From Sellers to Wholesalers: How HB 1081 Changes Washington Real Estate Deals

Christian: [0:00] Hello, hello, and welcome to another episode of the Awesome in Seattle podcast. This is your host, Christian Nossum of the Awesome Nossum Group at Wilson Realty Exchange, Inc, and I am joined with my co-host, my co-agent here on the Awesome Nossum Group, Mr. Varun Jain. How are you today, Varun?

Varun: [0:15] Hey, Christian. This is a very timely discussion with, uh, the new law going into effect starting, uh, January. We will try to pack in a lot of helpful information in this episode.

Christian: [0:25] Yeah. Today we are going to discuss House Bill 1081 and the impact it might have on wholesaling in Washington State. So this applies to anyone that is a seller of real estate, a wholesaler, real estate brokers, or anyone buying a wholesale deal. So why is this new bill coming into effect? Well, the state wants to protect sellers, and they believe this is the way to do it. And a quick disclaimer, we are not attorneys, and this episode is for educational purposes only. If you need legal advice, consult your real estate attorney or your managing broker.

Varun: [1:00] So before we get into the bill, let's talk about wholesaling. Here's a quick rundown. I'm sure many of homeowners and investors receive mailers and/or phone calls inquiring about whether you're willing to sell a particular property that you own. More often than not, these calls are from wholesalers. Typically, in Washington State, wholesalers are not licensed real estate agents. They sell the rights to purchase a property rather than the actual real estate Wholesalers get the property under contract, usually under market value, and then turn around and find a buyer for the property. Then they assign their contractual rights to purchase the property to the new buyer. Wholesalers charge a fee called the assignment fee, typically paid by the buyer, for putting the deal together. Put simply, wholesalers are selling paper and not property.

Christian: [1:57] Yeah, exactly. So why do wholesalers exist? Well, it's because they specialize in finding properties that usually need a lot of repair or the seller needs to sell quickly for a personal reason, like a birth, a death, marriage or divorce, job transfer, job loss, or whatever. Often the seller's situation or preference is to sell off-market, meaning they don't wanna list their property for sale. They don't wanna market it online. They don't want open houses. They don't want a bunch of random people walking through their house. Since these properties aren't advertised, they're not very easy to find. Wholesalers find these properties and then advertise them to investors, and investors grab properties from wholesalers, they add value to the property, and they sell it or they rent it out. Wholesalers generally don't wanna do the rehab work, and investors don't usually want to find the distressed sellers. This is why wholesalers exist. That said, many wholesalers are not operating in a predatory manner and are treating homeowners fair, but some are.

Varun: [3:03] Yeah. So i- that's kinda the key part here is there is a subset of wholesalers that don't act in the best interest of the sellers, and that's where through House Bill 1081, Washington State is adding some protections for sellers when dealing with wholesalers and hopefully reduce these predatory practices during an off-market transaction. Christian, can you go over the key highlights of the bill?

Christian: [3:32] Yeah. So sellers listen up. Starting January 1st, 2026, per House Bill 1081, the seller has all of these rights. The seller has the right to order an appraisal. The buyer must pay for the appraisal. The appraisal must be ordered within three business days of signing the contract. The seller can choose the licensed appraiser, and they have to be licensed. The seller then has four days after the appraisal comes back to cancel the contract without any penalty to the seller. The seller has the right to cancel the contract anytime within the first ten business days of signing the contract without any penalty. And all solicited purchase and sale agreements must disclose these rights to the seller and get a seller acknowledgement prior to finalizing the sale. And you can't bury this language in fine print. It has to be disclosed clearly and upfront and needs to be a part of the contract. Now, these rules apply under certain conditions, which are, first, the seller must be solicited for the property. In other words, these rules don't apply if the property's listed on the MLS or listed as a for sale by owner Second, neither seller nor the buyer is represented by a licensed real estate agent. So if either party's represented by a licensed real estate broker, then none of these rules apply. So any violations of the bill's provisions are gonna be enforced by the Consumer Protection Act, providing legal recourse for homeowners who are misled or taken advantage of in these transactions.

Varun: [5:11] That's right. One other thing that I'll add here is the house bill, so applies to the state overall. We've heard different cities are coming up with their own regulations, some in line with state and some might be stricter. So we will see how this … through the course of 2026 and keep you updated in the future. So we've covered how House Bill 1081 protects sellers. What do wholesalers and real estate agents need to be aware of, and how can they prepare for this law?

Christian: [5:42] Yeah, so first let's start with wholesalers. So the easiest way forward is for you to get your real estate license. While Washington isn't mandating the license requirement for wholesalers, this bill opens the door to that, and in my opinion, I think this eventually- Yep will happen. Wholesalers probably will eventually need to get their real estate broker's license. Once you get your license, you can then represent yourself on an off-market transaction and then sidestep the requirements that this law, that I just discussed. Remember, you still have to disclose the new rules to the seller and get their acknowledgement. You just don't have to follow all of those steps as if you were not a broker. As a real estate broker, this is your chance to potentially increase your business. If I were you and you were hunting for business, I would say reach out to wholesalers in your network and check and see if they need that representation for their off-market transactions. 'Cause not all of these wholesalers are gonna wanna go through the whole entire licensing process. It is kind of a pain, and it's annoying, and it's a lot of regulation that- hoops you have to jump through. So if you were a real estate agent or broker, you might wanna reach out to those wholesalers, try and partner up. And then finally, as a buyer, make sure that you're looking at the transaction timelines before you wire money to someone's bank account. The last thing you want to do is wire money to a wholesaler before the 10-day period ends, and you have the deal fall through, and then you lost your money because the wholesaler's like, "Well, you gave me the money. You don't get your money back." So make sure that you understand the contract, and I wouldn't personally wire anything within that 10-day, day period. Yeah.

