Is Wholesaling Real Estate Legal In West Virginia? A 2024 Guide For Investors

Wholesaling real estate is a practical way to gain market experience and to build a buyers list of potential buyers or end buyers who are ready to buy the property that meets their investment objectives. Despite its potential, however, many aspiring investors find themselves asking the same question: Is wholesaling real estate legal in West Virginia?

To be clear, wholesaling is legal in West Virginia, but investors must adhere to strict guidelines and comply with local real estate laws. Wholesalers must understand the specifics of these regulations, including proper contract assignments and necessary disclosures. Ensuring compliance with these legal requirements is essential for conducting wholesaling activities legally and effectively within the state, and we'll tell you everything you need to know, starting with the following:

• What Is Real Estate Wholesaling?
• What Do You Need To Know About Wholesaling Houses In West Virginia?
• Is Wholesaling Real Estate Legal In West Virginia?
• What Are The Wholesaling Laws In West Virginia?
• Do You Need A License To Wholesale Real Estate In West Virginia?
• Final Thoughts

*Before we begin our guide on whether wholesaling real estate is legal in West Virginia, we invite you to view our video on How To Wholesale Real Estate Step by Step (IN 21 DAYS OR LESS)!

Host and CEO of Real Estate Skills, Alex Martinez, provides a comprehensive, step-by-step guide for beginners to start wholesaling real estate!

What Is Real Estate Wholesaling?

Real estate wholesaling is a strategy where an investor contracts a home with a seller and then sells the contract to another buyer for a profit. It's a quick way to make money in real estate without holding onto properties for a long time.

There are three primary strategies used in wholesaling: assigning contracts, double closing, and wholetailing. Each has its own uses depending on the situation, but the most popular—and the focus for today—is assigning contracts. This method is particularly appealing to those just starting to invest in real estate.

Assigning contracts involves the wholesaler agreeing to purchase a property and then transferring that agreement to an end buyer. Essentially, you find a property under market value, get it under contract, and then sell your rights to that contract to another buyer for a fee. The end buyer takes over the contract, closes the deal, and the property never actually goes into your name.

This strategy requires minimal capital upfront and can be executed quickly, making it an excellent starting point for new investors looking to break into the real estate market. Yet, despite its proliferation throughout the state, many people still ask the same question: Is wholesaling real estate legal in West Virginia?

What Do You Need To Know About Wholesaling Houses In West Virginia?

To successfully wholesale houses in West Virginia, it's crucial to understand both the legal landscape and market dynamics specific to the area. Starting with a solid grasp of local real estate laws and familiarizing yourself with the various wholesaling strategies—contract assignment, double closing, and wholetailing—is essential.

Wholesaling in West Virginia can be particularly advantageous right now due to favorable market conditions, according to data provided by RedFin. The median sales price has risen by 6.9% year over year, and the volume of homes sold has increased by 13.8%, indicating strong demand and appreciating property values. Additionally, the median days homes spend on the market has decreased by one day from last year, suggesting that properties are moving faster. With only two months of existing inventory, there is a limited supply, which can create opportunities for wholesalers to step in and bridge gaps between sellers and end buyers.

For those new to wholesaling, effectively applying these strategies requires a deep understanding of when and how to use each one to maximize profits and minimize risks. To further ensure success and compliance with state regulations, aspiring wholesalers should consider contacting West Virginia's real estate organizations for up-to-date information, resources, and guidance on navigating the local real estate market; it's the best way to answer the question, "Is wholesaling real estate legal in West Virginia?"

The following represents West Virginia’s larger professional organizations dedicated to the real estate profession. Each of these West Virginia associations is a member of the National Association of Realtors (NAR):

• The West Virginia Association of REALTORS (WVAR): The WVAR is a state-wide professional organization supporting property owners and real estate professionals. It offers various member benefits, including E&O insurance, a legal hotline, a political action committee, and a safety academy for licensed real estate agents.
• The Kanawha Valley Board of REALTORS (KWBR): Located in Charleston, the KWBR is the largest REALTOR board in the state, covering east and central West Virginia. The Kanawha Valley BOR is a trusted leader and real estate advocate in its communities.
• The Eastern Panhandle Board of REALTORS (EPBR): Incorporated in the late 1970s, the EPBR is West Virginia’s panhandle local real estate board. With progressive leadership, education, and accountability initiatives, it seeks to promote property rights and equal housing across the area.
• The Huntington Board of REALTORS (HBR): Founded in 1938, the HBR is a wealth of information and resources for property owners and real estate professionals. It offers guidance and advice to homeowners, consumers, and real estate agents licensed in the state or by reciprocity.
• The Greenbrier Valley Board of REALTORS (GVBR): The GVBR was established in the mid-1990s to unite and support real estate agents and professionals in and around Lewisburg. Through shared respect, the GVBR seeks to maintain the highest ethical standards for all members.

Established in 1937, the West Virginia Real Estate Commission (REC) is tasked with the responsibility of protecting property owners and the real estate market in the state. The commission’s power and duties are set forth in the provisions of this article - WV Code §30-40-7. The Real Estate Commission offers two types of real estate agent licenses for West Virginia residents who work in a registered real estate brokerage. A Real Estate Salesperson License and A Real Estate Broker license – which can be a broker or associate broker.

West Virginia also offers non-resident salesperson and non-resident broker’s license opportunities for those who hold a license in another jurisdiction. The licensing requirements of nonresidents are found in West Virginia code §30-40-15.

West Virginia is an Attorney-Close State

Because state law considers the closing processes of real estate transactions as the practice of law, all retail and wholesale real estate deals within the state must use a real estate attorney licensed by West Virginia’s state bar. This requirement will likely help guide investors to avoid legality issues and consequences.

