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House committee considers bill to require disclosure by real-estate wholesalers
Summary
Representative Josh Williams and a joint sponsor presented House Bill 287 to require real-estate wholesalers to disclose their intent to assign contracts and to provide remedies including returning earnest money to the record owner within 30 days if disclosures are violated; committee members pressed on proving intent and scope of the bill.
Representative Josh Williams opened sponsor testimony for House Bill 287, saying an increase in corporate purchases and a proliferation of real-estate wholesaling "has made it increasingly difficult for young families to find and purchase homes in our state." Williams said wholesalers often enter contracts without intent to take title and then assign those contracts to third-party investors, which can strip equity from homeowners.
The bill's joint sponsor (introduced in testimony as Representative John) told the committee wholesalers can use aggressive and misleading tactics, including advertising and targeted outreach to homeowners in financial distress, and that state regulators often lack authority to act. The substitute discussed in testimony would require wholesalers to disclose to both the homeowner and the end buyer that they are a wholesaler buying a property "solely to make a profit," and would allow a record owner who cancels a contract because of nondisclosure to have any earnest money disbursed to the record owner by the escrow or closing agent within 30 days.
Members pressed sponsors on a range of concerns: Representative Demetrio asked whether the bill would disrupt ordinary assignments in real-estate practice and how a seller could be disadvantaged if a buyer later assigns a contract; sponsors replied the bill is narrowly written to define "wholesaler" as someone entering with the intent to collect a fee or commission and explicitly excludes assignments to a parent, affiliate or common-control entity. Members also questioned how to prove intent in court; sponsors said the disclosure requirement alters the closing-table dynamic and that remedies would be governed by existing contract law, including disputes over earnest money.
Committee members discussed the prevalence of out-of-state wholesalers, online recruitment (YouTube, TikTok) and advertising ("we buy houses/for cash") that can target elderly or grieving homeowners. Sponsors emphasized the bill does not outlaw assignment but requires transparency so homeowners can make informed decisions. The committee concluded the first hearing on HB287 after substantive back-and-forth; no roll-call votes were recorded on the bill during the session.
