Missouri Added A Bill For Wholesaling....
Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes
Missouri Added A Bill For Wholesaling....
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votesQuote from @Caleb Brown:
Yeah that is a long time. I think it's to avoid multiple wholesalers locking up a property. I wouldn't be surprised if there is some changes as this goes into practice
my bet is 90% of wholesalers will ignore it and just continue doing the things they always have until they get caught.. maybe the big ones like a we buy ugly homes franchise will honor it but the legion of small time wholesalers dont think will follow this unless taken to the mat
6 Replies
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes2mo
Quote from @Caleb Brown:
Missouri just changed the rules for residential wholesaling. Governor signed so now it'll be put in practice. If you wholesale residential properties in Missouri you need to be aware of this.
Starting August 28, wholesalers (who fall under the requirements) will be required to provide a separate written disclosure at least 14 days before a purchase contract is signed.
The disclosure lets the seller know:
- The buyer is acting as a wholesaler.
- The contract may be assigned to another buyer for a profit.
- The wholesaler may never actually take title to the property.
- The agreed purchase price could be below market value.
There is more nuances in the bill so I would read it over and be compliant. The goal with the bill is transparency. During the busy 2020-2023 we saw a influx of wholesalers. This meant there was new people who didn't disclose or weren't transparent with owners.
I am not against wholesalers but I do think transparency is key. Homeowners need to understand what they are walking into and who the end buyer is. Whether you agree with the law or not, it's important to understand how it affects you if you're investing in Missouri.
What's your thoughts?Your Comment: "separate written disclosure at least 14 days before a purchase contract is signed."
That's a new one.
I agree with the idea of written disclosures though. That makes sense.
But how does 14 days before getting a contract, work in reality? You can't promote or sell something you don't have a right to sell. Sellers are busy people too and they need to sell quickly because of medical concerns, because they took a job in another city concerns, because of an ill parent in another city and gotta move concerns, because of needing to avoid a stalker concerns, because of foreclosure concerns, and a myriad of of other legitimate concerns.
I think it would make more sense to have a 14 day "cooling off period", where the contract can be cancelled for any reason after the contract is signed, for 14 days. That puts the risk on the wholesaler without hamstringing the seller.- Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes2mo
Yeah that is a long time. I think it's to avoid multiple wholesalers locking up a property. I wouldn't be surprised if there is some changes as this goes into practice
- 2moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Caleb Brown:
Yeah that is a long time. I think it's to avoid multiple wholesalers locking up a property. I wouldn't be surprised if there is some changes as this goes into practice
my bet is 90% of wholesalers will ignore it and just continue doing the things they always have until they get caught.. maybe the big ones like a we buy ugly homes franchise will honor it but the legion of small time wholesalers dont think will follow this unless taken to the mat - Real Estate Agent · Kansas City · Member since 2018 · 4k+ posts · 3k+ votes2mo
Quote from @Jay Hinrichs:
Quote from @Caleb Brown:
Yeah that is a long time. I think it's to avoid multiple wholesalers locking up a property. I wouldn't be surprised if there is some changes as this goes into practice
my bet is 90% of wholesalers will ignore it and just continue doing the things they always have until they get caught.. maybe the big ones like a we buy ugly homes franchise will honor it but the legion of small time wholesalers dont think will follow this unless taken to the matAgreed, curious what the consequences are for ignoring. I'd assume you'd have to report for anything to happen
- 2moDon KonipolBusiness MemberInvestor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votesI agree with you Ken, the 14 days kills the quick deal which of course hurts the consumer the bill is supposed to protect. So another words just another government consumer protection law which ultimately hurts consumers. No surprise there.
Quote from @Ken M.:
Quote from @Caleb Brown:
Missouri just changed the rules for residential wholesaling. Governor signed so now it'll be put in practice. If you wholesale residential properties in Missouri you need to be aware of this.
Starting August 28, wholesalers (who fall under the requirements) will be required to provide a separate written disclosure at least 14 days before a purchase contract is signed.
The disclosure lets the seller know:
- The buyer is acting as a wholesaler.
- The contract may be assigned to another buyer for a profit.
- The wholesaler may never actually take title to the property.
- The agreed purchase price could be below market value.
There is more nuances in the bill so I would read it over and be compliant. The goal with the bill is transparency. During the busy 2020-2023 we saw a influx of wholesalers. This meant there was new people who didn't disclose or weren't transparent with owners.
I am not against wholesalers but I do think transparency is key. Homeowners need to understand what they are walking into and who the end buyer is. Whether you agree with the law or not, it's important to understand how it affects you if you're investing in Missouri.
What's your thoughts?Your Comment: "separate written disclosure at least 14 days before a purchase contract is signed."
That's a new one.
I agree with the idea of written disclosures though. That makes sense.
But how does 14 days before getting a contract, work in reality? You can't promote or sell something you don't have a right to sell. Sellers are busy people too and they need to sell quickly because of medical concerns, because they took a job in another city concerns, because of an ill parent in another city and gotta move concerns, because of needing to avoid a stalker concerns, because of foreclosure concerns, and a myriad of of other legitimate concerns.
I think it would make more sense to have a 14 day "cooling off period", where the contract can be cancelled for any reason after the contract is signed, for 14 days. That puts the risk on the wholesaler without hamstringing the seller. - 2moJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Don Konipol:
I agree with you Ken, the 14 days kills the quick deal which of course hurts the consumer the bill is supposed to protect. So another words just another government consumer protection law which ultimately hurts consumers. No surprise there.Quote from @Ken M.:
Quote from @Caleb Brown:
Missouri just changed the rules for residential wholesaling. Governor signed so now it'll be put in practice. If you wholesale residential properties in Missouri you need to be aware of this.
Starting August 28, wholesalers (who fall under the requirements) will be required to provide a separate written disclosure at least 14 days before a purchase contract is signed.
The disclosure lets the seller know:
- The buyer is acting as a wholesaler.
- The contract may be assigned to another buyer for a profit.
- The wholesaler may never actually take title to the property.
- The agreed purchase price could be below market value.
There is more nuances in the bill so I would read it over and be compliant. The goal with the bill is transparency. During the busy 2020-2023 we saw a influx of wholesalers. This meant there was new people who didn't disclose or weren't transparent with owners.
I am not against wholesalers but I do think transparency is key. Homeowners need to understand what they are walking into and who the end buyer is. Whether you agree with the law or not, it's important to understand how it affects you if you're investing in Missouri.
What's your thoughts?Your Comment: "separate written disclosure at least 14 days before a purchase contract is signed."
That's a new one.
I agree with the idea of written disclosures though. That makes sense.
But how does 14 days before getting a contract, work in reality? You can't promote or sell something you don't have a right to sell. Sellers are busy people too and they need to sell quickly because of medical concerns, because they took a job in another city concerns, because of an ill parent in another city and gotta move concerns, because of needing to avoid a stalker concerns, because of foreclosure concerns, and a myriad of of other legitimate concerns.
I think it would make more sense to have a 14 day "cooling off period", where the contract can be cancelled for any reason after the contract is signed, for 14 days. That puts the risk on the wholesaler without hamstringing the seller.
when I started selling RE in CA vacant land in subdivions developer had to have a PUBLIC report that you provided to the buyer it was like a PPM disclosure doc however it also came with a 14 day right of recession for any reason.. this protected the public and as long as your were square with your clients I dont think I had any of my buyers invoke it. So maybe thats what they need is a right of recession.. let the deal close but you can unwind if the public feels they were cheated
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