Read Also: How To Wholesale Real Estate In West Virginia: Step-By-Step

Is Wholesaling Real Estate Legal In West Virginia?

Yes, wholesaling real estate is definitely legal in West Virginia. Let's talk about why that's the case, especially focusing on a method called contract assignment, which is a common strategy used in wholesaling.

Basically, in contract assignment, you, as the wholesaler, enter into an agreement to buy a property. Instead of completing the purchase yourself, you find someone else who wants to buy the property and you sell them your place in the agreement. Think of it like securing a spot in line and then selling your spot to someone else who wants it more—and for a higher price!

This is legal because when you sign that initial contract, you gain what’s called an equitable interest in the property. This isn't the same as owning it, but it gives you the right to buy it, which you can legally transfer to another buyer. It's all above board as long as your contract doesn't forbid assigning your place to someone else, and everyone involved knows and agrees to what's happening. It's a slick way to make a profit without ever holding the actual title to the property, ideal for those just getting started in real estate.

What Are The Wholesaling Laws In West Virginia?

The real estate laws that govern the actions of real estate licensees in West Virginia are found in West Virginia’s Real Estate License Act (WV Code § 30 – 40). The Real Estate License Act denotes that practicing real estate in West Virginia is “a privilege” that requires a license to protect the public interest.

The practice of real estate in West Virginia is defined in §30-40-4 (c) 1 – 3 and note, West Virginia law includes a single act as evidence of real estate practice, and thus, does not require a pattern of behavior which can be found in WV §30-40-23.

Exceptions To West Virginia’s License Law

According to provisions of this article - §30-40-5 (b), West Virginia’s license law does not include those activities that are typically performed by the following –

• Appraisers
• Mortgage Companies
• Lawyers
• Contractors, Surveyors
• Engineers
• Home Inspectors or any other professionals performing ancillary services supporting a real estate transaction.

In addition, the provisions of West Virginia’s Real Estate License Act (WV Code § 30 – 40) notes that the act does not apply to these individuals (See WV Code 30-40 –5, 1-8).

Potential Penalties For Violations Of West Virginia License Law

According to West Virginia Code 30-40-22, these are potential violations for individuals. Other potential violations follow in the same provision.

*For in-depth training on real estate investing, Real Estate Skills offers extensive courses to get you ready to make your first investment. Attend our FREE training and gain insider knowledge, expert strategies, and essential skills to make the most of every real estate opportunity that comes your way!

Do You Need A License To Wholesale Real Estate In West Virginia?

No, you do not need a real estate license to wholesale real estate in West Virginia. Real estate wholesalers may operate legally within the state if their actions and choices do not violate West Virginia’s real estate and license laws and they abide by local laws governing transactions. The key is to avoid these actions, which are defined as real estate services by West Virginia lawmakers. These actions are noted below (See §30-40-4 (c) 1 – 3):

(1) Lists, sells, purchases, exchanges, options, rents, manages, leases or auctions any interest in real estate; or

(2) Directs or assists in the procuring of a prospect calculated or intended to result in a real estate transaction; or

(3) Advertises or holds himself or herself out as engaged in, negotiates or attempts to negotiate, or offers to engage in any activity enumerated in subdivision (1) of this subsection.

Exiting The West Virginia Wholesale Deal

Wholesalers will find it best to be transparent about their intentions to everyone involved, allowing everyone to make well-informed decisions. This includes managing the expectations of the seller by smartly wording the contract to avoid ambiguities.

Remember, a real estate wholesaler in West Virginia CANNOT market or sell real property. They can, however, market or sell their ‘right to purchase real property’ as defined by the terms detailed in the contract of sale.

Because West Virginia law considers the closing processes of real estate transactions as the practice of law, all retail and wholesale deals within be performed by an attorney licensed by West Virginia’s state bar. Take advantage of this law and use the legal guidance offered by the licensed legal professional when managing the process of real estate wholesaling.

The Double Close

The most direct way to steer clear of legal issues as a real estate wholesaler in Mountain State is to complete the wholesale deal using a double closing. The double close ensures a wholesaler has an interest in the property and, thus, does not need a West Virginia real estate license to complete the deal.

As the ‘double closing’ name suggests, a wholesaler completes two closing –typically back-to-back. The real estate wholesaler is the buyer in the first closing. However, in the second closing, the real estate wholesaler becomes the seller.

The difference between each sale’s price would be considered the investor’s assignment fee. But note, although certainly the most cautious of exit routes, a double close has double closing costs. Some investors believe this is money well spent when one considers the amount of protection a double closing offers.

Read Also: The Pros & Cons Of Wholesaling Real Estate: An Investor's Guide

Final Thoughts

So, to address the burning question: "Is wholesaling real estate legal in West Virginia?" Yes, it certainly is, especially through the strategy of contract assignment. This approach allows you to legally transfer your purchasing rights to another buyer, making it an excellent entry point for those new to real estate investing. Now that you understand the legal landscape, it's an opportune time to leverage these insights.

With your newfound knowledge that wholesaling is indeed legal in West Virginia, why not jump right in? The current market offers ample opportunities, and to help you navigate and capitalize on these, consider attending Real Estate Skills' free training program. It's tailored to equip you with the necessary skills and insights to thrive in the West Virginia real estate market.

*Disclosure: Real Estate Skills is not a law firm, and the information contained here does not constitute legal advice. You should consult with an attorney before making any legal conclusions. The information presented here is educational in nature. All investments involve risks ,and the past performance of an investment, industry, sector, and/or market does not guarantee future returns or results. Investors are responsible for any investment decision they make. Such decisions should be based on an evaluation of their financial situation, investment objectives, risk tolerance, and liquidity needs