Wholesaling Real Estate Legal Connecticut

Is Wholesaling Real Estate Legal In Connecticut?

legal wholesale real estate wholesaling real estate Sep 07, 2021

Real estate wholesaling has recently experienced overwhelming increases in popularity as an investing technique, which resembles the method for flipping houses, but without the money typically required to complete the wholesale deal. With its rise in recognition, critics have begun to voice their objections – asserting that a real estate wholesaler is somehow circumventing license law and acting like a real estate salesperson or broker but doing so as an unlicensed professional.

The reality is basic wholesaling principles are evident in every market sector - in supermarkets, banking, and the neighborhood kid’s lemonade stand – as it is simply the principle of investing for value with the intent to sell for a profit. These decriers fail to recognize the fact that a wholesaler of a real estate investment property is not selling real estate but their beneficial interest as a legitimate purchaser of real property detailed in a contract of a real estate transaction.

Wholesaling deals in real estate typically begin with an investor purchasing real property from a motivated seller – often at a price below market value. With an accepted offer and the provision of an earnest money deposit, a buyer and seller mutually agree to execute a contract of sale (or a purchase agreement). This document legally re-defines the property’s ownership and rights for both parties to the contract. The legal concept related to this re-defined ownership is known as the Principle of Equitable Conversion (or Equitable Interest or Equitable Title), which primarily refers to someone’s financial interest in real property –

Connecticut wholesaling equitable interest


Real estate wholesalers offer distressed or motivated homeowners a viable alternative to a traditional sale, offering an expedited exit route that most traditional buyers cannot. Essentially, as a flipper or middleman, the wholesaler meets a genuine need in the real estate marketplace with a quick closing route.

In the current real estate market, wholesale properties and opportunities are typically available on the multiple listing service, online (think Zillow or Redfin), REOs, an estate liquidation, divorce, bankruptcy, or foreclosures, to name a few.

Many investors use a wholesale deal to gain practical experience and meet other professionals. They use each transaction to build a buyers list of cash buyers or end buyers who are ready to strike when the right deal comes along.

“The future depends on what you do today.” – Mahatma Ghandi


What Do You Need To Know About Wholesaling Houses In Connecticut?

The state of Connecticut, with an official nickname of the Constitution State, is the most southern state in the northeastern section of the United States known as New England.

Connecticut real estate map


However, Connecticut is also a part of the large tri-state New York metropolitan area that also includes New Jersey. Connecticut’s name is derived from the Native American – Quinnehtukqut – which translates to “beside a long tidal river.”

Connecticut entered the union as the fifth state in 1788. The state’s 5,567 square miles is home to the highest per capita income and the highest median household income in the US. The population of Connecticut is –

Connecticut real estate population

Connecticut is home to the Thames River and the Connecticut River, with ports populating Connecticut’s southern boundary that meets the northern shores of the Long Island Sound.

Connecticut’s five largest cities include –


Hartford, the capital of Connecticut, is also known as the insurance capital of the United States. Hartford is among the largest cities, only smaller than New Haven (home of Yale University), Stamford (home to the largest financial district outside of New York City), and Bridgeport (a historic seaport and home to the state’s only zoo).

These are the larger trade and professional organizations in the state dedicated to the real estate profession. Each of these associations is a member of the National Association of REALTORS (NAR) –

As the largest professional trade organization in the state, the CAR has more than 16,900 members and is affiliated with sixteen other real estate associations and/or local boards. The Connecticut Association of REALTORS’s mission is to advocate for homeownership in the state and make Connecticut a better place to live/play/work.

The GBBR was established in the early 1920s as a real estate professional organization that serves the Connecticut towns of Bridgeport, Shelton, Stratford, Easton, Trumbull, and Monroe. The Greater Bridgeport Board of REALTORS provides a variety of benefits to its members that include educational offerings, an MLS service, professional standards, and service centers.

With nearly 5,000 members, the GHAR serves real estate owners and professionals in the Greater Hartford & Litchfield County communities. The Greater Hartford Association of REALTORS facilitates the processes required to help GHAR members capitalize on the most current industry knowledge, networks, and education.

The ECAR serves the most eastern portion of Connecticut, offering services to more than 1,000 members and seeking to promote the highest standards of conduct. Additionally, the Eastern Connecticut Association of REALTORS also aims to further property ownership interests in the eastern 1/3 of Connecticut.

Established in 1919, the Stamford Board of REALTORS provides resources and professional support to the industry and its members. The SBOR seeks to be the advocacy and voice of the greater Stamford communities.

Connecticut Real Estate Commission wholesaling

The Connecticut Real Estate Commission (CREM), housed within the Connecticut State Department of Consumer Protection, is tasked with these responsibilities and provided with these authorizations –

Connecticut real estate commission


Connecticut License Reciprocity

The practice of license reciprocity (also known as Mutual Recognition) permits active licensees from one jurisdiction to practice in another, subject to the second jurisdictions’ license law requirements. This recognition is often encouraged because it is mutually advantageous to both jurisdictions and licensees.

Connecticut and thirteen states share Mutual Recognition Agreements regarding license reciprocity of real estate professionals.  Note, though, that part of most reciprocity applications requires a Certificate of License History from the licensee’s domain jurisdiction.

The following states (with links to each state board) have reciprocity agreements with Connecticut –










New York



Rhode Island




Real estate activities in Connecticut are administered and enforced by the state’s Real Estate Laws & Regulations - Concerning the Conduct of Appraisers, Brokers & Salespersons – Section 20-311, Section 20-314, 20-328, and 20-329, plus of a host of related rules in the state.

