Is Wholesaling Real Estate Legal In Texas? A 2025 Guide For Investors

Diving into the vast landscape of Texas real estate, you're presented with a myriad of opportunities to thrive and prosper. While many are drawn to traditional roles like agents or brokers, a world of alternatives beckons with worthwhile opportunities.

With wholesaling properties emerging as a promising avenue, it's crucial to address a foundational question before venturing into the industry: Is wholesaling real estate legal in Texas?

Let Real Estate Skills guide you on wholesaling real estate laws in Texas, types of wholesaling, license requirements, and more:

• What Do You Need To Know About Wholesaling in Texas?
• Is Wholesaling Real Estate Legal in Texas?
• How Is Wholesaling Real Estate Legal in Texas?
• Do You Need A License To Wholesale Real Estate Legally In Texas?
• What Are The Wholesaling Laws in Texas?
• Is Wholesaling Legal In Houston? Is Wholesaling Legal In Austin?
• Common Mistakes in Texas Real Estate Wholesaling and How to Avoid Them
• FAQ: Is Wholesaling Real Estate Legal in Texas?

Ready to Take the Next Step in Real Estate Investing? Join our FREE live webinar and discover the proven strategies to build lasting wealth through real estate.

Whether you're just getting started or ready to scale, we'll show you how to take action today. Don't miss this opportunity to learn the insider tips and tools that have helped thousands of investors succeed! Seats are limited—Reserve Your Spot Now!

*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 Webinar Training and gain insider knowledge, expert strategies, and essential skills to make the most of every real estate opportunity that comes your way!

What Do You Need To Know About Wholesaling in Texas?

The most important thing to know about wholesaling is that you can get into a lot of trouble if you don’t know what you’re doing. You must follow Texas laws and regulations that pertain to wholesaling.

All real estate transactions are governed by rules and laws set forth by the Texas Real Estate Commission (TREC).

The TREC shares staff and resources with the Texas Appraiser Licensing and Certification Board (TALCB), established as an independent subdivision of TREC in 1991 when federal law required increased appraisal regulation.

Together, they provide licensing, education, complaint investigation services, and regulation and enforcement of state laws and requirements that govern real estate matters.

Staying within the law framework, there are several ways you can structure deals as a wholesaler.

With some good old-fashioned elbow grease, creativity, and a dash of tenacity, you can become a wholesaler in Texas quickly and complete your first deal without a substantial initial cash outlay.

Monthly Updates on Wholesaling Real Estate Laws in Texas

We regularly monitor the legal landscape and market conditions affecting wholesaling real estate in Texas. Here's what's new this month:

• April 2025: No new laws have been passed affecting the legality of wholesaling in Texas.
• Texas’s median home price dropped $−723 (-0.24%) month-over-month, possibly creating more opportunities to find motivated sellers.
• Dallas and Austin are the top two cities in Texas with the highest demand for off-market real estate deals, offering investors ample opportunities in distressed and undervalued properties.
• Foreclosure Activity Signals Opportunity for Wholesalers: As of this month, the State of Texas currently has 9,806 properties in foreclosure, 1,250 bank owned properties, and 8,556 headed for auction. For investors focused on wholesaling real estate in Texas, this creates a growing pool of motivated sellers and distressed properties that could translate into strong off-market deal flow.

We’ll continue to track changes and trends to help you stay compliant and profitable while wholesaling real estate in Texas.

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

Is Wholesaling Real Estate Legal In Texas?

Wholesaling real estate is legal in Texas, as long you follow state laws and regulations.

You can wholesale houses, condos and townhomes, apartment buildings, mobile homes, commercial properties, distressed properties, and even raw land. But there is a big difference between being an unlicensed real estate wholesaler and a licensed real estate agent or broker.

As a wholesaler, your goal is to find properties and match them to cash buyers, either by assigning a contract or facilitating a short-term sale that puts the property in the hands of the final owner, collecting a fee for your efforts. The best way to do this is to learn how to get MLS access in Texas, locate distressed homeowners, and work out win-win-win situations for everyone.

As a licensed Realtor, your job is to market and attract buyers to a particular property. You collect a commission when the property sells and the deal closes.

Wholesalers can get into trouble when they cross the line and market a property instead of marketing the rights to assign a contract for a property. That's why it's often advisable to seek out experienced legal advice, especially early on.

Read Also: How To Find Off-Market Properties In Texas: The 4 Best Sources

Is Co-Wholesaling Real Estate Legal in Texas?

Co-wholesaling is legal in Texas and involves creating a joint venture between two parties who both agree to play complementary roles in getting a property under contract.

The legal issues are the same for a single wholesaling entity or multiple entities who want to engage in co-wholesaling.

As long as all parties are clearly identified and their roles in the transaction, there should be no issues with co-wholesaling deals in Texas.

Is Reverse Wholesaling Real Estate Legal in Texas?

If you think of wholesaling as a 1-2-3 process, then reverse wholesaling is more like a 3-2-1 process. You simply reverse the order in which you put together wholesaling deals.

As long as you follow Texas real estate laws and the individual steps involved in wholesaling, you should encounter no problems when you reverse the order of those steps.

