UNLOCK FREE TRAINING
is wholesaling real estate legal in utah

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

contracts flip contracts legal real estate investing strategies wholesale real estate Apr 25, 2024

Utah is a beacon of opportunity for aspiring real estate investors, drawing entrepreneurs to its promising market. As the Beehive State continues to witness robust growth and development, wholesaling real estate emerges as a lucrative avenue for those seeking to capitalize on its vibrant economy. Yet, amidst the allure of profitable deals and promising ventures, a critical question looms large: is wholesaling real estate legal in Utah?

This comprehensive guide will explore the legal intricacies surrounding real estate wholesaling in Utah, shed light on the regulatory framework, and offer strategic insights to navigate the industry's complexities. In doing so, we'll cover everything there is to know about wholesaling properties in Utah, starting with the following:


*Before we begin our guide on whether wholesaling real estate is legal in Utah, 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 Do You Need To Know About Wholesaling Houses In Utah?

Before entering the world of wholesaling houses in Utah, aspiring real estate wholesalers should grasp several key concepts to navigate the market effectively. Wholesaling involves finding deeply discounted properties, securing them under contract, and then assigning those contracts to other buyers for a fee, typically without performing any renovations. In Utah, wholesalers employ various strategies, such as contract assignments, double closings, and wholetaling.

Understanding Utah's legal landscape is crucial. While wholesalers don't necessarily need a real estate license, they must comply with state laws governing real estate transactions, including disclosure requirements and fair dealing practices. Moreover, wholesalers should be familiar with the doctrine of equitable conversion, which stipulates that once a contract is signed, equitable title transfers to the buyer, even if the sale hasn't been completed.

The state's burgeoning population has spurred the establishment of several real estate associations and governing bodies. These organizations play pivotal roles in shaping industry standards, providing educational resources, and advocating for the interests of real estate professionals across the state. Aspiring wholesalers can leverage these associations to provide context to their most important question: Is wholesaling real estate in Utah legal?

As we explore Utah's real estate landscape more deeply, let's explore which associations and governing bodies contribute to the market's dynamic nature and offer valuable opportunities for wholesalers to thrive.

Located in the city of Sandy, the primary real estate trade association in Utah is the Utah Association of Realtors (UAR). There are also several local Realtor associations serving housing markets in Utah. Some of those larger local organizations are:

Is wholesaling real estate legal in Utah? When answering this question, these organizations are a great place to start.


*For in-depth training on real estate investing, Real Estate Skills offers extensive courses to prepare you for 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!

Free Real Estate Investing Training


Under the auspices of the Utah Department of Commerce, the Utah Division of Real Estate (DRE) is located in Salt Lake City and is tasked with protecting the public and promoting responsible business practices through education, licensure, and regulation of real estate, mortgage, and appraisal professionals.

It administers several Utah State laws, including:

The Division also allows consumers and industry professionals to search Utah real estate and appraisal license information through a dedicated search page.

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

Yes, wholesaling real estate is legal in Utah. However, to navigate this landscape successfully, wholesalers must diligently adhere to the state's regulatory framework governing real estate transactions. Although obtaining a real estate license isn't mandatory for wholesalers, they must observe specific legal obligations, including full disclosure and fair dealing practices.

Wholesalers operating without a real estate license must be mindful of the limitations imposed by licensing regulations. Specifically, wholesalers cannot engage in activities that necessitate a real estate license, such as assisting homeowners in buying, selling, or marketing their properties. Instead, wholesalers are restricted to dealing solely in their equitable interest in a contract to purchase the house.

This distinction underscores the importance of understanding the scope of permissible actions for wholesalers operating without a license. While they can negotiate and assign contracts, they must refrain from providing services that would traditionally require licensure, such as representing buyers or sellers, offering advice on transactions, or actively marketing properties on behalf of others.

Utah's legal infrastructure for real estate transactions lays down clear guidelines for wholesalers, emphasizing transparency and ethical conduct; this entails ensuring all involved parties fully comprehend the transaction's nature and any associated risks. Moreover, adherence to the doctrine of equitable conversion is crucial, recognizing that equitable title shifts to the buyer upon contract signing, regardless of the sale's completion.

