Michigan: No Wholesaling Law Yet, But One Is Moving

State: Michigan | Proposed bill: HB 5366 (introduced December 16, 2025) | Status in legislature: Not law. Pending in the House Government Operations Committee, not enacted | Bottom line: Wholesaling in Michigan works today exactly as it did before this bill existed. If HB 5366 passes as described, wholesalers would be treated as real estate brokers and would owe sellers a written disclosure, including the assignment fee, plus a 5 business day right to cancel.

Where Things Stand Today

As of today, Michigan has no wholesaling-specific statute. No required seller disclosure, no cancellation window, no registration, no fee disclosure, no restriction on assigning the purchase contract you signed. Your buyer position under a purchase agreement is an assignable contract right, and selling that right for a fee is legal under ordinary contract law.

The one line that already exists is the general licensing line: market your contract position, never the property itself, and only assign deals where you are the contracted buyer. Advertising a house you neither own nor have listed is the unlicensed brokerage pattern in every state, including this one.

What the Proposed Bill Would Do

HB 5366 would amend Michigan's Occupational Code (1980 PA 299), MCL 339.2501, 339.2502b, 339.2503, and 339.2512e, and add a new MCL 339.2517a. We now have the actual introduced bill text on file, not just a third-party summary:

1. It defines the regulated activity by the assignment, not just the signing. "Real estate wholesaling" would mean "advertising, marketing, offering, or negotiating an assignment or other transfer of a buyer's legal interest or equitable interest in residential real property, whether or not the person holds legal title" (MCL 339.2501(z), exact statutory wording). Note the trigger words: the bill reaches marketing and negotiating the transfer of your contract interest itself, "whether or not" you ever hold title.
2. It covers residential property with 1 to 4 dwelling units. "Residential real property" is defined as "real property with 1 to 4 dwelling units" (MCL 339.2501(aa)). Larger multifamily, commercial, and raw land fall outside that definition as drafted.
3. It would make wholesalers brokers. The bill folds the same "assignment or other transfer" language into the "real estate broker" definition and adds, in plain words, "Real estate broker includes a person that engages in real estate wholesaling" (MCL 339.2501(x)). That is a licensing hook, not just a disclosure rule.
4. Before assigning a purchase agreement, you would have to give the seller a written disclosure stating (MCL 339.2517a(1)):

• You are an assignor and do not intend to occupy the property
• Your expected resale price or assignment fee, or if it is not fixed, the maximum percentage of the purchase price or maximum dollar amount you will keep
• That the seller has a 5 business day right to cancel

1. The state would create the disclosure forms. MCL 339.2517a(2): "The department shall create any necessary forms for a written disclosure required under this section." The content above is mandated by the bill; the exact form language is not, it would come from the department if this passes.

The fee disclosure is the part that changes deals in practice. Under this bill the seller would see your spread, or at least your cap, before you assign.

What to Watch

• Nothing is required of you today. The bill has not passed and may never pass. Keep operating under current rules.
• Watch the House Government Operations Committee. The bill was introduced and referred December 16, 2025. As of the official bill page, it has not had a hearing, a vote, or a substitute, and has not moved since that referral. Michigan runs a two year session through December 2026, so the bill is dormant, not dead. Check status before the session ends.
• Do not import loopholes from other states, but here is what the actual bill text suggests so far:
• Double closing looks likely to be CAPTURED, not a loophole. The wholesaling trigger reaches "an assignment or other transfer" of your interest "whether or not the person holds legal title" (MCL 339.2501(z)). Taking title at closing and flipping immediately reads like exactly the conduct that "or other transfer... whether or not the person holds legal title" was written to catch, not an escape from it. Do not plan around double closing as a workaround if this bill moves.
• Land deals look likely to be EXCLUDED. The bill only reaches "residential real property," defined as 1 to 4 dwelling units (MCL 339.2501(aa)). Raw land and 5+ unit or commercial property fall outside that definition as written.
• Selling the entity is still an open question. Assigning the membership interest in an LLC that holds the contract, instead of assigning the contract itself, is not addressed anywhere in the introduced text. We are not calling this one either way until later drafts or actual enforcement clarify it.
• One genuine ambiguity sits inside the bill itself and we are not resolving it for you. MCL 339.2503(2) reads: "Subsection (1) does not apply to a person that, as owner, engages in advertising, marketing, offering, or assigning an equitable interest in residential real property to the public." Subsection (1) is the general owner exemption. The more natural reading is that (2) strips that owner exemption away specifically for a person doing wholesaling-style conduct on their own equitable interest, consistent with 2501(x)/(z) already classifying wholesaling as broker activity. But the sentence could also be misread as creating a fresh, standalone exemption for that same conduct. Do not lean on 2503(2) as a safe harbor either way until this gets clarified, whether by a later draft or by someone asking the drafters directly.
• Start the cheap habits now. Telling sellers in writing that you are an investor who may assign the contract for profit costs nothing and covers most of what this bill would demand. The fee disclosure piece is the one to think through with an attorney if this bill starts moving.
• If you wholesale in Michigan at volume, track the bill directly on the legislature site rather than waiting for industry commentary.

This is analysis, not legal advice. Confirm anything you rely on with a Michigan real estate attorney.

Source: the official introduced bill text, House Bill No. 5366 (December 16, 2025), MCL 339.2501, 339.2502b, 339.2503, 339.2512e, and new 339.2517a, retrieved directly from legislature.mi.gov. Bill status confirmed against the official bill page. An earlier version of this page relied on a third-party industry report (Known Pending Bills, Michigan HB 5366 section); that report sells a takedown and funding method that benefits from pessimistic conclusions, so its conclusions were dropped and only its facts were cross-checked against the actual bill text above.