Ohio REALTORS Lead the Charge Against Predatory Wholesaling Practices
By Anastasia Kotkovskaya, Ohio REALTORS Manager, Advocacy and Research
This week, Ohio REALTORS® lobbied legislators for the passage of Senate Bill (SB) 192, important legislation designed to curb the predatory practice of real estate wholesaling. Rich Cosgrove, a broker with Keller Williams Legacy Group Realty, and Andrew Huffman, Assistant Vice President of Government Affairs at Ohio REALTORS®, testified before the Senate Government Oversight Committee, urging lawmakers to protect vulnerable homeowners.
Real estate wholesaling is a predatory practice where a wholesaler enters into a purchase agreement with a homeowner, often under the guise of being the actual buyer. However, instead of completing the purchase, the wholesaler assigns the contract to a third-party investor for a fee, pocketing the difference. These transactions frequently occur without the wholesaler ever taking title to the property or being transparent about their true intentions.
Wholesalers often target vulnerable groups, including seniors, low-income homeowners, and those with properties in need of significant repairs. They approach these homeowners with misleading promises of a quick cash sale, omitting critical information about the property’s true market value or the wholesaler’s intent to resell the contract for profit. This practice strips homeowners of their equity and leaves them blindsided at closing.
Rich Cosgrove, an experienced broker in Canton with over two decades of experience and a team of 275 agents, shared firsthand accounts of the troubling practices his team has encountered with real estate wholesalers. One of his agents was contacted by a wholesaler who made a verbal offer on a home, only to later reveal that they were not the actual buyer, nor a real estate professional, but rather was acting as an intermediary with the intention of assigning the contract to another person for a “finder’s fee.” Cosgrove shared in his testimony:
This person in my opinion was practicing real estate without a real estate license. His intent was to get our seller to accept $69,900 and he would then turn around and sell the purchase agreement to another person for more money. As I mentioned our agent asked a lot of probing question so she could have a full understanding for our seller and this is when she learned that the gentleman she was speaking with didn’t have any money to purchase the home himself and wanted us to write up the offer to the person he was selling the purchase agreement to.
We have made sure to educate our agents on the practice of wholesaling and what to look out for. It was our agent’s knowledge and fiduciary duty to the seller that prevented them from entering into a purchase agreement with a wholesaler that had no real estate license, money or intent to close on the property.
Andrew Huffman from the Ohio REALTORS® government affairs team also provided a broader perspective on the systemic issues posed by real estate wholesaling. Representing Ohio REALTORS® 36,000 members, he emphasized how these practices exploit Ohio homeowners, undermine the integrity of the real estate market, and erode public trust. He highlighted the deceptive tactics wholesalers often employ, where they misrepresent themselves as genuine buyers, offer below-market prices, and resell their contracts for a profit – all without taking actual ownership of the property.
“Wholesalers often indicate that they have the homeowner’s best interest in mind,” Huffman explained, “yet their main goal is to earn as much profit as possible for themselves, and not the homeowner.” He stressed that this approach disproportionately impacts Ohio’s most vulnerable homeowners, including seniors and those facing financial distress. Huffman shared:
SB 192 proposes vital disclosure requirements for real estate wholesalers to curb these dangerous practices and protect Ohio’s homeowners from exploitation. Having wholesalers clearly communicate their intentions to the homeowner will prevent deceptive practices and bring much-needed transparency to real estate transactions. Ohioans deserve to sell their homes in an environment free from predatory practices that strip them of equity, and this legislation provides essential protections against bad actors in the real estate industry.
Proponent testimonies were also submitted to the committee by REALTOR® members Linda LaFleur and Mary Vedda.
Ohio REALTORS® remains steadfast in its advocacy for this bill and its commitment to protecting the rights and investments of all Ohioans. As SB 192 continues to move through the legislative process, find more information about it here:
Ohio Legislature | 135 General Assembly | Senate Bill 192
Ohio REALTORS Testifies on Buyer Representation Agreements and Wholesaling
Ohio REALTORS Support Legislation Protecting Homeowners from Unregulated Wholesaling Practices