Understanding and abiding by Utah's legal requisites empowers wholesalers to operate confidently while sidestepping potential legal entanglements. While wholesaling promises lucrative opportunities, adherence to legal parameters is fundamental to upholding professionalism and nurturing trust.

So, yes, wholesaling real estate is permissible in Utah, but adherence to state laws and regulations is imperative for ethical and responsible business conduct.

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

What Are The Wholesaling Laws In Utah?

To successfully wholesale properties in Utah, you must comply with state laws and regulations. Wholesaling can be a lucrative and rewarding career, but you can get into trouble if you don't pay attention to a few key provisions.

If you’re unsure what may apply to you, or if you need help creating purchase agreements or other legal documents, it's always wise to seek the help of a real estate attorney, preferably someone with experience with investment properties and wholesale deals. It may cost you a few dollars, but the investment in protection will be well worthwhile.

The first and most important law to understand is that if you are an unlicensed wholesaler and want to assign a contract that gives a third party a controlling interest in a piece of real estate. Real estate wholesalers execute contract assignments without purchasing the property themselves. Instead, they secure the right to buy the home, allowing them to assign the contract to another buyer for a fee. Consequently, wholesalers market their interest in the contract rather than the property itself, ensuring transparency and clarity in their transactions.

Per Utah Code 61-2f-201:

Anyone who offers or attempts to offer the purchase, sale, lease, management, or exchange of another person’s property with the expectation of receiving valuable consideration must first obtain a Utah real estate license. An offer or attempt to offer includes advertising of a property or service. Failing to obtain a real estate license before engaging in any of these practices may be a violation of Utah law.

Another key provision in Title 61, Chapter 1 of the Utah Uniform Securities Act, covers securities fraud, including real estate. It states that it is unlawful for any person to employ any device, scheme, or artifice to defraud, make an untrue statement of a material fact, or engage in any act, practice, or course of business which operates of business which operates or would operate as a fraud or deceit upon any person.

This means that as a wholesaler or a licensed real estate agent, you must disclose all material facts related to the property in question, or you will be guilty of fraud.

Chapter 1 also clarifies the licensing requirements for those involved in real estate transactions. In part, it states that it is unlawful for a broker-dealer to transact in this state as a broker-dealer unless licensed under this chapter.

Another important part of the Act is 61-2f-305, which details restrictions on commissions; this is especially noteworthy since a wholesaler who undertakes an assignment of contract can only collect a fee for their efforts. It is illegal for them to collect a commission, which is only allowed for licensed agents.

Several additional statutes and rules that apply to licensed real estate agents who wholesale through assignable purchase contracts include:

  • 61-2f-306 (1): Using state-approved forms
  • R162-2f-401b (17)(a): Obtaining written permission to market the property
  • R162-2f-401a (2): Establishing and defining in writing the licensee’s scope of agency
  • R162-2f-401a (10)(a): Confirming the prior agency disclosure in the currently approved Real Estate Purchase Contract
  • R162-2f-401a (6)(b): Disclosing the licensee’s status as a licensee
  • R162-2f-401a (6)(a): Disclosing that the licensee is a principal in the transaction
  • R162-2f-401a (16)(a)(b): Disclosing additional compensation and ensuring that the compensation is paid to the principal broker.
  • R162- 2f-401h (1)(2): Disclosing the licensee's brokerage on all advertisements.

Do You Need A License To Wholesale In Utah?

You don’t need a license to wholesale real estate in Utah. However, without a license, the steps you take to wholesale properties will differ from those who already have a license. As a result, many people who engage in wholesaling activities get a real estate license to avoid unnecessary complications.

The Utah Real Estate Commission regulates licensing for anyone interested in becoming an agent. Detailed oversight in general provisions is explained in Title 61 Chapter 2f under the Real Estate Licensing and Practices Act.

According to Title 61-2f-201, a license is required when a person is engaged in the business of a principal broker, associate broker, or sales agent.

You may also want to look closer at Title 61-2f-202, which details exempt persons in transactions.

