Is Wholesaling Real Estate Legal In Wyoming?

Successful real estate investors understand the concepts that define the real estate market’s cycles. This knowledge is pivotal in identifying emerging investment opportunities as the market enters each stage of its cycle.

The significant appreciation that the United States’ real estate market has experienced in the recent past is best understood by its entrance into the second stage of the cycle – Expansion - somewhere near the beginning of the 2020 pandemic.

It is noted that the market, at this time, bucked conventional wisdom as most world events (like Covid) that impact the global economy negatively ultimately impacts real estate in the same direction.

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The recent measured growth and appreciation characterize the phase of expansion with robust market metrics that include -

• Low vacancy rates.
• Rising rental rates.
• Rising home prices.
• New construction is visible and prevalent

"Stage 2" is defined as a seller’s market, which essentially means that there are more potential buyers relative to the number of available homes for sale. Note, each stage offers unique investment opportunities, with Stage 2’s rapid appreciation aligning perfectly with the investment technique known as real estate wholesaling.

Real estate wholesaling in Wyoming offers these benefits to investors–

• An entry into the investment realm with relatively little capital requirements. A wholesaler is only required to provide an earnest money deposit held in escrow to show good faith.
• More than one exit strategy (like the double closing) from which to choose.

Wholesaling real estate is also a great way to build a network of lenders and a buyers list of end buyers, typically cash buyers, who are interested in future wholesale real estate deals.

Real estate wholesaling is an investment strategy that combines -

• The Wholesaling Principle - a foundational principle of capitalism
• With the Principle of Equitable Conversion – the fundamental rights/beneficial interest granted to the purchaser when a legally enforceable real estate contract has been executed.

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These beneficial interests awarded to the buyer in the real estate contract can be legally transferred to a new buyer by using an assignment of contract.

Wholesale investing resembles the strategy of flipping houses. Flippers, like wholesalers, have a business objective to generate a profit at breakneck speed. Each type of investor searches for a property priced below market value, which is being sold by a highly motivated homeowner (i.e., someone facing foreclosure).

Wholesale properties can be rental property, investment property, or a primary residence but must be well-priced in comparison to current market values.

Digital tools, like Zillow and Redfin, plus various online classes and podcasts offer new wholesalers solid advice to get started in the real estate wholesaling business.

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

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

Wyoming is a state in the Pacific Northwest region of the United States. It became the 44^th state to enter the Union in 1890.

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The area of Wyoming covers nearly 98,000 square miles, which makes it the tenth largest state by area. To give some perspective, the state of Wyoming is 2.1 times larger than New York, about two times larger than Illinois, and one-third the size of Texas.

About 50% of the land in Wyoming is federally owned – including the national parks of the Grand Tetons and Yellowstone. Devils Tower, located in Wyoming’s northeastern corner, holds the distinction of being the first national monument dedicated in the United States.

The western portion of Wyoming is covered by the Rocky Mountains, with the eastern part considered a high elevated prairie. Wyoming is an outdoor lover’s paradise and home to a dozen ski resorts.

In 2021, the population of Wyoming was 581,075, which makes it the least populated and least dense state in the United States.

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The five largest cities in Wyoming are –

The state capital Cheyenne, located in the most southeastern part of Wyoming, is also the most populous city in Wyoming.

The following includes a list of Wyoming’s largest trade professional organizations that are dedicated to the profession of real estate. Each of these state professional associations is a member organization of the National Association of REALTORS (NAR) –

• The Wyoming Association of REALTORS (WAR)

Located in Casper, the Wyoming REALTORS is the state’s largest professional organization for real estate professionals. The WR organizes the state into five districts, as follows –

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• The Casper Board of REALTORS (CBR)

Located in Casper, the CBR was established to offer beneficial support and resource services to real estate professionals and property owners across the greater Casper vicinity. The CBR seeks to serve both the public and its professional members.

