Senate Approves Stefano, Rothman Bill to Protect Homebuyers and Increase Transparency

HARRISBURG – To protect homebuyers, the Senate passed legislation sponsored by Sens. Pat Stefano (R-32) and Greg Rothman (R-34) that would require anyone who conducts residential wholesaling in Pennsylvania to obtain a real estate salesperson or broker 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.

“Other real estate transactions require the agent to have proper licensing, which safeguards all parties involved. Currently, buyers – who may not even know they’re in a wholesale transaction – don’t have those protections. Real estate is typically the biggest asset in a person’s life and Pennsylvanians deserve to have all relevant information rather than be tricked into a sale,” Stefano said.

Senate Bill 1173 would also ensure that consumers are made aware they are participating in a wholesale transaction by receiving proper disclosures and that they 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,” Rothman said. “Senate Bill 1173 would ensure that both homeowners and homebuyers are fully informed of their rights and are equipped to make well-educated decisions.”

The bill now heads to the House of Representatives for consideration.

CONTACT:    Amanda Cuteri, (Stefano’s office), 717-787-7175
                      Morgan Wagner, (Rothman’s office), 717-773-3266

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