As previously mentioned, the Utah Department of Commerce (Division of Real Estate) administers real estate licenses in the state. There are several requirements if you apply for a Utah real estate license. They include:

  • You must be at least 18 years old, a citizen of the United States, or a lawfully admitted alien.
  • You must have a valid Social Security number.
  • You must have a high school diploma or equivalent.
  • You must complete 120 hours of pre-licensing courses.
  • You must complete 18 hours of continuing education for each licensing term.
  • You must meet the statutory licensing qualifications of honesty, integrity, truthfulness, reputation, and competency. (Utah Code Annotated 61-2f).
  • You do not qualify for a real estate license if you have a felony on your record in the last five years or if you have a misdemeanor involving fraud, misrepresentation, theft, or dishonesty within the past three years.

Again, a real estate license is not required to wholesale properties in Utah. However, those without a license must adhere to strict rules. For example, those without a license can only market their equitable interest in the property, not the property itself. It's a small distinction but a very important one, nonetheless. As a result, many wholesalers in Utah opt to get a license to avoid unnecessary complications.

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

Wholesaling real estate in Utah

Is Wholesaling Real Estate Legal In Salt Lake City?

Yes, wholesaling real estate is legal in Salt Lake City. Since laws pertaining to real estate transactions apply uniformly throughout Utah, there don't appear to be any wholesale laws unique to Salt Lake City that would prevent wholesalers from engaging in their activities.

However, in recent years, the Utah Division of Real Estate has intensified its scrutiny of wholesaling practices, particularly regarding contract assignments. Amidst complaints from brokers, there are indications that wholesaling may soon be considered a licensed activity, prompting non-licensed wholesalers to face potential challenges. Some have initiated legal actions in response, but the issue remains unresolved. To mitigate potential risks, non-licensed wholesalers should consider employing alternative strategies such as double closing or buy-and-sell approaches to avoid potential legal complications.

Utah Wholesale Contract

Two primary real estate contracts are used to wholesale real estate in Utah. Those include:

  1. Real Estate Purchase Contract “REPC”
  2. Assignment Of Interest Addendum To Real Estate Purchase Contract

Real Estate Purchase Contract

This form solidifies a buyer's right to purchase a real estate property from a seller. Below is the first page of the primary purchase and sales agreement that has been approved by the Utah Real Estate Commission and the Office of the Utah Attorney General.

Utah Assignment Contract

Functioning as an addendum to the Real Estate Purchase Contract, the Assignment Of Interest Addendum effectively transfers the buyer’s interest in the purchase contract to another entity.

wholesale real estate contract pdf

Final Thoughts

Is wholesaling real estate legal in Utah? Now that you've read our guide, you know that the legality of wholesaling properties in Utah is unequivocal. As we explored, understanding the regulatory framework and legal requirements is paramount for wholesalers to operate ethically and responsibly.

With clarity on the legality of their endeavors, aspiring wholesalers can now focus on honing their skills and strategies. If you're ready to delve deeper into real estate wholesaling, consider harnessing the expertise and resources of Real Estate Skills' Ultimate Investor Program. It's time to turn knowledge into action and embark on your journey to success in the dynamic Utah real estate market.

So again, is wholesaling real estate legal in Utah? Absolutely. Now, let's learn how to excel at it with Real Estate Skills.


*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


free real estate investment training

Unlock Our FREE Webinar Training

Founder & CEO of Real Estate Skills, Alex Martinez, reveals the systems and processes used to wholesale and flip houses without doing any marketing!

  • Completely FREE training video.
  • No prior experience is required to start.
  • Begin investing with no cost for marketing.
  • Learn to invest in any real estate market.
  • Discover how you can close deals consistently

Enter your information below to unlock the FREE webinar!

By providing my contact info, I give express written consent to Real Estate Skills to email, call, & send text messages for upcoming events & reminders. By opting in you agree to RealEstateSkills.com's Terms of Use and Privacy Policy.

Reviews & testimonials from students like you.

No matter where you start, you can become a successful real estate investor. Listen to these amazing stories from the students in our program!