• The Cheyenne Board of REALTORS (CBR)

The CBR, located in the state capital, was developed to serve and support the real estate communities of Cheyenne, Burns, Wheatland, Carpenter, Pine Bluffs, and Hillsdale. The Cheyenne Board of REALTORS includes more than 300 professional members of the local real estate community.

• The Laramie Board of REALTORS (LBOR)

The Laramie Board of REALTORS is a professional association located in the state’s third-largest city to serve the property owners and real estate professionals in and around Laramie. The LBOR is the vocal advocate for the real estate industry in the greater Laramie area.

• The Northeast Wyoming REALTORS Alliance (NEWRA)

The NEWRA is one of the largest professional organizations in the northeastern portion of Wyoming. The Northeast Wyoming REALTORS Alliance is the voice of the real estate community in NE Wyoming.

The Wyoming Real Estate Commission (WREC)

The Wyoming Real Estate Commission (WREC) is the state agency responsible for issuing, administering, and managing real estate licenses, brokerages, and overall general market activity in Wyoming. [WS 33-28-105]

The Wyoming laws governing real estate are found in Title 33, Chapter 28 – Real Estate Brokers and Salespersons.

Section 33-28-101 notes –

WS 33-28-102-xliv notes the definition of real estate with regard to Wyoming state law –

The WREC issues these types of real estate licenses for professionals in the state [WS 33-28-102] –

• A real estate salesperson

• An associate broker

• A responsible broker

It is equally important to understand who is exempt from Wyoming’s real estate license law –

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License Reciprocity In Wyoming

According to Wyo. Stat. 33-28-110, these are the regulations associated with nonresidents who wish to obtain a real estate broker’s license in Wyoming –

In addition, the same provision notes the requirements to obtain a Wyoming salesperson or associate broker real estate license –

But note, WS 33-28-110(f) adds –

Wyoming Market Overview - Data through Sept 2021

At the end of September 2021, the typical home value for real estate in Wyoming was $283,656 – which represents a price increase of nearly 8% - year over year. Home prices in Wyoming exceed the national average (as of 1/2021) of $269,039 by about 5.5%. But note that between the years 1999 and current prices, the median price of a home in the United States increased from $111,000 to $269,039 – more than doubled.

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Is Wholesaling Real Estate Legal In Wyoming?

Yes.

Wholesaling real estate in the state of Wyoming is considered legal if the wholesaler does not violate Wyoming license law. 

A real estate wholesaler simply acts as a middleman if their actions do not rise to the level required of a licensee in Wyoming. This is accomplished by understanding that the wholesaler has only one legal asset to sell – his equitable interest in the subject property awarded when they signed a legally enforceable contract of sale.

This ‘right to purchase’ can be assigned to another buyer or cash buyer (often by a price differential that generates a profit or assignment fee) using the legal instrument known as ‘an assignment of sale.’

Most real estate contracts, by default, are assignable unless the purchase agreement has conditional provisions or completely disallows it. 

What Are The Wholesaling Laws In Wyoming?

There are no specific laws regarding real estate wholesaling in Wyoming. The Wyoming laws governing real estate are found in Title 33, Chapter 28 – Real Estate Brokers and Salespersons.

Wyoming Statute 33-28-104 specifically defines the acts that constitute a person in need of a real estate license –

Wyoming 33-28-102-xlv defines real estate activities as follows –

It is noted that violations for this Wyoming real estate law may result in these penalties (WS33-28-112) –

More specifically, WS 33-28-114 notes the penalties for performing real estate activities without a license –

But note, there are no specific provisions or laws that reference the real estate wholesaling business specifically. While some states are ‘attorney close’ states, which can help a wholesaler complete the real estate wholesale deal within legal limits, Wyoming has no requirements that a real estate attorney close a transaction. Note, Wyoming does have legal specifications with regard to title work. This is discussed next.

Wyoming Is Not An Attorney Close State

Various Wyoming statutes speak to the licensing of a title agent or a title company. [WS 26-23-216]. In addition –

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

No.

Wholesalers working in the state of Wyoming do not need a license if their actions and choices do not overstep Wyoming license or real estate law.