Varun: [7:24] Once they have the money, there is a chance the wholesaler might disappear and ghost you completely So looks like we've covered major points from House Bill 1081. If you're a seller, be aware of your rights. If you're a wholesaler, focus on being compliant with these new regulations and update your documentation. If you're a real estate agent, go out there, network with wholesalers, and increase the pie, increase your business. And if you're a buyer, watch out for the dates and timelines. Once you're past the 10-day timeline, there's a high likelihood the sale will go through and you are in the clear Now, before we end the episode, let's play out some scenarios. I think this is what a lot of people would wanna think through as well when they get these odd calls. So here's a scenario. You're a homeowner. You receive an offer on your primary residence or a rental property that you own. Let's assume for this example that your house is not on the market, but you've already been considering selling this, and the offer price has piqued your interest as a seller. Christian, let's talk through pros and cons of different approaches here.

Christian: [8:35] Yeah, this is a really great example, and I think this is kinda where most people will land. So there's one of two things that could be true here. First, the wholesaler is not licensed and all the requirements from House Bill 1081 apply to this transaction. The seller can get an appraisal paid for by the wholesaler and take 10 business days to accept, reject, or negotiate the price and terms. Or the wholesaler is a licensed broker representing themselves and the transaction is exempt from House Bill 1081. In this case, the seller has two options. Negotiate on their own or bring in their own real estate agent to help represent them. Obviously, we would recommend against negotiating on your own because you are not only negotiating on price, but also on all of the other terms of the agreement. If you have an agent/broker, their fiduciary duty is to you and not the wholesaler, so they're gonna try and protect you and make you the most money. And sure, yes, it does come with extra costs in the form of commissions, but we suggest hiring a professional as that is similar to hiring a licensed contractor for a remodel. A good agent should be worth the added expense.

Varun: [9:47] That's true. And we've seen that over and over again where agents, good agents know what they're doing. They negotiate well not only on price, but on terms. They make sure all the documentation, all the legal documentation around the purchase and the sale of the property is clean, and that's where they add value. Now, the other obvious question here is why not just list it on the MLS if you're anyways gonna hire an agent and test the market? The seller might be able to get a higher price.

Christian: [10:18] Yeah, maybe, but maybe not. Plus, as a seller, you don't have to deal with the hassle of moving all your stuff out before you hit the market or fixing up and cleaning the house, staging it, getting photos done. Working around the open house and showing schedule. If you're currently living in the property, it, it's a pretty big inconvenience to put your house on the market. It can be. Because there's a lot of people coming in wanting to see it, as they should. Your agent's job, your broker's job is to get people in the door and look at the house. But if you're living in it, if you have pets, if you have kids, that's not always easy to do 'cause you gotta take all those things out of there. So on the other hand, if this is a rental property that you own that you're thinking of selling, you either need to keep the property vacant or provide su- sufficient notice, and in that, in Washington it's 48 hours notice for your tenants for any open houses and showings, which can be really, really difficult to do. Yeah. And, and honestly, a lot of tenants don't want that. Like, they're gonna throw a big fuss about that 'cause they generally don't want the property to sell, and they can sometimes try to sabotage you a little bit. I've seen that happen. That's

Varun: [11:27] true. And even if, let's say, they agree to y- your 48-hour notice, you still want to get the best price, which means you're still going in before the showing, trying to clean up, make it look good, and imagine trying to do this over and over again. So there are occasions when an off-market transaction might be better served than an on-market one.

Christian: [11:50] And we see it all the time too. Like, I've helped so many people over the years where they just don't wanna put it on the market. They don't wanna deal with all the stuff. Either they don't have the funds to fix up the house and make it look the best that it can, and they're not gonna make any more money even if they did go through all the hassle of doing that because maybe the house is a tear-down or maybe it just needs so much- Yeah work that spending 5 or $10,000 isn't gonna do much. They don't have the funds anyways, but it's not gonna matter to them. So and then there's also people that, you know, there's a lot of people that are germaphobes. They don't want anyone walking through the house. If we walk through as, you know, an agent or a broker or even as a potential buyer, they make us mask up and wear gloves and take off our shoes and do all those things, which is totally fine. That's their house. They have the right to suggest that we do that. But imagine someone in that situation wanting or having all these unknown people come through their house. It's just not gonna work for them. So that's another situation that I've seen over the years where, you know, selling off market, it just makes more sense for them.

Varun: [12:59] You as a seller get to dictate timelines when you sell off market versus on market. It, it, it depends on your personal preference and your particular situation, and that's where you need to make that call. If you do hire a real estate agent, I'm sure they'll be able to guide you through all the pros and cons depending on your property and your situation, and then you as a team can make that decision together. So I hope you found this information in the episode very helpful. We covered a lot. Uh, as always, if you have questions, please reach out.

Christian: [13:31] Yeah, and if you didn't already know, Varun and I are both licensed real estate brokers in the state of Washington, and if you're a seller and you did get an off-market offer- Yep and you're wanting some help, we'd love to help you out. That is what we do all day, every day, so. That's it for this episode of the Awesome in Seattle podcast. I hope you learned a lot. Thank you, Varun, for joining, and thanks for all your- Absolutely … knowledge and, and, you know, education that you've, you've shared on this one with us. So we will see you next time on the Awesome in Seattle podcast. Thanks, thanks for listening.