South Carolina Wholesaling Law (§ 40-57): A Plain-English Walk-Through

Most of what you’ll read online about South Carolina’s wholesaling law is someone’s summary of someone else’s summary. Let’s go to the text and the Commission’s own reading of it, piece by piece.

A caution first. I’m Ben Lovro, a South Carolina real estate investor. I’m not an attorney, and this is not legal advice. It’s how I understand the revised Real Estate Practice Act and the South Carolina Real Estate Commission’s advisory opinion dated November 14, 2024. Use it to prepare better questions for a South Carolina real estate attorney.

The background: the revised Real Estate Practice Act

In May 2024, Governor McMaster signed the revised Real Estate Practice Act, S.C. Code § 40-57-5 et seq. Two sections drive the wholesaling discussion: § 40-57-30(44), the definition, and § 40-57-135, the marketing rule. The Commission’s advisory then explains how it reads them together.

§ 40-57-30(44): the definition of wholesaling

In plain English, the definition has two halves.

What 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.

What it is not. The definition says wholesaling “does not refer to the assigning or offering to assign a contractual right to purchase residential real estate.”

And the context around it: under the same act, advertising or marketing real estate owned by another with the expectation of compensation falls under the definition of “broker,” which requires a license.

Breaking the definition down

Notice the moving parts:

• Residential real estate. The definition is about residential property.
• A contractual interest. You have a contract to buy.
• From a property owner. The person you contracted with owns it.
• Marketing to a different buyer. You promote the property to someone else.
• Prior to taking legal ownership. The timing — before you own it.

Timing is the hinge. Whether you own the property when you market it changes the analysis.

How the Commission reads the definition: four elements

The Commission’s November 2024 advisory reads the definition as a whole. Assigning a contract is not automatically wholesaling — but an assignment can still be wholesaling when the other elements are present. The advisory lists four:

When all four line up, the Commission’s reading is that you’re in wholesaling territory — and that requires a license.

Examples the Commission says are not wholesaling

The advisory gives examples of assignments that are not wholesaling:

• Assigning to a spouse.
• Assigning to your own entity.
• Assigning to another person with no marketing, no advertising and no expectation of compensation.

Notice what those share: no marketing and no compensation.

§ 40-57-135: marketing a “contractual position”

This section allows an advertisement that markets a contractual position — the contract itself — without implying, suggesting or purporting to sell, advertise or market the underlying property.

Here’s where many investors thought they’d found room. The Commission disagrees in practical terms. It describes advertising a contract without marketing the property as “practically impossible,” and says including any of the following would likely violate the section:

Ask yourself honestly: what would a buyer respond to if none of that were in the ad?

What counts as “marketing” in South Carolina

The Commission reads marketing broadly. Its advisory names:

• The MLS
• Social media
• Print
• Facebook groups
• Private email groups
• Verbal communication

That last one matters. Marketing isn’t only what you post. Pitching a property you have under contract to a buyer on the phone or at a meetup can count.

The one narrow scenario the Commission mentions

The advisory notes a narrow situation: someone approaches you about contracts you hold in an area, and you have made no effort to market or advertise the property. That’s a description of inbound interest with no marketing on your part. It is not a strategy to build a business on, and I’d want an attorney’s view before relying on it.

Licensed firms

Separately, the revised Act bars licensed firms from engaging in wholesaling. If you’re licensed or thinking about getting licensed, ask your broker-in-charge and an attorney how that affects you.

Where this leaves investors

Put together, the statute and the advisory point in one direction: in South Carolina, marketing residential property you don’t own, expecting to be paid, is licensed activity. The options investors talk about — licensing, taking title first, working through a licensed brokerage, partnering with an agent, documented JVs — each have their own questions. Each one is broken down on the options page. For the overview of what changed, see wholesaling in South Carolina.

If you’re outside South Carolina, don’t assume your state matches. My national page on whether wholesaling is legal explains how to check. And for how assignments work mechanically, see assignment of contract.

My stance

I buy and close as a principal in South Carolina. I follow counsel. I’d rather lose a deal than cut a corner.

Your next step

Print the four elements above. Next to each one, write how your current process lines up — honestly. Then bring that sheet to a South Carolina real estate attorney, and check the Commission’s site for any newer guidance. If you have questions about a specific situation, or you want to talk about a property you own, reach out to me directly.