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In the fast-moving world of real estate, staying informed isn’t just a professional courtesy — it’s a legal necessity. For South Carolina real estate agents, the May 2024 revisions to the Real Estate Practice Act introduced major changes around the topic of wholesaling. And if you’re unclear on what’s allowed and what’s not, you’re not alone.
Let’s break down what this new legislation means, how to stay compliant, and why it’s more important than ever to keep your continuing education up to date.
What Changed in 2024?
In May 2024, Governor Henry McMaster signed revisions to the Real Estate Practice Act (SC Code §40-57-5 et seq.), aimed at tightening regulations on the practice of wholesaling.
The South Carolina Real Estate Commission (REC) quickly began receiving a flood of questions from licensees and investors alike — and for good reason. The updated law doesn’t outright ban contract assignments, but it draws a very clear line around what constitutes illegal wholesaling.
In response, the REC released an advisory opinion to explain how to tell the difference — and where agents need to tread carefully.
Wholesaling vs. Legal Assignments: Where’s the Line?
At the heart of this change is the definition of wholesaling. According to SC Code §40-57-30(44), wholesaling is:
“Having a contractual interest in purchasing residential real estate from a property owner, then marketing the property for sale to a different buyer prior to taking legal ownership of the property.”
This includes:
- Holding a contractual interest
- Marketing or advertising the property before taking ownership
- Expecting compensation
- Using an assignment or similar instrument to transfer the interest
The takeaway? It’s not the assignment itself that’s illegal. It’s how you use that assignment — especially if it involves marketing the property or expecting compensation without owning it first.
Let’s make that real:
- ✅ Permissible Assignment: You assign your purchase contract to your spouse or corporate entity — no marketing, no public advertisement, no compensation involved.
- ❌ Illegal Wholesaling: You sign a purchase contract, post the property in a Facebook group with pictures and price, and sell the contract to another buyer — that’s wholesaling, and it violates the law.
Marketing Restrictions: What NOT to Do
You may be thinking: “Okay, I’ll just market the contract, not the property.” But here’s where things get tricky.
The statute says it’s only permissible to market a contractual position if it does not imply, suggest, or purport to market the real property itself. In practice? That’s nearly impossible.
The REC explicitly stated that including any of the following in your marketing likely violates the statute:
- Property photos or videos
- Street address or neighborhood
- Number of rooms, square footage, or year built
- Rental income details or rehab status
- Any other description that identifies the real estate
And “marketing” isn’t limited to the MLS. It includes social media, private email groups, flyers, phone calls, and even word of mouth.
In short: If it sounds like you’re selling the property — even indirectly — you may be crossing the line.
What This Means for Licensed Agents
As a South Carolina real estate agent, this isn’t just an investor issue — it’s your issue, too. If you assign contracts, work with wholesalers, or even dabble in investment deals, it’s critical to understand where you stand legally.
Violating the Real Estate Practice Act could put your license at risk.
The REC’s message is clear: ignorance of the law won’t protect you. Knowing the difference between a legal assignment and prohibited wholesaling is now a must-have part of your professional toolkit.
Stay Compliant — and Ahead — with Pinnacle Real Estate Academy
There’s never been a better time to invest in your education — and your peace of mind.
At Pinnacle Real Estate Academy, our state-approved Continuing Education (CE) courses help you stay current on South Carolina real estate laws, contract practices, ethics, and risk management.
Whether you’re looking to protect your license, grow your investment knowledge, or navigate new regulations with confidence, we’re here to help you stay one step ahead.
👉 Register now for one of our CE classes and ensure you’re operating within the law — and above the competition.
Visit PinnacleRealEstateAcademy.com to explore upcoming courses.