It’s perfectly acceptable to line up real estate investors first before you attempt to get a property under contract.

You are restructuring how you put a wholesaling deal together. Don’t deviate from accepted practices, and you will be fine.

How Is Wholesaling Real Estate Legal in Texas?

There are several ways to legally wholesale real in Texas. The 3 most common methods are:

• Assignment of Contract: With this method, you are a middleman who finds a willing seller and puts their home under contract. This gives you the right to assign the contract to a buyer, collecting an assignment fee for your efforts. An assignment does not cost you anything to complete the deal.
• Double Close: With the double closing method, you buy the property from a seller and then immediately sell the property to a real estate investment entity you have lined up, generally on the same day or within a few days of each other. The wholesale deal is facilitated with the wholesaler’s cash, private money lenders, or transactional funding.
• Buying & Selling: As a wholesaler, you buy an investment property for an extended period of time, generally weeks or months. You make no improvements before selling to an end buyer, rehabber, or flipper at a later date.

If you want to wholesale real estate legally, you must do your due diligence and understand a few key legal points that often get people into trouble.

First, do not attempt to broker a real estate deal without a license. If you do not have a real estate license, the only way to legally wholesale property is to enter into a contract that gives you the legal authority to assign the contract. Do not attempt to actually sell the property.

You can work around this by getting your real estate license. But that does require time and financial commitment, which may or may not be worth it, depending on your situation.

Also, you can’t publicly market a property you don’t own if you’re not a licensed Realtor. When you market the property to private investors, you must disclose that you only hold a valid contract on the property.

You can avoid the limitations associated with assigning a contract by doing a double close or a buy-and-sell arrangement. But that’s not always feasible for wholesalers.

Read Also: How To Invest In Real Estate In Texas: Top Strategies In 2025

*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 Real Estate License To Wholesale In Texas?

No, you don’t need a license to wholesale real estate legally in Texas. However, as a licensed agent, you won’t be bound by assignment contract limitations or how you can market a property once you have an agreement with the seller in place. When you as an agent, you’ll collect a commission instead.

In 2017, Texas tightened the law as it pertains to wholesaling without a license with the passage of Senate Bill 2212. It amended the Texas Occupations Code by adding Section 1101-0045, which became effective on September 1, 2017. Section 5.086 was also added to the Texas Property Code:

New Section 1101.0045

(a) A person may acquire an option or an interest in a contract to purchase real property and then sell or offer to sell the option or assign or offer to assign the contract without holding a license issued under this chapter if the person:

1. Does not use the option or contract to purchase to engage in real estate brokerage; and
2. Discloses the nature of the equitable interest to any potential buyer.

(b) A person selling or offering to sell an option or assigning or offering to assign an interest in a contract to purchase real property without disclosing the nature of that interest to a potential buyer is engaging in real estate brokerage.

Avoiding Unlicensed Real Estate Activity in Wholesaling

In Texas, wholesalers must follow state regulations carefully to avoid engaging in unlicensed real estate activity. The Texas Real Estate Commission (TREC) enforces strict guidelines, and violating them can result in fines or legal action.

To wholesale legally in Texas, adhere to these key rules:

• Only market the assignable contract: Texas law prohibits marketing a property you do not own. You may only advertise your contractual rights to purchase the property.
• Provide clear disclosure: Both the seller and the end buyer must be fully informed that you are assigning the contract rather than selling the property. Transparency is crucial.
• Follow Texas disclosure laws: Under the Texas Occupations Code, wholesalers must disclose their equitable interest in writing before entering into an assignment agreement.

If you negotiate on behalf of others, collect a fee beyond an assignment, or act in a way that resembles a real estate agent, you may need to obtain a real estate license to remain compliant with Texas law.

You can also check out our video on Wholesale Real Estate Contracts!

New Section 5.086 to Texas Property Code

Equitable Interest Disclosure: Before entering into a contract, a person selling an option or assigning an interest in a contract to purchase real property must disclose to any potential buyer that the person is selling only an option or assigning an interest in a contract and that the person does not have legal title to the real property.

Read Also: How To Become A Real Estate Agent In Texas

Wholesaling Real Estate Laws In Texas

According to the Texas Real Estate Commission (TREC), there are new disclosure requirements for wholesaling real estate in Texas in 2024.

Bill SB 1577 states that effective January 1, 2024, wholesalers in Texas are required "to disclose their interest in the property in writing to both buyers and sellers."

In addition to what we’ve already covered, here are the important laws to note if you want to wholesale real estate in Texas.

Under The Real Estate License Act, a broker is defined as a person who, in exchange for a commission or other valuable consideration, or with the expectation of a commission or other valuable consideration, performs one of the following acts:

• Sells, exchanges, purchases, or leases real estate or offers to sell, exchange, purchase, or lease real estate.
• Negotiates or attempts to negotiate the listing, sale exchange, purchase, or lease of real estate.
• Lists or offers attempts or agrees to list real estate for sale, lease, or exchange.
• Auctions or offers attempts or agrees to auction real estate.
• Deals in options, including a lease to purchase or buy, selling, or offering to buy or sell options on real estate.
• Offers or attempts to aid in locating or obtaining real estate for purchase or lease.