As a reminder, under Wyo. Stat. § 33-28-102-xlv, the following actions are considered real estate activities that require a license in Wyoming –

Wyo. Stat. § 33-28-102-xlv

(xlv) "Real estate activity" occurs when an individual for another and for compensation performs any one or more of the following:

(A) Sells, exchanges, purchases, rents, manages or leases real estate;

(B) Offers to sell, exchange, purchase, rent, manage or lease real estate;

(C) Negotiates, offers, attempts or agrees to negotiate the sale, exchange, purchase, rental or leasing of real estate;

(D) Lists, offers, attempts or agrees to list real estate for sale, lease or exchange;

(E) Auctions, offers, attempts or agrees to auction real estate;

(F) Collects, offers, attempts or agrees to collect rent for the use of real estate;

(G) Advertises or holds himself out as being engaged in the business of buying, selling, exchanging, auctioning, renting or leasing real estate;

(H) Engages in the business of charging an advance fee in connection with any contract undertaken to promote the sale, auction or lease of real estate either through its listing in a publication issued for that purpose or for referral of information concerning the real estate to responsible brokers, associate brokers and salespersons;

(J) Buys, sells, offers to buy or sell or otherwise deals in options on real estate or improvements thereon;

(K) Assists or directs in the procuring of prospects calculated to result in the sale, exchange, lease or rental of real estate;

(M) Assists or directs in the negotiation of any transaction calculated or intended to result in the sale, exchange, lease or rental of real estate;

(N) Deals in time shares;

(O) Provides a broker's price opinion as provided in W.S. 33-28-125.

However, real estate wholesalers will find it easier to avoid legality issues by following these helpful hints -

• A real estate wholesale should operate with integrity which includes transparency throughout the transaction, which must include their ultimate wholesaling intentions.
• Consider that a strongly worded purchase agreement is the most direct way to accomplish transparency.
• Proactively manage each party’s expectations with veracity.
• Provide disclaimers when the situation warrants.
• Don’t market or sell real property.

Do market/sell your right to purchase real property as defined by the purchase agreement’s terms.

Exit Strategies For Real Estate Wholesalers In Wyoming

 Wyoming real estate wholesalers have these exit strategies from which to choose - 

• A Buy & Sell Exit Strategy
• A Buy & Assign Exit Strategy
• A Double Close– technically, two closings occurring back-to-back is a type of strategy that facilitates the closing process for wholesalers. The double closing ensures the wholesaler stays within Wyoming’s legal boundaries as they are the legal owner when selling the property. A double closing includes -
  • Two independent transactions for the same property
  • The wholesaler switches places from one transaction to the next. The wholesaler is the buyer in the first closing and the seller in the 2^nd closing
  • Title legally passes through all parties
  • There are dual sets of closing fees, which makes this more costly to close
• Wholetailing

It is recommended that real estate wholesalers in Wyoming seriously consider working with an experienced real estate lawyer. And while it is not required, if the deal is complex (like a joint venture), an attorney providing legal advice that protects your interests is definitely a worthwhile proposition.

Final Thoughts

Smart real estate investors do not try to control the market; they understand its cyclical nature and adjust their investment strategies to meet current market conditions. With the advent of the modern digital landscape and rapidly appreciating home prices, real estate wholesaling as an investment strategy has exploded across many markets.

Real estate investing as a wholesaler can be quite profitable if the wholesaler stays within Wyoming’s legal boundaries and receives the proper training. Like all real estate investments, wholesalers must approach this type of investment with professionalism, prudence, and transparency. 

The legality of real estate wholesaling remains hotly debated, so wholesalers should keep current with the laws in Wyoming. A wholesaler has a legal right to market and sell their ‘right to buy the property.’  A wholesaler cannot market or sell the property without being an owner or a licensed real estate agent.

But note, each Wyoming real estate wholesaler must do their due diligence in their wholesaling approach to ensure they remain within Wyoming’s law. If you comply with Wyoming law, real estate wholesaling is not only legal; it has the potential to be quite lucrative.