In 2024 the Oregon Legislature passed HB 4058 creating a regulatory regime for real estate wholesalers. Wholesalers are individuals who enter a contract to purchase a property and then market the property to an end-buyer. The wholesaler profits off the difference between the price that they agreed to pay for the property and the price that the end-buyer pays for the property. The law applies to residential property wholesaling.
Under HB 4058 wholesalers must register with OREA, undergo a background check and pay a registration fee. Then they must provide a disclosure to the seller of the property, the end-buyer of the property, to any real estate agent involved in the transaction, and in all advertising related to the property. Sellers who enter a contract to sell their property to a wholesaler have 3 business days after receiving the required disclosure to cancel the contract should they change their mind. Failure to register as a wholesaler or provide disclosure can lead to fines and penalties by OREA, loss of the wholesalers’ earnest money, and liability for any damages that result to the seller or end-buyer should the transaction terminate.
The law includes some exceptions to the definition of wholesaling. For example, a person who has had a contract to purchase a property for 90 or more days is not engaged in wholesaling if they market the property to an end-buyer. The same is true for a person who has invested $10,000 or more to improve the property. These exceptions are meant to distinguish wholesalers from developers.
Real estate licensees who engage in real property wholesaling do not need to separately register as wholesalers, but must provide a disclosure developed by the Oregon Real Estate Agency. This is in addition to disclosure requirements that already exist in law and rule when real estate licensees are a principal to a transaction. Check out this page from OREA describing the specific disclosure requirements for real estate licensees engaged in wholesaling, which includes a link to the required disclosure document.
All real estate professionals should become familiar with the details of this new law and how it may impact them and their clients. We recommend this excellent description of the new requirements provided by OREA in the December 2024 OREN-J, which includes links at the bottom to the text of both the statute and the administrative rules.