Between this and SB2212, a wholesaler must be as transparent as possible, making sure to fully disclose that they do not hold legal title to a property and offer only to sell the contractual rights to a property.

If you don’t follow the laws, you could find yourself in some considerable legal trouble.

Under Section 1101.758 of the Texas Occupations Code, a person who commits an offense of acting as a broker or an agent without holding a certificate can be prosecuted for a Class A Misdemeanor for each offense. If multiple Class A Misdemeanors are committed, a person can be charged with a felony.

The Occupations Code provides for civil litigation as well for these types of violations.

The TREC Enforcement Division protects consumers by enforcing The Real Estate License Act, Rules of the Commission, Chapter 1102 of the Texas Occupations Code regarding Real Estate Inspectors, the Texas Timeshare Act, and the Residential Service Company Act.

Is Wholesaling Legal in Houston & Austin?

Conducting wholesaling business transactions is legal throughout the entire state of Texas.

If you’re looking for an added advantage in doing well as a wholesaler, look no further than Texas’s biggest metro areas.

Consider some key statistics of the state’s five largest cities:

Source: Wikipedia

Seven million people live in these cities, and that number doubles when you consider nearby communities and suburban sprawl.

More people means more wholesaling opportunities. Bigger metro areas also attract more buyers with deeper pockets, making it easier to put together deals.

Double-digit growth over the past decade also indicates a healthy demand for people looking to move into the areas.

To further validate the state’s economic health, take a look at the primary Realtors’ Associations for each of these areas. Check out home value trends, schools, neighborhoods, and other statistical data to acclimate yourself to regional wholesaling opportunities.

• Houston Association of Realtors
• San Antonio Association of Realtors
• Dallas (Metrotex) Association of Realtors
• Austin Board of Realtors
• Fort Worth Association of Realtors

The great thing about wholesaling is that it is highly transferable, meaning you can find deals in every town and city in Texas.

What works well in one area of Texas also works well in another because laws governing wholesaling and real estate transactions are administered at the state level.

Common Mistakes in Texas Real Estate Wholesaling and How to Avoid Them

Wholesaling real estate in Texas can be lucrative, but it’s easy to make costly mistakes if you aren’t careful. A common pitfall is failing to disclose your role as a wholesaler to sellers and buyers. Full transparency is essential to avoid legal issues. Another mistake is marketing a property you don’t own or control—in Texas, you need equitable interest (via contract) to market legally, or you could face fines.

Many wholesalers also overestimate property values or ignore repair costs, leading to deals that fall apart when end buyers balk. To avoid this, always conduct thorough due diligence with accurate market analysis. Lastly, neglecting contracts and legal compliance can result in disputes or penalties. Work with a real estate attorney to ensure your contracts are airtight.

By being transparent, careful with valuations, and staying compliant, you’ll increase your chances of success while minimizing risks.

Read Also: Best Places To Buy Rental Property In Texas For 2025

FAQ: Is Wholesaling Real Estate Legal in Texas?

If you’re wondering whether you can wholesale real estate in Texas without breaking any laws, you’re not alone. Many new investors want to get started quickly but aren't sure what’s allowed in the Lone Star State. Below are answers to the most frequently asked questions about the legality and rules surrounding wholesaling real estate in Texas.

What’s the difference between marketing a contract and marketing a property?

Marketing the contract means advertising your right to purchase the property, while marketing the property directly may require a license.

Can I assign contracts in Texas?

Yes, assigning contracts is allowed, and it’s the most common strategy wholesalers use in Texas.

What laws should wholesalers be aware of in Texas?

You must comply with the Texas Real Estate License Act (TRELA) and avoid misrepresenting your role in the transaction.

Can I use a real estate agent to help me wholesale in Texas?

Yes, working with a licensed agent can help you navigate deals legally and give you access to more properties through the MLS.

Are there any disclosure requirements for wholesalers in Texas?

Yes, wholesalers should disclose their position as a contract holder and make it clear they are not the property owner.

Is wholesaling real estate in Texas a good strategy for beginners?

Yes—when done legally, wholesaling is one of the fastest and most affordable ways to break into the Texas real estate market.

Final Thoughts

Wholesaling real estate in Texas is not only legal but also does not require a license. It presents a lucrative opportunity for individuals who are well-versed in the relevant laws, including contracts, disclosures, and marketing practices. With determination and the right knowledge, you can carve out your niche in Texas's dynamic real estate landscape. Embark on your journey towards becoming a proficient wholesaler by diving into our free training today.

Watch our Free Real Estate Investor Training to learn how our Ultimate Investor Program can unlock even more opportunities and strategies in the Texas market. Don't miss out—take the next step toward maximizing your investment potential today!

Ready to Take the Next Step in Real Estate Investing? Join our FREE live webinar and discover the proven strategies to build lasting wealth through real estate.

Whether you're just getting started or ready to scale, we'll show you how to take action today. Don't miss this opportunity to learn the insider tips and tools that have helped thousands of investors succeed! Seats are limited—Reserve Your Spot Now!

*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.