Effective 10/1/2019 - Connecticut Became an Attorney Close State

Connecticut Senate Bill 320 (Public Act No. 19-88) has codified legislation that mandates Connecticut licensed attorneys to conduct real estate closings for properties within the state’s jurisdiction. This recent law applies to most home loans that require title insurance to close – except a HELOC (Home Equity Line of Credit).

This should be viewed as a benefit as it allows potential legal issues to be discussed (and hopefully mitigated) through the legal advice the wholesaler’s real estate attorney can provide.


Is Wholesaling Real Estate Legal In Connecticut?

Yes, real estate wholesalers can legally work in Connecticut if they do not violate the state’s real estate and license laws.

The key to wholesaling real estate in Connecticut is to ensure that wholesalers understand the legality of their actions and not perform any actions requiring a state license. [See next section – What Are The Wholesaling Laws in Connecticut]

Primarily, a real estate wholesaler must ensure they sell their equitable interest or their ‘right to purchase’ rather than the property itself because selling real property requires a real estate license in Connecticut.

Be Certain The Real Estate Contracts Allow For Assignments

It is important to note that not every contract is assignable. Assignability is the legal mechanism real estate wholesalers use to sell their rights and interests in a purchase agreement to another buyer. The difference between the two homes’ sales prices determines the assignment fee or the wholesaler’s revenue from the transaction.

Each Connecticut county has the ability to use slightly different purchase agreements, which may be further edited & revised by an attorney or real estate agent. To be safe, take a cautious approach to make sure the contract of sale clearly delineates your intentions and interests as someone with an equitable interest – a right that allows a wholesaler to assign a contract at their sole discretion. Never assume a silent contract (with no written provision regarding assignability) means the contract’s assignability is clear and present.

Download FREE Investor-Friendly Real Estate Contracts Here (PDF)


What Are The Wholesaling Laws In Connecticut? 

Real estate brokerage and licensee activities in Connecticut are administered and enforced by the state’s Real Estate Laws & Regulations Concerning the Conduct of Appraisers, Brokers & Salespersons – Section 20-311, Section 20-314, 20-328, and 20-329, plus a host of related rules in the state.

wholesaling laws Connecticut

To wholesale real estate legally in the Nutmeg State of Connecticut, you must possess a complete understanding of what you can & cannot do within its real estate market. Staying within Connecticut’s defined legal boundaries makes real estate wholesaling legal and profitable to real estate wholesalers. It begins by reviewing the legal definitions in Connecticut’s Real Estate Laws & Regulations (Section 20-311), as follows –

Connecticut real estate broker

According to state law, this is the legal definition for engaging in the real estate business (Section 20-311(3)) -

is wholesaling real estate legal in ct

Referenced in this section is Section 21-64.

Additionally, Connecticut General Statutes Title 20, Section 312 clarifies when a real estate license is required -

is wholesale real estate legal

Potential violations for engaging in the real estate business in Connecticut without a license include the following (Section 20-325) -

is real estate wholesaling illegal


Do You Need A License To Wholesale Real Estate In Connecticut?

No, real estate wholesalers in Connecticut do not need a real estate license to wholesale real estate – if the real estate wholesaler’s actions do not violate the state’s real estate and license law. These rules and regulations are known as the Connecticut Statute Real Estate Laws & Regulations - Concerning the Conduct of Appraisers, Brokers & Salespersons – Section 20-311, Section 20-314, 20-328, and 20-329, plus a host of related rules in the state.

License To Wholesale Real Estate Legally in Connecticut

Let’s clarify –

A real estate broker can represent in Connecticut either a buyer, a seller, or both parties (Dual Agency is legal in Connecticut) in facilitating and closing the sale of real property. A wholesaler receives contractual rights when they have executed a contract of sale and have given an earnest money deposit. This very distinction explains why most states do not require real estate wholesalers to possess a real estate license to practice legally.

Many real estate investors who successfully wholesale real estate in Connecticut choose to obtain their real estate license as earning a license will allow for a deeper understanding of the real estate laws in Connecticut. It would also provide access to a Multiple Listing Service (MLS), often an excellent resource for real estate leads and networking opportunities.

Unlicensed real estate wholesalers and investors are required to use an attorney to close the wholesale transaction in Connecticut. As such, it is important to use the attorney handling the deal’s knowledge and experience to remain clear of potential license law mishaps.


Is Connecticut Good For Real Estate Investing?

Connecticut offers investors & wholesalers promising real estate opportunities, with real estate attributes that include –

  • High-quality school districts
  • A stunning mix of homes & neighborhoods
  • Proximity to behemoth economic centers; Connecticut is nestled between New York City and Boston, along the Eastern seaboard.

Like much of the real estate sector, Connecticut has experienced a shift to one of the strongest seller’s markets in state history. Demand reaching new levels has consistently pushed home prices and real estate values upward while driving available inventory down.

Connecticut wholesaling real estate


Connecticut Real Estate Statistics

The median Connecticut single-family residential real estate rose nearly 20%, to $318,000 in 2021, when comparing year-over-year prices, as follows -

Connecticut real estate investing


Further, the table shown below indicates, by county, year-over-year median home prices recorded during the month of April.

Connecticut wholesaling houses


Here is a quick shot of how each Connecticut county’s home values performed from 2019 to 2020 -

Connecticut real estate market


Final Thoughts

Real estate markets and investors have been accustomed to evaluating investment opportunities against a historical backdrop of cycles; however, current market conditions have pushed real estate markets to revise business models and structures – often, on the fly – to meet these ever-changing market attributes. These changes will likely transform how the markets operate in the not-too-distant future, with technological developments leading the charge.

But note, most innovators and real estate investors find success by embracing the market’s change and finding emerging opportunities within the overall market. Connecticut’s real estate market is evolving, with investment opportunities always present for investors who stay within the legal limits set forth by Connecticut legislators.


*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

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