What Is Real Estate Wholesaling?
Real estate wholesaling is when a person agrees to buy a house (or other real estate property) but doesn’t actually plan to keep it. Instead, they find someone else to buy it before the deal is done. This way, the first person—called a wholesaler—can make money without ever owning the house.
Sometimes, the wholesaler’s contract lets them put the house up for sale, show it to other people, or even make small changes to it before the first sale is finished. The original homeowner might not always realize this if the contract isn’t clear.
Wholesalers usually look for properties that need fixing up. They might tell the seller they can pay in “cash” and close the deal quickly, but sometimes those promises don’t come true.
Right now, wholesalers don’t need a special license, but if they have a real estate license, they must tell the seller.
Why This Can Be a Problem
If the contract is confusing, the wholesaler hides their license, or the “fast” sale never happens, the seller can lose time and maybe even money.
How to Stay Safe
- Read the contract carefully before signing.
- Ask a lawyer to check it for wording that allows wholesaling.
New Law in Connecticut
Starting July 1, 2026, all wholesalers in Connecticut will have to sign up with the Department of Consumer Protection (DCP) to help protect homeowners.
Real Estate Wholesaling Frequently Asked Questions (FAQ) What is the purpose of the Wholesaler registration? By having a formal credential, we can ensure that everyone in the business is following the rules, and we can take enforcement actions when there are infractions. Why is it important to check that a wholesale is properly registered? Anyone selling their home can check our website to ensure that a wholesaler has an active registration, and can report any infractions to our agency for investigation - including wholesaling without a registration. Are there any exceptions to the requirement to hold a Wholesaling registration in order to engage in wholesaling? No, any business or individual engaging in wholesaling must first hold an active registration with DCP. Can a seller cancel the wholesaling contract? Yes, a seller can cancel the contract for any/no reason within three (3) business days without penalty. Must a licensed Real Estate Broker/Salesperson hold a Wholesaling registration in order to engage in wholesaling? Yes, while a person may hold both licenses, one does not eliminate the requirement for the other. How long can a wholesaling contract engage the seller? The original contract must identify a closing date that is no more than ninety (90) days after the contract date. The contract may only be extended by mutual written agreement. What must the wholesaler provide to a third party considering purchasing the property? The wholesaler must identify themselves as a registered wholesaler who does not hold title to the property, as well as the residential condition report provided by the seller. What must the wholesaler provide to the seller? Prior to executing the wholesale contract, the wholesaler must provide the seller with the wholesale disclosure report, as specified by DCP. Can a wholesaler put a lien on a property under a wholesale contract? No lien or encumbrance may be placed on a property under a wholesale contract. Any such notice filed shall be deemed not to have legal authority. What are the repercussions of violating any of the laws related to wholesaling? Any violation of the related laws shall be deemed an unfair or deceptive trade practice, and enforceable under the Connecticut Unfair Trade Practices Act.