South Carolina Wholesaling Law: HB 4754

State: South Carolina
Bill: House Bill 4754 (2024 Act No. 204), amending the Real Estate Practice Act at S.C. Code Sections 40-57-350(A) and (L)(5), signed by Governor McMaster, plus a formal advisory opinion (issued November 14, 2024) from the South Carolina Real Estate Commission (SCREC) interpreting it
Effective date: May 21, 2024 (already in effect, and actively enforced)
Applies to: Residential real estate marketed before the marketer takes legal ownership
Bottom line: South Carolina is the strictest state in the country on wholesaling. The statute bans marketing a house you do not own without a broker license, and the Commission reads the law to prohibit the entire wholesaling business model, including for licensed brokers. Buy it, own it, then sell it, or work another state.

What the Law Says (Plain English)

Two layers matter here, and they are not the same thing. The statute is what the legislature passed. The Commission's advisory opinion is how the regulator says it will enforce it. You have to know both, because the opinion is stricter than a plain reading of the statute, and the Commission is the body that investigates and enforces.

Layer 1: the statute

HB 4754 defines wholesaling as "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." Marketing real estate owned by someone else, with the expectation of compensation, falls under the definition of a broker and requires a license. (A contractual interest, also called an equitable interest, is what you hold once you sign a purchase contract but before the deed is in your name. The statute is explicit that equitable interest is not the same as legal ownership for licensing purposes.)

The statute also says two things that sound like openings:

• Wholesaling "does not refer to the assigning or offering to assign a contractual right to purchase residential real estate." The assignment paper itself is not the banned act. The marketing before ownership is.
• An advertisement is permissible if it "markets a contractual position to acquire real property... and does not imply, suggest or purport to sell, advertise or market the underlying real property." So marketing your contract, as a contract, is technically allowed.

Layer 2: the Commission's interpretation

After passage, the SCREC issued a formal advisory opinion (dated November 14, 2024) stating flatly that the traditional wholesaling business model is not permitted in South Carolina. The opinion says wholesaling exists when four elements are all present:

1. A contractual interest in purchasing residential real estate
2. Marketing or advertising the property for sale prior to taking ownership
3. Expectation of compensation
4. Any legal instrument used to transfer the interest: assignment, novation, another purchase and sale contract, an LLC transfer, anything

Then the opinion slams the doors people thought were open:

• "Marketing the contract" is dead in practice. The Commission says both halves of the permissible-ad clause must hold, and it lists nine things that count as marketing the underlying property: a photo of the land or house; a plat or survey; any description of the property (rooms, beds, baths, square footage); the year built or rehabbed; the condition of the property and its improvements; the address, tax map number, or any part of the legal description; the rental income history; the neighborhood or subdivision; and any details related to the property or its improvements. The Commission is explicit that this list is not exhaustive. In other words, your contract ad cannot identify the property at all. Nobody buys a contract they cannot identify, and that is the point.
• "Marketing" means any effort to make the offering known to others. MLS, social media, print, Facebook groups, private email lists, even verbal communication. There is no private-buyers-list exception.
• Double closings and novations are covered when you market before taking ownership, because element 2 is marketing something you do not yet own, and element 4 sweeps in any transfer instrument.
• Licensees are locked out too. Licensed brokers and their firms are expressly prohibited from wholesaling, assisting others in wholesaling, or representing parties in wholesaling transactions. Getting licensed does not open this door; that is the opposite of Pennsylvania.

Honest framing of the gap between the layers: the statute's trigger is marketing before legal ownership, and its text leaves a sliver for pure contract-position marketing. The Commission's opinion closes that sliver as a practical matter. An advisory opinion is the regulator's enforcement position, not a court ruling, and it has not been tested in court as far as the sources show. But the Commission runs the investigations, it is issuing cease-and-desist letters right now, and most South Carolina closing attorneys already refuse wholesale transactions. Betting your business on beating the regulator's own interpretation in court is not a strategy, it is a legal bill.

