some of the worst about doing these bad practices. They never even go to the property, and base their numbers off inflated estimates. They hide behind fake temporary phone numbers, email accounts, and never meet with homeowners.
Then you have all the so-called “daisy-chainers” who don’t even have the property under contract. They’re marketing other people’s deals, at even higher prices. We’ve had some of these idiots actually send us info on properties we already owned and had listed for sale online…😡
Conclusion…This will be a GOOD thing!!
IMO, it’s unfortunate, but the law probably needs to happen to protect homeowners from all the shady people out there, and it will be a good thing in the long run for those operating ethically like we do at 4Lease4Sale.com
That’s my 2 cents! 😉