What You CANNOT Do

• Contract a South Carolina house and market it to end buyers before you take legal title (photos, address, beds and baths, condition, price, any identifying detail)
• Post the deal anywhere: MLS, Facebook, Instagram, email blasts, private investor groups, or word of mouth. The Commission counts all of it as marketing
• Call it "marketing the contract" while the ad identifies the property. The Commission requires the ad to contain nothing that identifies the underlying real estate
• Escape by double closing or novation if you marketed the property before your A-B closing. Per the Commission, marketing before ownership is the violation regardless of how the deal papers out
• Get a license and wholesale anyway. Licensees are expressly prohibited from wholesaling, assisting wholesalers, or representing parties in wholesale deals
• Expect a closing attorney to help: South Carolina is an attorney closing state, and most closing attorneys stopped handling wholesale transactions after this law passed

What You CAN Still Do

• Buy it, take title, then market and resell. All four of the Commission's elements require marketing before ownership. Once the deed is in your name, you are an owner selling your own property
• Assign or offer to assign a contract in the narrow, non-business sense. The statute says wholesaling "does not refer to the assigning or offering to assign a contractual right," and the Commission's own examples bless transfers with no marketing and no fee (see Loophole #3)
• Keep marketing to sellers. The law regulates marketing properties to buyers before ownership. Finding motivated sellers and contracting to buy is untouched

The Loopholes

Loophole #1: Take Title First, Then Market (Clean, the Only Real One)

Every trigger in both the statute ("prior to taking legal ownership") and the Commission's four-element test points at marketing before ownership. So invert the model: contract the deal, fund it for real, close, take legal title, and only then market the property and resell it. As an owner of record selling your own property, no license is required and the wholesaling definition cannot reach you.

Be clear about what this is not. It is not a classic double close where you line up the end buyer by marketing while under contract; that pre-close marketing is the banned act per the Commission. You need actual funding (transactional or private money that does not depend on a pre-sold B-C buyer), you carry ownership risk until the resale, and you pay for two attorney closings plus recording and deed costs. This is exactly the "takedown" model that some industry sources push hard, and here the bias warning cuts the other way: sources that usually oversell the take-title approach are, in this state, simply describing the compliant path.

Loophole #2: Non-Residential Property (Gray)

The wholesaling definition says "residential real estate," so commercial buildings, 5+ unit complexes, and possibly land sit outside that definition, and the Chico report reads it that way. Two problems keep this Gray. First, no source quotes the statute's definition of residential. Second, the quoted broker definition, "advertising or marketing real estate owned by another individual or entity with the expectation of compensation," is not limited to residential property, so marketing a commercial property you do not own for a fee may still be plain unlicensed brokerage under the general licensing law. Talk to a South Carolina attorney before running any pre-ownership marketing on commercial or land deals.

Loophole #3: Exempt Transfers With No Marketing and No Fee (Clean, but Not a Business)

The Commission's own opinion gives examples of assignments that are not wholesaling: a husband assigning his contract rights to his wife, or the sole member of an LLC assigning to a different LLC he also solely owns. These pass because the marketing and compensation elements are missing. Useful for titling and entity cleanup on your own purchases. Useless as a profit model, because the moment you add a third-party buyer, marketing, and a fee, all four elements are back.

Loophole #4: Marketing Only the Contract Position (Closed in Practice)

The statute technically permits an ad for a "contractual position" that "does not imply, suggest or purport to sell, advertise or market the underlying real property." The Chico report leaned on this as the primary loophole. The Commission's opinion kills it operationally: no photo, no address or tax map number, no beds, baths or square footage, no condition, no year built, no rental income history, no neighborhood or subdivision, nothing that identifies the property, in any channel including verbal. A contract ad that survives those rules cannot tell a buyer what they are buying. Treat this as Closed unless a South Carolina attorney, in writing, designs something the Commission has not already listed. The Commission is actively sending cease-and-desist letters to people testing this line.

Penalties If You Violate It

• Unlicensed brokerage exposure under the Real Estate Practice Act: marketing real estate owned by another for compensation falls under the broker definition (S.C. Code Section 40-57-30(44)) and requires a license, so doing it without one is unlicensed brokerage. Specific fine and criminal amounts are not in the statute text on file; assume licensing-law penalties and confirm (see gaps)
• Active enforcement: the Commission issues cease-and-desist letters to non-compliant operators now, with fines and penalties expected to follow through its investigative arm
• For licensees: disciplinary action for engaging in, assisting, or representing parties in wholesaling
• Practical deal death: most South Carolina closing attorneys refuse to close wholesale transactions, so even a deal that dodges enforcement may not find a closing table

Quick Reference

This summary is an analysis of the South Carolina statute and the Commission's advisory opinion, not legal advice. Confirm your specific deal structure with a South Carolina real estate attorney before doing anything in this state, including the take-title model.

Sources: the codified Real Estate Practice Act (S.C. Code Sections 40-57-350 and 40-57-30(44), as amended by 2024 Act No. 204 / H.4754), the South Carolina Real Estate Commission's advisory opinion of November 14, 2024, and supporting third-party industry reports (South Carolina sections).